Making sense of the monthly property statistics

by Alistair Helm in


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We are fortunate in NZ to be blessed with a rich and comprehensive database of property statistics. Many countries have to wait many months between data releases, which tend to provide quarterly trends. We have the benefit of insight into the property market with stunning regularity, all crammed into the first 10 days of each month.

However a common complaint is that the data is not consistent and it is presented using different metrics; for example median price, stratified median price, average price, valuation, seasonally adjusted truncated mean asking price, rental rates, to name but a few. So as a smart property buyer or seller it is important to understand what these metric can tell you and what you should pay attention to, to be ahead of the game.

There are 3 sets of data that I consider critical. These are property sales data (the measure of what is happening as a function of buyer activity), property listings data (the measure of what sellers are doing and how they judge the market) and then rental data (the measure of how landlords are pricing their rental properties).

Property Sales Data

This is probably the best-known sector of real estate data with both the Real Estate Institute (REINZ) and QV pitching their data to the market within days of each other. Data that on first impression appears similar, but on further investigation is somewhat different and the difference can be significant.

REINZ provides rich data on property sales, median prices and days-to-sell, across not just the major regions of the country but right down to clusters of suburbs. Sadly the full data set is not accessible online in a machine-readable format, rather it is published as a pdf with prior year and month comparisons.

The data is collated by the reported unconditional sales of properties by licensed real estate agents who are members of REINZ, submission (as I understand it) is not compulsory, but in spite of that it is very comprehensive, and its timeliness provides for the prior month insight within 10 days of the end of the month. The data goes right back to 1993 and using their online tools you can access databases for particular suburb clusters.

REINZ present the majority of pricing information in the form of median price, this is statistically appropriate as it ensures that extremes of sale prices within data sets don’t skew the data. However in preference to the raw median price I tend to focus instead on the Stratified Median price, this data set developed in cooperation with the Reserve Bank is sadly only published for the 3 major cities as well as the national figures. It is a far more accurate indicator of true price movements as it applies modeling to ensure that higher sales volumes in high price suburbs for example are normalized and thereby don’t result in an overall rise in prices.

QV produce a well-recognised set of statistics on the property market based on their rich database covering every house in NZ in their role as the government rating valuations organization. This database is updated on a daily basis by the transactions of settled sales as registered by LINZ. This process captures all property transactions irrespective of whether the transaction was undertaken by a licensed agent or a private sale (estimated at around 10% of all sales).

QV do not report selling prices, rather their business is valuation estimation and it is this index, which is published monthly. Their computational models analyse the actual sales prices for individual properties matched to prior valuations and thereby create an index of house price movements. This provides a good representation of trends of price movements rather than actual figures for property prices regionally or nationally.

One drawback to the QV data is that it uses a broad time period, each report is based on the prior 3 month’s settled transactions. This is further impacted by the fact that long settlement on some properties could mean the property sold unconditionally may not appear as part of the QV dataset for anything from 3 to 5 months. Despite this timing issue the trend indicators of price movements from QV are very useful and accurate.

Property Listings Data

Property listings data provides a vital insight into the supply side of the market and has only become available since the ascendency of the web as the definitive search process for buyers. The monthly data is provided by Realestate.co.nz in their monthly NZ Property Report published within a day or so of the start of every month.

The report details the number of listings coming onto the market in the prior month, the asking price of these listings as an indication of the sellers / sellers’ agent’s expectation, as well as the level of stock of houses on the market at the end of the past month. The report is very detailed in printed form and also provides the ability to download the full data sets with both raw data and seasonally adjusted data.

As the originator of this report during my time at the company, I believe the report  holds a unique insight into the supply side of the market, as a key lead indicator of the market. As an example of this is the fact that the current shortage of listings was flagged as early as April 2011 in the report by which time there was a clear trend as to how this would lead to price pressure in the medium to long term.

One key data set within the report that I think is worth focusing on is the Inventory as a measure of available stock of property on the market. This is presented not in absolute numbers but as a representation of the number of weeks that it would take (based in current rate of sales) in theory, sell all of the houses on the market. Nationally this has fallen from a high of over 52 weeks (a full years supply) to now barely half that at 27 weeks.

