Auckland is enjoying high demand for residential tenancies and rents are increasing while many places in the rest of the country are experiencing the opposite, First National’s quarterly property management survey shows.

The survey, for the three months to mid July, measures property management vacancy rates, rent movement and demand/supply experienced by First National’s property managers based at 70 offices around New Zealand. 

Across all of First National’s approx 6500 property managements nationwide, vacancy rates increased to 8.4%, compared to 6.3% at the same time last year.

Rentwise, overall the average rent movement was a half percent drop (-0.5%) but the median rent movement across all properties managed was zero.

However regional variations showed a significant split between two of New Zealand’s major cities – Auckland and Christchurch – with strong rental demand and the rest of the country with weakening demand.

Regionally Auckland was by far the strongest performer with average vacancy rates for the properties managed by First National down to 1.6% from 2.4% at the same time last year.  All property managers in that region reported rent increases of between 5% and 7%.

First National Group General Manager, John Stewart, said regional job losses could be behind domestic migration to Auckland as national immigration numbers were currently in decline.

“Many immigrants move to New Zealand’s regional towns. Without them, the northward drift for work is more visible.”

Stewart noted Christchurch was also experiencing consistently high demand and had low vacancy rates but had not changed significantly compared to the same time last year. Despite media recently predicting a rent increase in Christchurch, many landlords were yet to see this occur, he said.

“The big picture appears to be that more people are moving to Auckland and Christchurch and fewer people are moving into the regions,” Stewart said.

“Industry views on the seeming over-supply of rental and lease properties in Wellington, particularly of apartments, reflect in the main a gross lowering of the number of people contracted to Government and major corporates this past couple of years,” he added.

“An oversupply of rental accommodation and decreases in rent prices in the regional towns and cities provide opportunities for those affected negatively by the recession.

As always, some towns will buck the trend and experience stronger demand than others, but the only region as a whole to show strong positive movement (ie decreasing vacancies and increasing rents) was Auckland.

• Northland had some inter-regional variance but overall vacancy rates were up by 5% to 19% and rents had dropped by 5% compared with the same time last year.
  
• Bay of Plenty vacancy rates had dropped slightly (1%) year on year to 10.2% but rents were also down and property managers reported demand was strongest for low end properties.
  
• Taranaki’s vacancy rates had all increased compared to the same time last year but none were above the Group’s national average.
  
• Marlborough’s vacancy rates were affected by the viticulture industry’s struggles and had increased to 10% from 7.5% at the same time last year.
  
• Central Otago’s vacancy rates were on par with the same time last year but Southland’s vacancy rates had doubled to twice the Group’s national average.
  
• Vacancy rates in regional Canterbury were static, with pressure coming on rents.
  
• Wellington reported an oversupply of residential rentals across the board and an abundance of inner city apartments, with associated rent declines of around 5%.

First National Group has around 70 offices nationwide and manages around 6500 rental properties throughout New Zealand on behalf of landlords. 

Note: First National does not have offices in Dunedin so this city’s trends were not included in the survey. 


For more information please contact:

John Stewart
General Manager
First National Group (NZ)
(027) 222 2756 

First National’s monthly survey of its 70 nationwide offices representing around 450 salespeople includes buyer enquiry indicators, listing level measures, and buying and selling trends.

In the June survey, just over half of respondents reported at least one sector of the property market picking up in the past two months in their region (not just their own business).

The biggest pick up in activity was from first home buyers (reported by 14% of offices) and middle market home buyers (reported by another 14% of offices).

Interest in upper end residential property increased in 8% of First National’s areas and sections in 6%.

Eight percent reported an increase in investor activity in their regions.  However 92% said investor activity remained flat or had dropped off significantly in their area in the past two months.

First National Group general manager John Stewart said the return of first home buyers and those in the middle market in June were encouraging, although he noted average sales volumes were still relatively low across the
country.

“There’s no doubt the low enquiry levels continue as the dominant trend across most markets and in most regions.

“What will change it?  The commencement of the recently-announced tax cuts?  Realisation that there are bargains to be had out there?  Panicking vendors dropping and running?  Maybe a realisation at last that floating / variable rate mortgages will be the best option into the future?  Spring?

“Each and every one of those will be the stimulus for some people, one or several will motivate others.  In the meantime vendors need to be aware that it is still largely a buyers market and to get any interest at all the property needs to stand out in presentation, location or price,” Stewart said.

