Waikato: A bellweather property market?

One tool which is being used more is tracking traffic patterns on relevant websites. Alistair Helm at realestate.co.nz has been doing just that and has suggested the Waikato market may be a ‘bellweather’ region.

Statistics show Waikato was one of the first regions to go into the slowdown. This has been confirmed by real estate agents such as Lynn Eagar. He agrees with the report’s findings, which show the first signs of the slowdown in the property market came “way back in the late summer of 2007”.

The report says sales began to tumble from their peaks of 600-plus per month and sales volumes began rising from a base of fewer than 3,000 in the first quarter of 2007, to close to 4,000 by the end of the year.

The question is whether it will be one of the first regions to pick up.
Helm isn’t going so far as to say that it will be one of the first to recover, but will be watching it closely.

Eagar says he noticed that even in late 2006, the market had started to change.

“If you look at the statistics, the volume dropped off slightly in late 2006. Then it continued to drop every month through 2007. But because we were coming off such a high base, it didn’t really kick in until September 2007.”

Back then, Eagar sent a note out in his newsletter saying the market had contracted. “Certainly when I look back now, I realise the stats had started to indicate the fall in 2006. We probably were a bellwether and I didn’t realise it.”

Eagar says from February 2008, “the penny really dropped”. The interesting thing, he says, was the same thing happened in the Waikato in the 1991 downturn, “which was the worst period since I have been in real estate.” The warning signs for the downturns came early to the Waikato for both periods. This time, he says, the Waikato has felt the slowdown more keenly “and the rest of the country is still following us”.