I have recently taken these key numbers and produced what I call a Property Dashboard - this simple gauge shows where each of the 19 regions of the country are at, in respect of experiencing a sellers market, a buyers market or a balanced market.

Rental Data

Weekly rental rates are published from the Department of Housing and Buildings (now known as The Ministry of Business, Innovation and Employment)

Tenancy Bond database. This monthly data is published in the NZ Property Investors magazine and provides great insight into the state of the rental market.

The Agency has recently opened up their data sets going back to 1993 by each local authority, so if you are keen to play with spreadsheets to analyse the data this is highly valuable.

Trade Me has also started providing some valuable data on the rental market. It is sadly rather infrequent, being on a quarterly basis and not as detailed as many would like, however I am sure that with the passage of time they will provide richer information, as they hold an incredibly rich data set of listings, rental prices and transaction pace, covering every property type, size and location.

Having begun by saying that we are fortunate in NZ to be blessed with a rich and comprehensive database of property statistics, I would actually conclude by saying that we are actually lacking real in-depth information and statistics. In a recent article I posed the question "Do we really have the property data we need?" I hypothesized as to what type of statistics would be really valuable, for example how would it be if we could for example understand:

  • What is the percentage of residential property buyers that are sold to first-time homebuyers, typically what are they buying, where and for how much; how has this changed over the years?
  • Equally imagine if we could understand how many properties in Auckland are bought as investment properties and how many of these are managed privately as opposed to being managed by a property manager?

Such rich data would provide so much more insight and assist consumers, economists and many other businesses to better plan and offer services.

This data is not beyond the bounds of capability. Real estate agents or the Real Estate Institute could capture all of this data in its capacity as the organization representing the industry and its professional practioneers.

This article is also published in the May edition of the NZ Property Investor magazine


Leveraging technology to be a smarter property investor

by Alistair Helm in


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I have often heard it said, that smart property investing is all in the buying. That makes sense, but surely it is as important to manage an investment property smartly as it is to make a smart purchasing decision.

Needless to say technology can play an important part in acquiring and managing a property and I have been checking out some of the latest tools and apps that I think are vital for smart property investors.

Whether you have 2 or 20 investment properties it is critical to keep track of them in regard to rents, maintenance, tenant details and inspections. I’ve a found a single tool that matches this task list and the beauty is that it is a kiwi innovation, built right here in Wellington and providing services globally with clients in the UK, Australia and the US.

PocketRent is an online tool that helps you manage all those tasks as well as improving communication between you and your tenants. From a finance perspective it is integrated into the Xero accounting solution, another great kiwi company taking on the world in accounting software and beating the best in the game. I have checked out a number of online solutions for property management and have to say PocketRent is the smartest.

The proof of any good online service these days is the promise of satisfaction from a ‘try-before-you-buy’ option, this is how PocketRent works, you can load up a single property for free and try it out, pricing then is scaled to the number of properties you own.

If you prefer to unbundle the tasks of property management either because you have you own record management systems or you just like to do things that way, an excellent app for managing property inspections is Happy Inspector. This app for the iPad provides a great way to record property conditions and prompts you to tasks during the process. It naturally captures and integrates photos seamlessly and synchs the data to your home computer or any computer for that matter, as well as providing printed reports and forms to coordinate with contractors and repairers as well as agents.

If you happen to manage some furnished properties it is worth looking at the My Inventory Manager app on the ITunes app store. This app allows you keep a track of all inventory in a property with serial numbers and values.

I started off by stating that managing an investment property was as critical as buying smartly. Naturally any review of technology for the property investor could not be complete without the importance of websites and apps for searching property on the market. Naturally when it comes to finding property for sale you cannot go past Trade Me Property and Realestate.co.nz. For finding tenants Trade Me Property is the answer.