“The return of first home buyers seeking to buy is perhaps in anticipation of stressed landlords selling prior to the new tax determinations on depreciation in 2011,” he speculated.

Listing levels were on par with May but were lower averaged across the country than the June last year.

Prices had come down in 65% of areas, compared with June last year.

Northern Wellington bucked the price trend with house price increases across the board compared with the same time last year and listings also up.

By contrast, Christchurch was a gloomy picture characterized by sales volumes lower than the same time last year, lower listings than the same time last year, and fussy buyers.

Auckland was a mixed bag.

For more information please contact:

John Stewart
General Manager
First National Group
(027) 222 2756

or Fleur Robinson
Tactic Communications Ltd
(0274) 661 777

First National’s survey of its 70 nationwide offices representing around 450 salespeople includes buyer enquiry indicators, listing level measures, and buying and selling trends.

Volumes
Steady sales volumes from March and April mostly dropped off in May.  Twenty percent of offices signed more contracts last month compared with a year ago, and several offices had twice as many sales.

However, 20% had the same number of sales as a year ago and 45% had fewer.   

Listings
Listings that had jumped by over 3% during March and April, dropped back to January levels at 7428.

Prices
Compared with May 09, prices had dropped across the board in Mid Canterbury, Northland, Taranaki, Marlborough, West Coast, Invercargill, Wellington, Bay of Plenty and Christchurch. However, residential property prices had increased across the board by up to 7.5% in parts of Auckland, provincial Southland and Manawatu.

Other areas were a mixed bag of both reductions and increases depending on the type of property.

Price drops more likely on 3brm properties
The majority of price reductions were for 3brm homes (in 68% of areas measured by the survey). Two bedroom and 4bm homes kept their value slightly better, although there were still price reductions on these in 58% of areas.

Comment
Real estate agents comments on the month of May were most revealing about the state of the market:

“Low enquiry.”

“Pressure on vendors.”

“Listings increase driving prices down.”

First National Group general manager John Stewart said the market was in ‘holding’ mode.

“Concerns about increasing mortgage interest rates, investor worries about tax issues and the general public wanting to know how tax cuts would affect incomes all impacted on diminished buyer interest in May.

‘Additionally, bad weather heading into the quieter winter months also seems to have had an effect.

“It remains the case though, that well priced, nicely presented and unique homes are still selling, allowing those vendors to take advantage of the strength of a cashed up position as they in turn become buyers.

“We would expect that the middle market will remain quiet until at least Spring, while there may be increased listings, predominantly in the lower end, with investors exposed to the new depreciation tax position selling. This could well see first home owners entering the market in larger numbers.

“Increased returns across all rural sectors could well see a lift there which would impact positively on rural towns.

“Also, there seems increased interest in the discretionary markets and holiday homes are moving consistently in the likes of Wanaka, Turangi – Taupo, Whangamata and the Marlborough Sounds.

For more information please contact :
John Stewart
General Manager
First National Group
(027) 222 2756

or Fleur Robinson
Tactic Communications
(0274) 661 777

In the First National Group’s quarterly survey of its rural realtors to mid May, 33% said despite confidence in an increased Fonterra milk solids payout, they did not expect the rural property market to improve significantly for another 12 months.

Another 33% estimated a pick up in summer. 

Just 10% believed it would pick up in spring, and 24% declined to estimate when the market may pick up at all. 

Traditionally, price trends of rural property follow milk solid price trends. Fonterra has long advised farmers to budget on receiving $4MSkg but recently said $4MSkg - $6MSkg was “the new equilibrium.” 

First National Group general manager John Stewart said farm sales in the past quarter to mid May had continued to be flat and vendors expectations were taking a long time to adjust to those of buyers. 

“In some areas, Rotorua for example, sellers’ price expectations are being held up by payout speculation and they are also above what the banks are prepared to lend on. That type of situation doesn’t lend itself to sales.” 

Stewart said despite this, some landmark farm sales had taken place in the past quarter, including a $5m for a 71ha grazing block in Golden Bay, but they were properties in exceptional locations which rarely came to market.

While sellers were likely to have to wait to achieve their desired price, there were some positives, Stewart said. 

“It really is a buyer’s market in rural at the moment. Every cloud has its silver lining and in the rural market someone who has cash or a friendly bank manager is in the negotiation seat. 

“Our rural agents in Te Puke say it’s the best buyer’s market for horticulture in 18 years.” 

