The first quarter reflected this confidence with 14,500 sales. Our group market share hit a new high and this set a platform for what we felt was going to be a year that saw the industry return to better times. In April the Government started to mute on the basis of changes to LAQCs and also personal taxation advantages. Their dissertation behind this was to make property less friendly and steer people towards personal saving with the benefit of tax deductions and a higher awareness of Kiwi Saver. In the midst of all this came two interest rate increases. These were minor but enough to move property into an unfriendly position and to again be questioned as to its value from an investor point of view.
The second quarter plummeted. Sales were almost 30% down on the previous year and close to mirroring the numbers of 2008. Our group was acclimatised to these conditions, but you got the feeling this was going to set in for some period of time. In June we had our third interest rate rise which was enough to send the signal to the market that property sales were going to go into hibernation. Most in the industry understand that to have buyers you need to have sellers. Sellers come to the market when there is confidence that they can market their property to receive a satisfactory return on the price that they may have originally paid. The lack of confidence from sellers then began to domino towards the buying market.
The third quarter was the lowest sales every recorded on record at just under 13,000. The talk of loosening the monetary policy in regards to interest rates was a definite change in the Reserve Bank’s direction, whereby they openly admitted that the markets were in complete handbrake mode and this was enough to not only stall the property market but to also lessen the general confidence within the economy. There were other surrounding factors during the third quarter, including the net drop in immigration and high profile finance companies going into receivership. When all these factors were put together it led to a fairly sombre sales period. We turned the corner in the fourth quarter to see more listings coming on. This created better results in November to again give the feeling that we may see a more consistent market going forward.
The clear bright spot of the year was the success of our company to grow the business. We started the year with 121 offices and we had a record breaking number of new offices join our company. We finished the year in our strongest position, having 136 offices. What was notable during the year was that we were able to be brave enough to both terminate and not renew agreements where performance was clearly lacking. This, I believe, will be a period we will look back on that will be decisive in our growth going forward. We are totally committed to growth and opportunity. We have established ourselves as the only business that is credible in the real estate industry in our aspirations for leadership. The success of 2010 in having 18 new offices open has re-ignited our strong thirst for growth and while market conditions have been tough, we believe that our business has become more relevant than ever. Much of our positioning has been established during the past five years, where we have applied our industry leading One System and this is now recognised as the only system that is successful in New Zealand for a complete franchise business.
Our market share in Auckland on two occasions reached new highs of 21.8% and nationally we have moved over the 15% mark for the first time ever.
Along with our office growth, we have applied additional resources with the appointment of Corinna Mansell as our New Zealand Business Performance Manager and Celia Burbery as Business Development Executive – Property Management. This strengthens up our team to now provide additional resources to increase market share with the group that we have while layering on further market share with the introduction of new offices.
To the vendors and landlords who have entrusted our company with their real estate needs, we wish to say thank you. To those buyers, tenants and other people who have utilised the services of the broader Ray White Group, your patronage is appreciated.
Our Loan Market team has gone from strength to strength and have written just over $1 billion in home loan finance during the year, to be the second largest originator of property finance in New Zealand.