Provinces lead property sales recovery

Key indicators show the property sales slump is bottoming out with the provinces leading the recovery, says First National Real Estate.

First National New Zealand general manager John Stewart said the past six weeks had seen better sales volumes for many offices in the network across the country, with some offices selling the same in that short period as what they had for the past six months combined.

"Our key indicators are leading us to believe the market has bottomed out and in some provinces, has already started on the up.

"Key areas we use to measure market activity levels are sales volumes,
contestability of offers, open home attendance and web enquiry. All four are showing noticeable changes in activity levels.

"Sales volumes are up on the previous low levels of the year. While prices are not what they were a year ago, they are at a level where sellers are accepting of them and increasingly buyers realize they reflect fair value.

"As a result, contestability is up. We are seeing increasing numbers of multi-offer situations.

"Open home attendance is significantly up on earlier low levels. For some areas that means 12 groups instead of four. For other areas it might mean six groups instead of one or none."

Web enquiry had consistently stayed high all year showing continued high interest in real estate despite the recent standoff between buyers and sellers, Mr Stewart said.

"With a likely drop in interest rates being forecast for this week, and better weather which strangely does have an effect on sales, we believe the market has bottomed out in the provinces and better times are upon us. Perhaps there are people deciding that after a very wet and cold winter to be in another house or area before next winter arrives!"

While the dairy industry had pushed the rural market along, recoveries in the meat and wool, crop and food prices were likely to provide a wider spread of fortunes for the provinces.

"First National is very strong in the provinces. From what we can see, sellers and buyers in the nations towns are looking at a more settled year in 2009."

In the cities, the 'new family home' market, section sales and apartment markets were still sluggish, having been severely affected by the downturn in the building, finance and property development sectors which were still retrenching, Mr Stewart said.

"With less building and development around pressure comes on existing real estate. That could be good for the vendors who have been unable to sell over the past six months as long as they are priced correctly.

"Unlike the year to date, it could now be that in many markets buyers will need to act quickly to secure the home they want for fear that the increased activity could see someone else beat them to their choice.

"There is some good buying out there, right across the country and across market sectors as more sellers increasingly accept price settlements and in many cases, are keen to use their freed-up equity to contest their next property."

ENDS

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