Some agents in Taranaki predicted any market improvement would be marginal and sellers holding out for a better price could lose out by waiting. 

Demand for lifestyle property was also relatively flat. Properties closest to cities were attracting the most interest. 

However, Stewart noted a number of new stimuli that could increase buyer pressure in the current quarter. 

“Budget announcements in company tax changes, the drop in the dollar’s value against meat, wool and dairy purchasing markets will be particularly pleasing to many.

“Those changes may well see the banks easing their austere approach to releasing loan funds against farm purchases.

Doubtless those market changes will have similar effects on incomes and buyer interest in the likes of kiwifruit, berry and pip fruit,” he said.

“We suspect tax relief for high income and company tax will see a growth in lifestyle block buyer interest too.” 


For more information please contact:

John Stewart
General Manager
First National Group (NZ)
(027) 222 2756 


About First National Group 

First National has more than 450 offices in Australia, 70 in New Zealand and 3 in the Pacific Islands. With thousands of realtors across Australasia, the First National Group has the strength a large network can bring, along with the knowledgeable service of an independent local office. First National is known for being the first real estate organisation to bring in an accredited Best Practice programme to ensure customers really are put first.

A charity auction featuring valuable sporting and cultural memorabilia will be a highlight on Sunday night raising funds for the Group’s new charitable arm, the First National Foundation.

First National Group (NZ)’s Australian partners will be represented by First National Australia chief executive Ray Ellis, marketing manager Jason Verstak and chairman David Hamilton.

Growth 2010, from 11am Sunday May 9 to Tuesday May 11 will be packed with keynote speakers, workshops and an awards ceremony noting the accomplishments achieved by First National offices and staff this year.

Internationally known keynote speakers include Ngahi Bidois, Bill James and Rob Hamill.

Ngahi Bidois is an inspiring international speaker based in Rotorua, New Zealand.  Mr. Bidois shows audiences how to take the ancient wisdom he has gained from his Maori culture and apply it in our modern business world.

Bill James, also a New Zealander is known for his focus on ‘the smart business maker.’  Highly sought after keynote speaker and trainer of referral systems, James works with companies to inspire change and equips them with the tools to do so.

Rowing icon Rob Hamill rounds out day three of Growth 2010.  Having represented NZ in the sport for 16 years, he will share his inspiring story of motivation and adventure on Tuesday morning.

Auction items to be sold on behalf of the First National Foundation include a vintage wine, a U2 Fender Electric Guitar signed by the band members, a Formula One steering wheel hand-signed by Lewis Hamilton, racing glove signed by Australia’s #1 Formula One driver Mark Webber, an original Michael Jackson Thriller LP and signature items autographed by Sir Bob Charles, Johnny Depp, architect Frank Gehry, Roger Federer, Scott Dixon and Andre Rieu and more.

The First National Charity Auction will take place at the Intercontinental Hotel.  Members of the public interested in bidding are encouraged to register their interest by calling John Stewart on (027) 222 2756 or Lindsay Roberts on (027) 227 1183.

For more information or to arrange a photo opportunity please contact

John Stewart
First National General Manager
(027) 222 2756

or Fleur Robinson
PR consultant
Tactic Communications Ltd
(0274) 661 777

However, the Government’s first home buyers grant through Kiwisaver may provide added impetus coming into winter.

As part of the Group’s regular monthly survey, First National’s real estate principals around New Zealand were asked to comment on up to two main issues affecting sales in their regions (not just their own business).

Lack of confidence and properties being overpriced were tied, named as prime reasons in 30% of regions.  Unavailability of finance was named as prime reason in 23% of locations.  Offers being conditional on sale of the buyer’s own property was named as a prime reason in 20% of regions, and uncertainty around pending tax changes in 8%.

There was no significant change in trend when results from city offices were compared with regional offices.

First National Group general manager John Stewart said the Government’s first home buyers grant announced over the weekend may provide some badly-needed confidence.

" A focus on the first home buyer incentive is timely given the nervousness of some  rental  property owners regarding likely taxation changes in the Budget.

"It may well be that once the Budget has clarified things in that respect, that a number of presently rented properties will come on the market and likely be snapped up by diligent youngsters.

"Buyers particularly are sitting waiting to learn just what the Budget will mean for them - whether they will have more or less money in their pockets.  Then they’ll tie that back to the messages coming from the Reserve Bank and retail banks on just when interest rates may change, by how much and especially, what is the likely direction of fixed rate money.