For more detailed information on property values and sales QV and Zoodle provide great insight and valuable data as paid for reports. If you happen to be in Wellington then check out Watch My Street - you have the benefit of this free site for local authority property info. Hopefully in time they will be able to provide this service for all of NZ.

Whilst I have outlined a number of valuable fit-for-purpose apps to assist the process of property management and purchase I thought it would be helpful to also share some more generic recommendations in regard to technology.

One of the most fundamental, and one that is all too sadly overlooked until you become the victim of it, is lost files. As with family images; property data and historical reports on properties are valuable to you. Ask yourself, what would happen if your computer hard drive were to crash, if your laptop were lost or stolen? – Where is your data back up?

There is a simple 3.2.1 rule to remember for data storage.  Three copies of everything, at least 2 mediums (one in the cloud and one on a physical disk) and at least one copy off-site. I use a great service called Dropbox, which provides a fully synchronized copy of all my files, I run it on 2 computers – one at home, the other at the office. In this way I have a copy in the cloud and 2 copies on hard drives with two different physical locations. Dropbox also offers a great service for version control so if I accidently delete a file or do something dumb to a spreadsheet I can retrieve a copy of a prior version, very helpful.

Another tip I would share regards passwords. I like most people, are hopeless at remembering passwords and tend to use the same password for many accounts. This is not smart. The vulnerability though is never where you think it is. It is unlikely that your email and password will be hacked from a trusted site or critical site. It will be a weaker site where you use the same email /password combination – malicious access to these type of sites is sadly more common and once collected these email / password combinations can open up the more critical sites. My trick, which I have used for a number of years, is that on all non-critical sites where I don’t provide important personal information or credit card info, I simply use the site name as the password, that way it is easy to remember.

A better and safer solution to this problem nowadays is using a service like LastPass or 1Password. These services use two-factor authentication to create an encrypted password for each site that your computer safety and securely stores. These are very secure services and ensure you only need to remember a single access password, which is secure.

A final thought in regard to technology and the property management relates to social media and your role as a landlord. If you manage your own properties, you really should be aware of the impact the democratic web could have on your reputation and through that the prospects for future tenants. Just as TripAdvisor has had an effect on hotels and their reputation, the web and its multiplicity of users could be sharing experiences about you as a landlord, the properties you own and your tenants grumbles and complaints.

You cannot stop people writing online and sharing what they want. What you can be, is alert to any such comments. Something as simple as setting up a Google Alert based on the address of each of your properties could be an easy and simple way to track if every anyone makes any comments. Google Alerts are free and can be scheduled to send you an email on whatever frequency suits.

If you become the victim of such negative feedback, to be forewarned is vital. As to action, my advice would be; be cautious about being drawn in. If the comment is from an existing tenant I would recommend face-to-face communication rather than online. If the negative comment comes from a prior tenant and shows signs of escalating then it can be valuable at some stage to add your own comment. Remember it is important to be polite, be calm, respectful and factual – becoming angry and inflamed only through fuel on the fire!

Technology is a core part of our lives, our business and our communications, my advice is use it where it can make life easier, you don’t need to be an early adopter, just don’t be a laggard!

This article is also published in the April edition of NZ Property Investor Magazine


Property searching on the go - a review of mobile apps

by Alistair Helm in ,


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The evolution of the web has undoubtedly transformed property searching over the past decade; however the emergence of smartphones and the associated vast array of mobile computing devices just 5 years ago is set to transform property searching at a much faster rate. Already most property website operators report close to half of all engagements with their listings are from mobile devices and is rising everyday.

Mobile searching is intuitive. As we all know the only really effective way to assess property is to get out there in the car and walk around; sure the web is a great starting point but what you really want to do is capture your hit-list of property options and carry them with you, as you drive around, that is what the mobile device is designed for.

Checking out the Apple app store or Google Play Store for Android offers up a number of property apps for NZ and a vast array of others for overseas markets. For NZ there are a few small operators who have taken advantage of the open API (access to the raw database) from Trade Me and produced mapping solution. Sadly these under a variety of names are best steered clear of, as they lack the functionality of the only two which are worth considering – Trade Me and Realestate.co.nz.

