Private property issue #60 - 5 graphs you need to see

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Tony Alexander, an independent economist, joined us on the Property Academy Podcast this week.

In the podcasts, he talks about the 5 graphs you need to see to understand the property market right now.

Here are the graphs (below).

And some exciting news – you can get all this data (for free) as part of Data Hub.

Data Hub is a new section on the Opes website that lets you explore all the data you need as a property investor.

Let’s look at the graphs –

#1 – How house prices are changing month to month

Tony suggests first looking at how quickly house prices are changing on a monthly basis.

He specifically says to look at the REINZ house price index – the most reliable data for how prices change from month to month.

Look at how New Zealand’s house prices are changing right now.

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Last year property prices were falling over 2% a month (in some cases). See how the trend is starting to improve?

You can also get the monthly and annual house price change for every region in Data Hub.

#2 – How many properties are selling per year

Next, look at how many properties have sold over the last 12 months.

While the total number of property sales doesn’t (directly) impact house prices … a high number of sales represents a hotter property market.

This means property prices typically tend to increase at the same time.

Here is how NZ property sales are tracking right now:

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Sales are low.

And there aren’t many times in NZ history where fewer properties have sold.

Could this indicate that we’re near the bottom of the market and that more property sales could come soon?

Keep an eye out for the change. These Data Hub graphs are updated every month as soon as the new data comes out.

#3 – How quickly rents are going up (or down)

It goes without saying – if you plan to invest, you need to know what’s happening with rents.

Rents are different in each region.

For instance, the median rent in Wellington is often up and down. Right now, it’s $625, up from $580 3 months ago.

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But in Auckland, the median rent is $600, and rents in the region are typically more steady. 

#4 – The number of listings on the market

Next, look at how many houses are on the market (also known as the Housing Stock).

That’s the supply of properties currently available to buyers.

Today there are a bunch of listings. Or at least compared to a year or two ago.

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That shows that the pressure has really come off the property market.

According to Tony, it’s likely that there are a lot of people wanting to buy property.

These people have held off buying because they’ve been waiting to see what happens with the market (and the election).

At some stage, people will say: “We’re close to the bottom [of the market]. We’re going to move now.”

According to Tony, "That 18-month queue steps forward, and the listings drop".

#5 – Net migration – how many people are coming to NZ

Net migration is the difference between the number of people coming into the country (immigrants) and those leaving the country (emigrants).

Why does this matter?

Because generally, net migration will push property prices up.

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Right now, people are pouring into New Zealand. Over the last year, net migration added over 65,000 people to our population.

These people all need to live somewhere, which will add heat to the Auckland property market.

That’s because Kiwis leave from around the country, whereas new migrants tend to settle in Auckland.

Get all this data (and more) for free

All this data (and more) is free within Data Hub.

This includes the latest REINZ data that came out this week. And we’ve set it up to quickly update as soon as it’s released.

Have fun exploring.

P.S. Is there a graph missing in Data Hub? Something you really want to see? Hit reply and let me know what chart you’re after, and I’ll see if we can get it online for you.