“New Zealanders are unique in their focus on fixed rate mortgages and until these settle back from their present highs, the family buyer, in our opinion, will stay out of the market," said Stewart.

Listings in April across First National’s offices increased slightly from March with the biggest jumps in the Bay of Plenty and Auckland regions (up to 4% each). Numbers of listings dropped slightly (by up to 2%) in Wanganui/Manawatu, Taranaki and Christchurch but were static in other regions.

Despite difficult market conditions, a healthy number of contracts were signed across the country.

First National has 70 offices across New Zealand, with around 500 salespeople.  The Group’s monthly survey measures key market indicators including buyer enquiry levels (open home attendance, emails, web views, walk-ins), listings and contracts signed.

For more information please contact

John Stewart
General Manager
First National Group
(027) 222 2756

or

Fleur Robinson
Tactic Communications
(027) 466 1777

The quarterly property management survey of the real estate network’s 70 New
Zealand wide offices shows consistently increasing occupancy rates and the
lowest vacancy rate for four quarters, halving from 6% in mid July to under 2.5%
last week.

First National Group (NZ) general manager John Stewart said it appeared lack of
building, organic growth, continuing immigration, reduced emigration and
shrinking of available stock was increasing demand.

“If the pressure continues, rising rental rates may not be far off.”

Meantime, rents were stable overall, with no change in 51% of properties
managed by First National, 26% of rents edging up, and 23% edging down.

While some areas reported the usual flurry of changes, many said tenants were
sitting tight.

“The property management industry has been in a state of flux since late last year when Govt alluded to likely taxation changes for the sector,” Stewart commented.

“Certainly in some areas, landlords have been down-selling holdings, either in anticipation of taxation liability after the May 20th budget, or in advance of tenants ‘voting with their feet’ through preferring warmer, dry, newer properties over old, cold and dreary.

“It may be that with people relocating for jobs, their houses are still on the market while they themselves rent.

“The other trend that is continuing is the growing tenant preference for larger, newer homes. This may well be people who have already sold a home and do not feel now is the time to reinvest in real estate.”


Key findings are:

• National vacancy rates are lowest in past four quarters - from 6.3% in July 09, 4.9% in October, 3% in January 2010 and now 2.45% in April.

• Rents are stable or rising in 76% of areas. Increases in rents averaged 5.6%. Decreases averaged 6.23%

• Less movement overall by tenants changing properties than usual for the time of year.

• Auckland’s proliferation of empty apartment blocks appears to have been soaked up by the market.

• The usual migration to warmer homes not happening with same force as last year, so maybe people are seeking stability.

• Fewer than usual areas have an oversupply of rental accommodation.  Areas currently reporting oversupply are Marlborough, Waihi, Taranaki and Central Otago, but these are mainly properties that have not sold and which
vendors do not want empty over winter.

• The West Coast reported less enquiry for rentals this quarter than the same time last year but not an oversupply.

For more information please contact

John Stewart
General Manager
First National Group (NZ)

(027) 222 2756


However, they are working well in mortgagee sales and scarce supply properties.

First National has 70 offices across New Zealand, with around 500 salespeople.  The group’s monthly survey measures key market indicators including buyer enquiry levels (open home attendance, emails, web views, walk-ins), listings and contracts signed. 

Listings increased again in March but overall buyer enquiry was lower than February, the survey showed.

Respondents were also asked to rate the current effectiveness of selling methods (auctions, tenders and individual negotiations) in their regions, not just their own businesses.

Individual negotiation between buyer and seller was deemed by 72% of agents as the most effective, followed by tenders at 18%.

Auctions were considered best in just five locations – Manurewa, Rotorua, Waiheke Island, Tauranga and Timaru.  However, First National agents in Ashburton, Kaitaia, Otaki, Tauranga and Wanganui said auctions were working well for mortgagee sales.

The survey reflected other industry groups reports of increased listings but regional variation lowered the overall listing increase to just 3%, on par with previous years.

Regional listing variations were between increases of 8% and decreases of 5%. 

Increased listings showed up in Canterbury, Taranaki, the Waikato, Wellington and Marlborough.

However, listings in the Nelson/Tasman region, Auckland, the West Coast, Southland and Bay of Plenty had dropped from February. Other regions were on par with February.

First National Group General Manager, John Stewart, said in the current subdued market, vendors need to make sure they were using the right selling tool.

