Archive for the ‘OCR’ Category

2011 has been a year of spectacular growth for the Ray White Group. We have welcomed a new office every 10 working days; culminating in 20 new businesses joining and starting up across the country. We have also effectively had 10 new business owners purchase existing Ray White offices.

Our Group stands at 131 offices with just over 1,180 salespeople, 220 property managers and 145 administrators. This year our sales turnover increased by 12%, which saw us transact $3.895 billion in property sales. Our property management portfolio has grown beyond 14,000 and our market share, particularly in the last quarter, has shown good growth across many of the areas we trade.

The number of sales that will occur within the industry will be 58,000 for the year and will be in line with 2010. The amount of property that has been marketed for sale has dropped by 10% during the year. This has effectively resulted in lower days on market and price increases across most centres throughout New Zealand. Productivity levels for our top 20 businesses increased by 23.8%. There was one interest rate reduction of .5% in March. The official cash interest rate has remained at 2.5% during 2011 and is expected to remain at the same level throughout 2012.

During the year we remained committed to the three pillars of our business growth, being marketing, personal skills and growth. Our marketing platform has seen us redesign our online presence and we have applied a number of superior applications which sees us continue to lead the industry.  Personal websites were also introduced during the year.  We have rebranded our marketing through the media to present further enhanced property presentation. This is now fully integrated with all publishers.

The growth of the company has been evident with the number of new offices that have joined and there have also been several high profile salespeople join Ray White from other companies.

Within this year’s Christmas message we make reference to the significant events that occurred in 2011 throughout New Zealand. To our people and their communities who have been affected by these events, we pay tribute to you.

Our Group will finish the 2011 year in very good shape. The industry continues to polarise.  The significant reinvestment that is required to be a leader in this market is our commitment. 2012 will be a year of continued growth as we enable our plan for genuine leadership.

On behalf of the Ray White corporate team and the White Family, we wish all of our members and their families a relaxed Christmas break and look forward to a successful 2012.

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The real estate market continues to show improved signs for all sectors within property sales on the strength of the continued low Official Cash Rate of 2.5%, steady immigration numbers coming toNew Zealand linked with the recent election that saw the National Party return to government with an increased majority.

Prices have continued to firm, particularly across Auckland where the average sale price has lifted during the past two months and is now $475,000 which is a lift since the beginning of the year of just under 4%. The numbers of sales also across Auckland have remained consistent during the past three months to be just below 2,000 per month and we expect this trend to continue throughout the final months of 2011 and during the first quarter of 2012.  What has been of interest is the increasing amount of property that has been marketed by auction, which is at a record high of 26.4%. Across New Zealand the sales numbers have also remained just above 5,000 per month and the average sale price has increased from $340,000 at the beginning of 2011 to $359,000 in October 2011.

It is now forecast that the Official Cash Rate will remain at 2.5% at least until September 2012. This will continue to give confidence to first home buyers and investors and this in turn will keep the market remaining active in the second and third home buyer areas.

The recent capital valuations received by property owners throughout Auckland are a definite reflection of the continued activity that has occurred in certain areas of Auckland and also those properties within the $500,000 to $1 million price bracket.

The outlook for property prices over the next period remains strong; with lower days on market and an active buyer pool this should continue to drive sales across all markets.

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The Ray White Group in New Zealand reported slightly lower sales last month following the first increase in official interest rates in more than a year. 

Ray White New Zealand CEO Carey Smith said while there was a four per cent increase on the previous month’s sales, the results were down 10 per cent on the June, 2009, figures. The Reserve Bank of New Zealand last month lifted the official cash rate to 2.75 per cent and Mr Smith said rates were forecast to go up over the remainder of 2010. “Our overall sales turnover would indicate that given listings are increasing and actual sales numbers are decreasing, then days on market will lengthen as will the overall success rate of property coming onto the market,” he said.  

Mr Smith said Ray White’s top office for June was Botany Town Centre, in East Auckland, which completed $16 million in sales. He said the number two office was Ponsonby, closely followed by Manukau and Howick with Kohimarama office completing Ray White’s five top NZ businesses. 

Other offices to produce a good sales month in June included Whangarei in Northland as well as Remuera, Pinehill and Royal Oak in Auckland. 

“In the Central North Island, Hamilton City, Papamoa and Bayfair recorded outstanding results while the Lower North Island zone saw Palmerston North and Taranaki complete better than expected results,” Mr Smith said. 

“The Richmond office was the leading business in the Upper South Island, while Redcliffs, Lincoln and Rolleston all had a successful sales month in Canterbury.  Arrowtown led the Lower South Island, with another good result from Queenstown.”   

Other key indicators saw controlled listing lift by 5% to 1532 with media marketing also increasing by 3%. Online enquiry surpassed 12,500 this month which was a further increase on last month which was 11,900. There has been some decline noted in open home attendees.In summary Carey Smith said “that it is balanced market with indications that buyers are prepare to make offers on properties that are inline with market value”

Reserve Bank Governor Dr Alan Bollard increased the official cash rate by 25 basis points to 2.75% and in doing so foreshadowed further small increases over the next coming months. 

This increase will affect property owners who currently have variable mortgages as the banks will respond with increases which are similar to the rise of the official cash rate.  It is expected however that most homeowners would have factored in this small percentage rise and the rises which are expected to continue during the next 12 months.  In his statement Dr Bollard made reference to the recovery that New Zealand was making in the economy and that although he was cautious in regards to the impact of the looming GST rise he believed that the confidence in the economy should convert to increased profits and stronger balance sheets for many companies.

Most business and service industries while seeing the increase as signalling confidence there was an air of caution in regards to the slowness of the economic growth and the recovery which is expected to be export led rather than consumer driven.  It is expected that the Reserve Bank will continue to steadily increase the cash rate until it hits close to 5% over the next 12 months.  There are two risks which are analysed when increasing the cash rate and that is the inflationary pressures and the return to indebted consumer spending. 

The New Zealand cash rate will be on a gradual path to higher overall interest rates rather than an aggressive path that has been taken by other economies.  The major trading partners of New Zealand throughout Asia and Australia also point to sustained recovery and with this the Reserve Bank trimmed its economic forecast slightly predicting a growth of 3.5% in 2011 which was down from the 4% forecast in March.

In summarising the impact of the interest rate rise on the property market Dr Bollard said that there should be a minimal effect as investors will continue to assess the recent budgetary statement along with the potential of higher returns from rental activity.  Those homeowners who are on variable rates should begin to consider the longer term effect of the rising cash rate and prepare to discuss the financial cost with their financial advisors.