Comment on REINZ Statistics to December 2010

January 25, 2011 at 1:41 pm

Recently Morice Ltd were asked to provide comment on the REINZ Statistics for the three-month period to December 2010. The following comments prepared by Mark Morice were published in Hawke’s Bay Today.

• The most important data that can be taken from the REINZ report is the low number of sales that have occurred. In a subdued sales environment the median sale price is significantly influenced by the type and size of property sold, and therefore is statistically a deficient measure when comparing median sale prices.

• In a period of downturn, generally higher quality properties tend sell which results in a higher average sales price due to the type of property being sold.

• Our own in-house analysis of economic sized sheep and beef properties greater than 200ha in the Hastings and Central Hawke’s Bay districts resulted in 7 sales for the 2010 year, considerably less than 17 sales in 2009, 15 in 2008 and 31 sales in 2007.

• The average sale price for 2010 has lifted which resulted from higher quality properties being sold rather than a lift in the land values in general.

• Some further important points to note is that over the previous 10 years, pastoral property values in the Hastings and Central Hawke’s Bay districts have tripled and that a correction in land values was always inevitable given that farm returns during the same period have had a moderate increase, if any.

• Our view for 2011 is that the market will remain subdued and potentially worsen as more property is forced on the market.

• In 2010 the improved lifestyle market has resulted in a reduction in the average sale price along with the number of properties sold. Of significance within this market is that top end and remotely located properties have shown substantial reduction in value with the more desirable areas such as Havelock North and Tuki Tuki Valley maintaining values previously seen.

• Our analysis of the Napier and Hastings districts vacant lifestyle sales in 2010 has shown a 10% decrease in the average sale price from 2009 and a decrease of 26% from the peak in 2007.

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Oakley Trust Hawkes Bay Rural Market Report February 2011


January 2011

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