“Some realtor groups use auctions as their main selling tool but vendors must be careful their agent is giving them the best advice for the sale of their property.

“We saw a competing agency take 10 properties straight to auction in one town last month and there was not a single bidder.

“Mortgagee sale appears to be ideal for auctions and tenders can provide vendors a multi-offer situation but mainly we are seeing properties get the best price using skillful individual negotiation.

“At a time when buyers are scarce we wonder if encouraging vendors to follow the auction pathway first is the best advice. At an auction, buyers must be able to unconditionally purchase.

In times like this, where buyers are few and far between anyway, the best price may well come from someone with a home yet to sell rather than from one of the few cashed up buyers in the market.

“It's that fine balance that real estate professionals must manage between getting the vendor a sale and attaining for them the best price available in the market.”

For more information please contact:
John Stewart
General Manager
First National Group (NZ)
(027) 222 2756

Move2nz.com is an international website aimed at providing free information needed by people intending on moving to New Zealand.

The First National Group is one of New Zealand’s leading property sales and rentals networks and has just become the exclusive real estate partner for www.move2nz.com.

First National Group (NZ) General Manager John Stewart said the partnership made move2nz.com even more of a one-stop-shop.

“Move2nz.com is a superb concept developed by Mike and Tammy Bell.  It acts as an answer to the many concerns and issues they faced while planning their own move to NZ almost a decade ago.

“They have addressed the issues well and are subsequently focused on the resolution of additional gaps in migrant support. Their wide membership base of over 33,000 now has exclusive access to First National’s nationwide network ensuring real estate information, opportunities and processes are clearly understood.

“With more than 6500 rental properties on our books and around 7500 properties listed for sale each month, First National offers plenty of options for accommodation.

“Having 70 member offices from Kaitaia to Invercargill means First National can provide an accurate picture of local market conditions in all of New Zealand’s regions.

Move2nz.com was started in 2005 by Mike and Tammy Bell.

“Migration can be difficult and stressful,” website founder Mike Bell said, from Christchurch.

“We moved from the UK to New Zealand in 2000 with three small children, no job, and no home to go to.

“Having achieved everything we set out to do we launched move2nz.com in 2005 to help your family make it through your move to New Zealand.  Our website move2nz.com brings together a huge network of friends, many already living in New Zealand, to give you the help and information you need: fun, friendly and completely free.

Move2nz.com CEO Tammy said around 77% of their members indicated that they were looking to buy a property within the first 6 months of moving.

“Renting and especially buying a home can be a major problem for more than half of migrants, as confirmed by government statistics with 52 percent confirming this as their main concern.

"Having a real estate expert in your corner to explain the differences, help you stay in budget, avoid the pitfalls and give you the whole picture makes a huge positive difference.

“We had been on the look out for a trustworthy company and liked the way that First National Real Estate was structured. We think that First National will be a real asset to help our members find the home they need.”

For more information please contact:

John Stewart
General Manager
First National Group (NZ)
(027) 222 2756

Mike and Tammy Bell
Founders
move2nz.com
(027) 634 2368


Reporting for the month of February, 44% said vendors were now more reasonable in their price expectations than before Christmas.

Half the offices noted significant increases in new listings compared with January.

First National Group (NZ) General Manager, John Stewart, said the survey’s findings gave a glimmer of hope in a very quiet market where mortgagee sales were making headlines.

“When a bunch of ‘normal’ properties are competing with mortgagee sales, price does have a greater influence.”

Exact price reductions were unavailable at the time of the survey but 20% drops were becoming more common, Stewart said.

“With buyers so cagey at the moment, it is in a vendor’s best interest to price realistically or risk waiting many months to sell. 

“I know agents are accused of always saying it’s a good time to buy, but with low interest rates and improving choice of properties, I would have to concur.”

First National’s 70 nationwide offices are surveyed on key market indicators including buyer enquiry levels (open home attendance, emails, web views, walk-ins), listings and contracts signed.

Stewart noted ongoing high website enquiry numbers indicated people were still keeping an eye on the market.

“One would imagine that at some stage that will lead to increased activity. Right now absolute lack of confidence is holding things back.

"The downstream effect of choked rural sales is having negative effects in many rural towns, Ashburton being a prime example.

"The results of business failure in many of those same rural focus centres is adding to the market slowdown in those towns.”


