News

 Follow the link below to see the article on our No Commission draw in The Bay Chronicle.

 Whats Really Going on?

January of 2011 had a slow start to the year with only 12 sales recorded for the Kerikeri area. However February took off with 24 sales and this trend held steady for the remainder of the year. Land prices are steady with sales slowly improving and we are still predicting land prices to go up in 2012 as stock is diminishing and developers find it hard to create new stock for the prices we are achieving. In the first 6 months for the year we had high demand for homes over $500,000 while the later part of the year saw a surge for property up to $450,000.

The rental market is getting tight in Kerikeri with more people choosing to rent before they buy. Rental investors have been selling their homes and therefore we have a diminishing rental stock. Auckland has a shortage of homes and apartments and this trend is predicted to go on for some years to come with the prediction that Auckland will have 2 million residents before 2040, Auckland accounts for one third of the national population. Interestingly 50% of all our inquiry comes from Auckland and we can assume that if Auckland continues to grow so will Kerikeri.

One of the most frequently asked questions we get asked when people are considering the move to Kerikeri is “What do people do, and what are the employment opportunities?” It is quite interesting because on the surface there appears to be very little industry or manufacturing, however Kerikeri has become very much a centre feeder town to the Far North.

A few major employers are as follows:

 • The Horticultural Industry

• Education with 5 large schools

• Top Energy • Northland Retirement Villages

• Kerikeri/ Waipapa Retail Centres

• 3 Medical Centres

• Correctional Facility

• Forestry Industry

• Tourism • Farming

• Marine Industry with 2 large Marinas

• Government Departments

• 2 Major Supermarkets

• Many smaller manufacturing businesses

• Private contracting businesses

These enterprises all create employment which generates an income that creates turnover for Kerikeri’s internal economy.

Recently we had a scare in Kerikeri with the possibility of the PSA virus having infected some orchards, but fortunately this wasn’t the case as such a tragedy could seriously affect our region with the industry providing well over a 1000 jobs and turning over between $50 - $70 million per annum. We are all responsible to keep the virus out by warning people not to bring in any Kiwifruit plant material from other regions to Kerikeri.

We have heard that tourists bookings are up from last year and we are set to have a busy summer with lots of visitors coming to Kerikeri. Let’s make them feel welcome and experience the ultimate lifestyle that Kerikeri provides to all of us.

All of us here at Real wish everyone a very merry Christmas and a genuinely prosperous 2012. We would like to thank all those who have supported us through 2011 and we are looking forward to catching up in the New Year.

REAL WINS TALL POPPY GOLD!

The highlight of the week for REAL was winning another Gold Service Award from Tall Poppies. 

The whole team at REAL has worked extremely hard to achieve this award for the 3rd time and we are proud of the way we work together to achieve the best possible results for our clients. We would like to thank Top Energy for the hard work they put into the event every year, as well as organizing the venue, great food and fantastic company!

Keep an eye out on our social media accounts for some photos from our fantastic night out.

 HOW BIG IS OUR KERIKERI POPULATION?

The Kerikeri population is always open to conjecture, and often people talk about a population of around 5000 - 6000. However we talk about the population which encompasses the Kerikeri High School zone, we know that over 2000 students attend our schools. We also know that we deliver 9000 papers to homes in this area, so if you have an average of 3 people per household you can quickly work out that the old numbers don’t make sense and that Kerikeri and its surrounds has a much larger population and it is still is growing, and will continue to grow because we live in a great town, we have the Bay of Islands, the climate and of course the people that live here and make Kerikeri such a great place!

HOW BIG IS OUR KERIKERI  MARKET?

Well you can go on Trademe and see over 1000 properties listed for sale in the Kerikeri area and easily conclude that we have an over supply. But what you must realise is that a lot of properties are listed more than once with several different companies therefore the figures get distorted.

  At any given time the properties on the market in Kerikeri number between 300 and 400, this number is reducing fast particularly with demand increasing and very few new homes having been built in the last 4 years. All price brackets seem to be doing very well especially quality newer homes between $400,000 - $600,000.   What we have noticed recently is that there still seems to be a lot of homes without a code of compliance and some without proof that the home has been built according to the building regulations at the time. We have stressed this before in previous articles about how important it is to the value of your home. Banks are unlikely to lend on homes and most insurance companies will not insure homes without code of compliance therefore this will reduce buyer demand as there are only a few people who are prepared and able to purchase on these terms. The time to get organised is before listing, be pro active and avoid disappointment in the selling process. Check that your home is fully signed off and compliant now!    

  IS THERE IS AN OVERSUPPLY OF SECTIONS ON THE KERIKERI MARKET?

Land prices in Kerikeri are at the lowest levels in 9 years in many cases selling below the cost of developing the sections.  There are around 200 bare land blocks subdivided (title available) for sale around Kerikeri. About 80 of these are larger lifestyle blocks typically around 2 hectares (5 acres) and the rest are sections under 8000M2 (2 acres) with the majority between 3000 and 4000 M2 (¾ and 1 acre). Prices run from as low as $85,000 to as much as $750,000 for larger blocks or water frontage. Despite what seems like a wide choice, it is often difficult to find the section that suits our client’s particular needs. Building consents have slowed to less than half the volume of four years ago resulting in a shorter supply of new homes for sale in recent months. Over half of our buyers this year have come from out of town, up from about 25% normally, many of them active retirees. Many comment on how much more affordable it is for property in Kerikeri compared to where they have come from and compared to years gone by. Generally speaking they are looking for house and land packages for under $500,000. Some of our clients have found it difficult to secure newer, low maintenance homes that fit their specifications. Most prefer to move into their new home sooner rather than later and therefore building is not their first option. There are a few builders that have the funding and are entering the spec home market on the premise that the shortfall will lead to higher margins in coming months.

So how much does it cost to create a section? Of course it varies but let’s talk generally. Council fees run at approximately $30,000 per title, more if resource consent is required. Then the developer has to pay for roads, pavements, driveway entrances, street-lighting, storm water, power supply, engineers, planners, landscapers, water supply, sewer infrastructure, marketing fees, legal fees and telephone supply which can run around $50,000 to $80,000 per section. All of these costs are on top of the original land purchase price and the holding cost (interest) of the developer’s investment in the project. So the situation that many developers are now finding themselves in, is that the fixed costs are almost the value of the sections that are selling today. So there is no value for the land that the developer had to buy in the beginning. In other words, purchasers are getting the land for free at these levels - they are only paying for the improvements. Question: If you can buy a section below or at cost in a market where supply is diminishing and demand for building is likely to increase, do you think that you are likely to get a reasonable return on your investment? We’ll leave you to ponder on that one  

 TIME TO INVEST?

We have been speculating in the office as to what would be the best investment at present? Obviously well priced rental properties are blue chip because they give a return on the fund invested. However for those who like a little more risk and maybe a better return over a medium term, we think sections are worth considering.

At $100,000 - $135,000 for larger 3000M2 sections in well established subdivisions are gold! There a no new subdivisions being created and there has been record lows in the numbers of new houses being built, a lot of our new homes have sold so it stands to reason that eventually there is going to be a shortage and the old supply and demand theory will take effect.

If you have some investment funds available give us a call at the office and see what is worth while. 

Steven meets John Key  

The Real Road Trip

Check out Kerikeri and the locals from our roving team van.