The Greater Kerikeri Property Market
How Is the greater Kerikeri Market in comparison to the reports on national and regional levels?
The media does a great job of commenting on the property market at the national and regional level. And the commentaries are coming fast and furious at the moment. At the national level, trends are highly influenced by what is happening in the major centres such as Auckland and Wellington due to the relatively high volume of transactions that occur there. We hope that our breakdown of what is happening on the ground in the Greater Kerikeri area is more useful to our customers, both current and future.
Here are a few key summary points for the Greater Kerikeri property market:
- The volume of sales in Greater Kerikeri through April is down by 21% for the same period last year
- Median house prices starting to flatten on a quarterly moving average basis. We have yet to see the type of price decreases that the larger centres are seeing.
- Inventory levels have increased year on year but are fairly level compared with last month
- Our feeder markets Wellington and Auckland are experiencing lower median prices and lower sales volume, as much as 40% less in Auckland
- Uncertainty continues about the impact of interest rate hikes, inflation, tougher lending rules and the economic effects of the war in Ukraine
- There are some positive tail-winds as people are freer to travel now that Covid restrictions are lifted, more enquiry from returning ex-pats and overseas buyers on our shores, continued interest from city escapees and some relief from the prohibitive rules put in place on lenders in December 2021 that should allow more loans to be passed from June.
While other parts of the country are reporting declining prices, Kerikeri is still holding its own.
Kerikeri’s 3 month moving average median house sales price was at a similar level to last month at around $1,070,000 starting to signal that price rises are flattening out. There are a few warning signals as direct enquiry levels are down and fewer multiple offers are being negotiated. Kerikeri appears to be returning to a relatively normal state historically where most buyers visit, take their time looking and sell their homes to move here. We call it a “drip feed” market as opposed to a market where they are 4 or 5 buyers for every property for sale as soon as it comes on the market. It is critical that selling strategies need to adjust accordingly.
Residential sales volumes are down 21% in the first 4 months of 2022 compared with the same period in 2021. 111 unconditional sales reported compared with 130 in the same period last year.
Higher stock levels are now providing more choice for buyers and most seem to be more cautious than last year and taking their time in their searches. As a result, on average properties are taking a bit longer time to sell than last year but they are selling and prices appear to be holding for now.
Professional advice becomes more important than ever...
The days of pricing ahead of the market are gone for now. Our advice to vendors is to seek to fully understand the market they are looking to sell in and how much competition they are up against within their price band. If there is a lot of competition in your band then it is critical that your marketing accentuates the benefits and outstanding features of your property and the price will need be among the “most attractive in class” to sell in the shorter time frames. This is where our professional advice becomes more valuable than ever.
Our team at REAL is the most stable team in Kerikeri, thanks to our family values and cooperative and collaborative approach to selling real estate. Most of us have been through several industry cycles and our newer members get daily hands on coaching from other team members so they are up to speed too. As a result we have great depth and experience of how to produce the best results for our vendors in various stages of the market cycles. At this time, this experience is more important to you if you are selling your home. As we say, anybody can sell in a hot market, but the real value of experience comes to light when times are tougher.
If you want to find out more about what’s happening in our market or obtain a no obligation appraisal, please give any of our team a call or pop in to the office for a coffee and a chat.
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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.