However before reviewing these two I would like to mention an app from the ASB that is so close to being great, but sadly misses the mark. The Property Guide uses the data feed from Trade Me to create rich content of listings, to this is added the QV data of legal description and government valuation for every property on the market. This is the only app that offers this valuable data and is the only single source of this data freely available on the web. The app though fails on almost every other criteria. The listings are often out of date. There are no contact details of the agents listing the property and so on. Maybe the app will improve, time will tell.

Trade Me and Realestate.co.nz are the trusted apps as they are the trusted property websites; their respective apps have been downloaded over 100,000 times and really hold the greatest value interest to buyers and investors.

Realestate.co.nz was first to launch an app for the iPhone in late 2010, Trade Me followed mid last year with its dedicated property app for the iPhone and iPad. Those with Android devices really only have the option of the Realestate.co.nz app at this time.

So which is better and what are the most valuable features on these apps that can save you time or improve your buying process? I have evaluated the two apps on these 3 criteria of (i) content (ii) ease of use and (iii) storing & sharing data.

Content is critical and both apps present as close to the full complement of listings on the market. Trade Me has the edge when it comes to property for sale as it features private sales as well as agent listings. When it comes to rental property Trade Me dominates with more than twice as many listings. However the important thing to note is that listings presented on map view comprise only those properties for which the agent has supplied an accurate address – no address, no pin on the map! At this time around 1 in 5 properties on the market do not have an accurate address. Given this issue is common to both apps, no advantage can be gained by either company.

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Ease of Use is vital for mobile devices given the smaller screen and lack of a mouse. Getting to relevant data fast is so important with as few a number of taps or swipes the better. In this regard Realestate.co.nz app scores highly. From the home screen one tap takes you to property “Near Me” showcasing property for sale within a 1km radius. This focuses the app entirely around the GPS capability inherent in the device and presents content in a map view as the default.

Trade Me on the other hand opt to default to a list view as per the website, and sadly lacks a “Near Me” option thereby requiring 3 taps to get to a map based view of property around you.

Both apps showcase individual properties equally well with full screen swipe gallery view.

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An advantage again for the Realestate.co.nz app is that on the map view open homes are displayed with a distinctive blue flag separate from the red pin for property location. Additionally all new listings for the week are shown by a distinctive red flag, which highlights the newest listings – a very useful way to assess properties. Trade Me simply relies on a red pin for all listings.

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Storing & sharing property information is at the heart of smart property searching and this would be the most critical aspect I would judge for the smart investor. In this regard Trade Me wins hands down. The app offers synchronization between the website and the app – save to your wishlist on the website and it appears on the app. Sadly Realestate.co.nz app offers local storage of favourites on the app but there is no synchronization between the website and the app. Additionally it is a little frustrating that properties stored as favourites on the app remain that way until deleted even if the property comes off the market – this is annoying as you end up with a lot of surplus data on your mobile device.

Despite this shortcoming the Realestate.co.nz app does have a useful feature called “Inspection” which is a notepad capability linked to each property. It allows for notes and photos to be kept for each property so when visiting an open home you can collate further information and especially those critical photos not included by the agent on the listing so you can review later on aspects of the property. I would judge this to be a great feature, but somewhat weakened because there is no means of synching this data to your home computer as an integrated file for each property.

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When it comes to a choice between these two apps I believe that for the serious investor looking to use the app as an effective tool for property searching the Trade Me app is the better choice. I make this judgment purely on the feature of synchronization. I believe this is the single weakness of the Realestate.co.nz app. When you are searching property you want to be carrying with you at all times your portfolio of prospective properties with full information. Your primary search is likely to be in an office environment and you want this process to seamlessly carry across to your mobile device. So for me Trade Me wins for this functionality alone – it is weak as compared to the Realestate.co.nz app in many other aspects and I hope that they address this or maybe Realestate.co.nz app could hurry up and release a modification with synchronization.

This article is also published in the March edition of NZ Property Investor Magazine