BNZ-REINZ Residential Market Survey

10 May 2012

Real Estate Pricing Activity Lifting

Our latest monthly BNZ-REINZ Residential Market Survey has found an increase in the net percent of

agents reporting first home buyers active in the market, an increase in investor numbers, and a decrease

in requests for appraisals. The result of these changes is a surge to a record net 64% of licensed agents

reporting that dwelling prices are rising. The April result for this measure was just 25% and in May last year

a net 7% reported that prices were falling.

Yet in spite of clear gathering upward pressure on prices the market still appears reasonably balanced in

the sense of an absence of panicked buying. The real estate market in New Zealand is clearly rising,

prices are increasing, but again we reiterate – as the Reserve Bank Governor did earlier this week – there

is no “boom” underway. Just a growing level of interest from first home buyers and investors in particular

and an absence of a rush of listings.

Real Estate Pricing Activity Lifting

Our latest monthly BNZ-REINZ Residential Market Survey has found an increase in the net percent of

agents reporting first home buyers active in the market, an increase in investor numbers, and a decrease

in requests for appraisals. The result of these changes is a surge to a record net 64% of licensed agents

reporting that dwelling prices are rising. The April result for this measure was just 25% and in May last year

a net 7% reported that prices were falling.

Yet in spite of clear gathering upward pressure on prices the market still appears reasonably balanced in

the sense of an absence of panicked buying. The real estate market in New Zealand is clearly rising,

prices are increasing, but again we reiterate – as the Reserve Bank Governor did earlier this week – there

is no “boom” underway. Just a growing level of interest from first home buyers and investors in particular

and an absence of a rush of listings.

Is the number of people going through Open Homes increasing or decreasing?

Normal activity apparent

After surging at the start of the year the net percent of licensed real estate agents reporting increasing

numbers through open homes has settled back into territory of most of last year.

Is the proportion of Written Sales going unconditional increasing or decreasing?

Sales success rate remains high

A continuing high proportion of agents report that the proportion of sales going through to completion is

strong. This indicates no fresh developments occurred during the month to scare buyers away from the

market.

Are requests for appraisals increasing or decreasing?

Falling away

This is the first truly interesting result in this month’s survey. Only a net 5% of agents report that they have

received more requests for appraisals. We read this as implying that the shortage of listings in some parts of

the country is set to continue and that this has obvious price implications in a climate where good numbers

of people are still showing up to look at houses

Do prices appear to increasing, flat or decreasing?

Prices up

The change in this reading is very strong. A record net 64% of agents report that they feel prices are rising.

Only 35 out of the 414 respondents reported that they feel prices are falling. This outcome is directionally in

line with the results above showing fewer requests for appraisals and a lengthening period of strong interest

from first home buyers and investors.

Who appear more motivated to transact – the buyers or the sellers?

Market still balanced

In spite of the prices result just above it is clear that there is no bidding frenzy as such and this is a result

also which came through clearly in the real estate responses in our monthly BNZ Confidence Survey. There

continues to be rough balance between those agents who perceive buyers to be more motivated to transact

and those who perceive sellers to be the most motivated. We read this as signalling in conjunction with the

result above that prices are rising and will continue to rise but that there is no boom element to the

residential property market.