Survey highlights:

  Asking price: Becoming more realistic in Wellington, Invercargill, South Auckland, central North Island, Northland, Cromwell, Alexandra and coastal holiday destinations.

  Asking price: Still at pre-Christmas levels in many places, with vendors in Taranaki, Blenheim, central and northern Auckland, and parts of Christchurch least prepared to budge.

  Sales volumes: Slight improvement in February sales volumes compared with January but still low.

  Buyer enquiry on par with January and quieter than usual for this time of year.


For more information please contact

John Stewart
First National Group (NZ) General Manager
(027) 222 2756

or Fleur Robinson
Tactic Communications Ltd
(0274) 661 777 

Deals are not the only things falling, with price adjustments across all rural sectors.

The quarterly survey taken last week across First National’s 70 offices nationwide measured market activity for the period mid November to mid February.

Over one third of rural sales offices reported deals in their region falling over due to lack of bank finance, although the number of deals overall was considerably lower than the same time last year.

The market with the most listings and sales for the quarter was lifestyle property, although in most regions prices were down between 5%-20%.

Price adjustments downward in at least one sector of the rural property market were noted by all of offices, averaging 7% - 11% less than the same time last year. Due to the low number of sales, price changes noted were based on listing price rather than sales price.

Notable standouts were Otaki, where lifestyle property prices were up 5% on the same period last year and a dramatic drop in viticulture land values in Marlborough.

Overall, demand for rural property was starting to pick up after a particularly quiet period but either supply was not there or the numbers did not stack up for finance for sales to follow.

Advice for sellers by 45 % of respondents was to meet the market with price reductions if they were serious about selling. A further 18% advised rural landowners not to sell unless they had to.

Advice for buyers centred round confirming finance before attempting to buy. Many noted vendors were becoming more motivated to sell and several believed prices in their area would not go much lower.

Cromwell, Taupo and Marlborough were tipped as good places to buy. In Marlborough where First National has 51 viticulture listings, prices for viticulture properties were reported to have dropped up to 40%.

First National Group general manager John Stewart noted continued extremely low sales volume and the negative effect on sales of bank demands for, in some cases well over 50% equity by the buyer.

“Dairy property purchasers are very much under the gun in so far as bank equity demands and this is definitely keeping private buyers out of the market, while the likes of viticulture properties are suffering from the worldwide downturn in wine consumption and bottle price.

“Limited lifestyle block sales in most areas seem to be tied more to the difficulty middle and upper market urban vendors are having selling their properties than to real demand for ‘a bit of rural land.’

“While the dollar stays high, banks continue to demand unusually high purchaser equity and worldwide consumer prices and volumes remain low, we don’t see much change in sales volume imminent.”  Stewart added.

Highlights of the survey were:

* Unusually low number of sales and deals overall for this period compared with the same time last year.
* Nationwide, finishing farm and lifestyle block prices were down by an average of 7%.
* Nationwide grazing and arable land prices were down by an average of 8%.
* Nationwide dairy land prices were down by an average of 10%
* Nationwide, horticulture and viticulture land prices were down by an average of 11%.
* Lack of enquiry for dairy farm land on the West Coast and lifestyle properties prices there down 20%.
* Viticulture properties in Marlborough at least 40% lower than the same time last year.
* Grazing and dairy land prices in the Waikato were down 10% - 30%.
* In Canterbury, dairy land prices were better, only down by up to 9%. Arable land prices were down about 13% but based on listing prices rather than sales.

Note: The survey did not include rural property in the Southland region.

Buyer interest is high but commitment is low in a gloomy property market, First National says.

The group’s regular monthly office survey (this time taken over two months – December and January) measures key indicators including open home attendance, website enquiry, listings and numbers of contracts signed.

First National Group (NZ) general manager John Stewart said of the network’s 70 offices nationwide, around half reported healthy levels of buyer enquiry for this time of year but also an increased number of agreement defaults.

“Across the market there is a reticence to commit to paper and those who do are increasingly using escape clauses to get out of agreements.

“Buyers are not only doing their homework well but support services, such as building inspections, and banks are having increasing influence. Minor repairs that may have been accepted six months ago are now causing contracts to fall over while funders are demanding greater equity than in the past, limiting prospective purchasers, especially in the lifestyle and rural markets, but also in the urban centres.
“It’s tough for many sellers out there right now.

“Our survey indicates many compelling reasons for general market uncertainty and tightening household budgets. Unemployment, shortened work hours, the festive season, holiday costs and general rural income uncertainty along with disquiet over Government-led tax change proposals are all affecting general confidence.

