05 Jul Recovery? Don’t bet the house on it
With so many different housing organisations around, it is sometimes difficult to know where to turn for accurate and up-to-date information. Photo / NZ Herald
A spring recovery or a year in the doldrums?
By Anne Gibson
The housing market is all over the place if the reports from a throng of organisations lately are to be believed.
Our housing sector has a confounding array of statistics issued by many different outfits, each with their own agenda.
Every month about half a dozen organisations get lippy about housing, saying what they think the housing market is doing, why and what they expect it to do next.
All that get lots of publicity but most of them say different things depending on how they reached their calculations, what they measured, what time frame they used, whose interests they were serving and what audience they were aiming at.
Precisely who is right or wrong is up for debate. For renters, home owners and buyers, the picture is as clear as the view out a dirty window.
Most of us know the housing market is not in great shape right now but is it about to make the spring rebound being predicted this week by realestate.co.nz?
Do we have a looming shortage of housing as BNZ chief economist Tony Alexander also said this week?
Is now the best time to buy as the agencies say or should people hold off?
One thing many of the experts agree on: QV has the best data and is most trusted. And its latest data set shows the market picking up somewhat – or slowing down less.
The Economist uses QV in its international list of more than 20 countries and we’re in the middle between The Netherlands and Spain in terms of price falls.
Not as bad as Singapore (-21 per cent in the last year) or as good as Switzerland (+5.3 per cent) but hovering somewhere in-between.
Many economists rank QV the highest in terms of accuracy and that says prices are down 8 per cent on a year ago.
UBS economist Robin Clements said the trade-off on the various statistic sets of data bases was always accuracy versus timeliness.
“QV is the final word on house prices but comes out with a long lag. QV’s monthly ValueMap is more timely but doesn’t perfectly reflect the quarterly data. REINZ is also timely.
“Its sales is a good lead indicator on consents but its median prices can be volatile compared with QV. Harcourts and Barfoots are even more timely on sales and prices but you have to recognise they are not the whole market,” Clements said.
Business Herald economics editor Brian Fallow compares the many house price reports to flickering strobe lights in a nightclub.
“If you link them all together, you might get some idea of what’s going on but it’s not a calm or steady illumination of the scene,” he said.
Each organisation can reach opposite conclusions about the market even within the space of four weeks.
At the beginning of June, REINZ said prices were dropping but sale volumes had picked up.
At the start of May, it said the opposite. Both were undoubtedly true, but what can be concluded from that?
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