Signs of optimism are returning to the real estate sector. The media is reporting signals of FOMO returning to major centres and quarter-on-quarter price declines are slowing signalling the bottom of the market in those areas is being tested.
A steady July in Kerikeri with a total of 23 unconditional sales reported albeit 3 of these were lifestyle blocks sold in late 2021/early 2022 where titles have just recently been issued. That’s still up from the monthly average of 16 sales for the last 3 months. The house price index has dropped around 10% from the peak in the 3rd quarter of 2022 in the Bay of Islands ward.
All eyes are on the election this year as many investors wait to see if policy changes will make investment in housing more desirable. Section sales, usually a good indication of changes in consents and construction starts, are down nationally and locally but there appears to be enough work ahead for construction companies in the meantime. Some have already shifted focus to commercial or government contracts.
Net migration figures have been higher than expected putting pressure on the rental market in Auckland. Some of these people will be eligible to purchase homes in a year or so. It is yet to be seen how the impact of people transitioning to higher interest rates as their fixed terms end will impact the market around the country. According to one recent report from ANZ, the number of people unable to pay their mortgages is less than projected.
It also helps to see the sunshine a bit more often than in the first half of the year. This lifts the spirits and starts to get people thinking about making their next move. It is this time of year when we are busy preparing appraisals for the usual Spring rush of listings. Our advice is to move ahead of the herd and position your property on the market now while the stock is relatively low. In the end, prices paid are all relative to the economic principles of supply and demand so be ahead of the game to win.
You might also be interested in
Apr 9, 2024
Best Time To Buy
More houses for sale, the prospect of lower interest rates, and the likelihood of improved capital gain make this the optimal time to buy a home in Kerikeri. The Kerikeri market is experiencing a unique moment in time right now. Prices have settled into their new normal, lots of new stock is coming to the market and increased buyer activity is resulting in multi-offers. Some economists are suggesting that interest rates will start to decrease sooner than expected and predicting house prices to increase over the course of 2024. I have a view that the Reserve Bank has over-crunched the economy and will play catch-up policy easing from late this year. So, if I were borrowing at the moment, I would probably take a mix of 6 and 12 month rates. “Tony Alexander Economist. For buyers, this means that for the first time in years it will likely get easier to service a new mortgage over time rather than harder. This combined with expected capital gains, means now is a great time to buy. More stock means more competition for vendors. Presentation and pricing are more important now than ever. The ones that do, are likely to see a successful marketing campaign with possible multiple offers that will result in the best possible price in the current market. We expect the current market conditions to remain steady while the economy is correcting itself. First home buyers are back and this is a welcoming sign for a healthy property market. There is always a reason why someone wants to either move up or downsize. In a steady market you will find that the gap between what you are buying and what you are selling isn’t as huge. It doesn’t matter where you are, good houses always seem to find buyers, no matter what’s happening in the market. Right now is a sweet spot for buying. If you want to find out more about how our unique, high-performance system can help you achieve your property goals please give us a call or pop into our office anytime. We would be glad to show you around and make you a coffee while you are here.
Mar 7, 2024
Market Update: February 2024
A busy start to the year! It has been a surprising start to the year for us, with massive numbers of appraisals and new listings, a slow but steady increase in buyer enquiry and a fair amount of time advising and reassuring vendors that things will get back on track. We have recorded 16 conditional sales in February but more than half of these rely on other sales chains to complete. 75% of these are under $1million. Looking back REINZ reported 12 unconditional sales for January compared with 14 in December. This is a result of the typical lower levels of buyer activity in December leading up to the Xmas period. The outlook for February at the time of writing this report looks similar to January. Record numbers of new listings and appraisals On the reverse side, the number of appraisals and new listings coming onto the market so far this year has broken all records. The paralysis caused by the uncertainty leading up to the election, the delays with forming a government and then Xmas has led to a herd of sellers coming to the market at once. Consequently, inventories have shot up with latest numbers approaching 400 listings on TradeMe up from 340 just a few months ago. This is good news for buyers and sellers. It provides more choice for buyers than they had previously except in the lower price brackets where inventory is still slim. In time, it stimulates more activity across the whole market. More inventory and fewer buyers are shifting the higher price brackets firmly into the buyer’s market category. Inventories in the over $1million bracket would take over 2 years to clear at current sales volumes and motivated vendors with deadlines are seeing the writing on the wall and reducing asking prices to meet the market. Price outlook Our feeder markets are showing signs of an upswing with Auckland prices on the rise although sales volumes are still relatively low and 70% of auctions are being passed in. Most economists are predicting that the higher interest rate levels will continue to hold the New Zealand property market at bay for at least the next 6 months of 2024. Our observations are that most of our buyers are planning to make a sideways move to Kerikeri from another area or wish to downsize. Only a few are looking to upsize. This is a sign of our economic times in New Zealand. At our current price level, even people from many Auckland suburbs find it hard to move here and release equity to live on as they have been able to in the past. Until the price differential widens again (either increases in our feeder markets or further decreases here) then some people may choose to move to more affordable parts of the country. With the majority of buyers looking to downsize, the higher demand is for lower priced properties resulting in lower inventories and leaving high inventories in the higher brackets where demand is lower. First time homebuyers remain mostly non-existent which ties to our higher than NZ average prices, lower than average wages and a challenging lending environment. Investors appear to be sitting on the fence although a few seasoned, cashed up investors are starting to play their cards as opportunities present themselves. As reported in December, much of our sales activity depends on stimulus from Auckland and other centres. Usually a major shift in these markets takes 3 to 6 months to impact on ours. We watch with interest as these markets change over coming months.