“Our website is showing all time high visitor numbers but for the reasons above these are not translating into sales.”

For the first time in at least six months, first home buyer enquiry had dropped in multiple regions.

Middle sector house sales also appear to remain stalled.

“The drop in values over the past year or more has damaged many mid-market owners’ equity to such an extent that they will be presently unable to attract bank support for a new purchase should they wish to move on,” Stewart said.

“As we commented late last year, we anticipate these tight conditions in most markets may not let up until at least Spring.”

However, well-presented and well-priced properties were still being snapped up and in some cases, fought over by serious buyers, Stewart added.

“People who need to sell for financial and career reasons and those developing an investment portfolio will in the main be the movers this year.”

Survey results showed:

Trends
• Increased investor activity noted in Wanganui, Geraldine, Otaki and south Auckland.

• Rural sales still quieter than usual in all regions and even where interest in purchasing exists, banks are scuttling most propositions.

• Fewer buyers seeking lifestyle and coastal properties.

Sales
• Sales volumes are consistently 20% up on the last year’s rolling average, but still well under half the average volumes of 2006 and 2007 in most regions.

Listings
• Looking ahead, listing inventory overall has increased just 2% between 1 November and Feb 1.

• Listings in Auckland have tightened since 1 Nov and are currently 18% lower. This is due to a combination of brisker sales activity in eastern and northern Auckland and a slow down in new properties coming to the market.

• This was balanced by an upswing of listings in the Waikato, of 17.5% over the same period.

• Across First National’s offices in Northland, Bay of Plenty, Taranaki, Manawatu/Wanganui, Marlborough, Nelson, Canterbury, Otago, Southland and the West Coast, listings have remained relatively stable, rising or falling less than 5% in each region since November.

However, signs of nervousness from investors worried about the Government’s tax proposals are being reported by some of the larger offices, as highly leveraged landlords consider selling. 

First National General Manager John Stewart said the swing of the pendulum toward an undersupply of rental properties was the most marked change in the past nine months. 

“Tenants seemed to be reacting favourably to the Government’s 2009 drive to upgrade home insulation by seeking modern or modernised homes. 

“While the pressure on larger homes is pronounced in a number of areas at present, it’s too early to confirm whether that is just part of the annual holiday home rental bulge, families shifting to a new area or if it is a reflection of a larger group of people
who are not able to or do not wish to purchase. 

“Time will doubtless confirm the nature of the pressures behind the apparent trend.” 

Supply versus demand
Overall vacancy rates have halved since the middle of winter, and a quarter of offices reported occupancy rates of around 99%.

The majority of property management agencies (54%) reported undersupply compared with demand, 17% reported oversupply, 25% reported supply/demand balance about right. 

Areas of high demand from tenants included south Auckland, northern Wellington, northwest Christchurch, and, to be expected at this time of year, the coastal towns of Waihi, Coromandel, Waiheke Island, Nelson, Motueka and Blenheim. 

Trends
Higher quality homes were in demand overall, with “cheap and cheerful” rentals in excess supply. 

Investor activity was up in 21% of offices. Nervousness over potential property tax changes was noted in investors in Marlborough, Wellington and Christchurch. 

Rents
Rent increases in at least one sector of the market were reported by 33% of offices mainly for properties with at least 4brms, possibly reflecting seasonal demand for holiday home rentals. 

Properties with two bedrooms were in lowest demand, and the majority of offices reported rents for these were either static or dropping. 

Rents for 3brm properties were generally static or rising slightly. 

Houses with four or more bedrooms were in highest demand, sustaining rent increases of between $10 per week and 7% of weekly payments. 

Summary:  

• First National’s occupancy rates are up with the average vacancy rate dropping to 3.0%, from an annual high of 6.3% last July, and 4.9% last October.

• Increases in rent varied between $10pw to 7% of weekly rent.

• Properties with 2brms were in least demand with 21% of offices reporting rental drops of up to 5%.

• 46% of offices surveyed described rents as static overall, 21% said rents were dropping and 33% reported rises in at least one sector.

Note:
First National Group is New Zealand’s third largest real estate brand with 70 offices throughout the country from Kaitaia to Invercargill. The network manages more than 6500 properties on behalf of landlords. This survey takes a snapshot of changes in property demand, rents and vacancy rates at First National Group offices since October 2009.