Alex Tarrant over at Interest.co.nz had a couple of, well, interesting posts on the housing market in NZ.
There is a piece on the February housing statistics, which rose dramatically versus January, although the median price stayed down, and the number of days to sell was a record 62. Alex also looked at the REINZ commentaries over the last year, and to their credit REINZ has pretty much got it right each time.
So let’s look at the total year on year dollar transactions for the real estate market over the last year and a bit:(Red is older, green most recent)
It’s been a pretty steady decline from October 2007, though February was an excellent month this year.
Let’s look at what is near and dear to the industry – estimated commissions. I’ve just used 3.5% as a wild guess – what’s important are the orders of magnitude. The fives months between September 08 and January 09 saw $182 million more less in commissions for the industry than the corresponding period a year earlier. $182 million pays for a lot of agents, and a lot of agents’ flash cars and investment properties.
Let’s also smooth out the effect of a lousy January and a great February – and apply the average of the two to them both. You can see that we are not really seeing a resurgence.
Finally, as The Bank Manager notes in the comments on interest.co.nz, the February sales in 2009 were a huge drop from previous years. This chart is telling:
Things are really not good for the real estate industry, nor for homeowners with large mortgages and uncertain jobs. Nice February statistics are a start, but is it a bounce or a dead cat bounce?
<update. Alistair from realestate.co.nz has introduced an excellent chart:
This is really scary – it shows we still have quite a way to fall. Brace yourselves – and remember that these things tend to overshoot.>