HOW ARE PRICES FARING IN THE KERIKERI AREA?
With all the negative news in the media it’s sometimes easy to feel negative ourselves. A wise friend said to me this week that we often don’t realise how little most of the reporting of what’s happening around the world actually affects us in our day to day lives. By living in the Kerikeri area we are fortunate to live in one of the most attractive places in the world, with a moderate climate, a reasonably stable political environment, mostly friendly people around us, low violent crime and opportunities for growth for those who are prepared to put the effort in.
Our town, Kerikeri, offers visitors a sample of a more relaxed way of life, one that is more in touch with nature, has a deep cultural heritage and provides easy access to the world class maritime playground, The Bay of Islands. Our unique offering continues to attract people from all over New Zealand and the world to start new lives. Local residents we speak with who appreciate the unique benefits of living here count themselves fairly fortunate. At REAL, we are all very grateful to be working in this vibrant community, advising and helping people with their property decisions. The attractive nature of our little town means we continue to grow. It also means our local property market can behave quite differently to other places around the country as a result. So here are the facts.
The top question on most people’s minds at the moment seems to be “how are prices faring in the Kerikeri area?”. The short answer is that median house prices are holding up in our town despite more significant drops in other parts of Northland and most parts of the rest of the country. Unfortunately, the narrative from our national media is usually heavily weighted on trends in our largest city. The median house sales price (on a quarterly moving average basis**) dropped by just 0.5% from July 2021 compared with a drop of 2.4% for the same period in the Auckland region and an increase of 2.4% for all New Zealand. Kerikeri prices have dropped just 1.1% from their peak level versus a 12.4% drop in the Auckland region and 7.3% for all New Zealand. Other good news for Kerikeri homeowners is that prices compared with 3 years ago are still up over 30%.
While the median, or middle price, has remained fairly level, there are indications of price reductions in price bands of the market where inventory levels are higher. In particular, there is a 65 week inventory of homes in the $1.5 million to $ 2 million bracket. This means vendors are competing with a lot of other vendors for fewer buyers and are having to be sharper with their pricing. Other pockets of the market, particularly under $1.1 million, are in short supply and prices are holding up and well-presented homes are selling at record prices in some instances.
The volume of bare land sales is down significantly in 2022 driven by fears of rising construction costs and hassles sourcing materials and consents. However fully developed sections are still in relative short supply compared with the historic average, so there is not the same pressure to reduce prices as was evident when GFC slowed sales in 2008 and inventories were so high it took until 2015 to sell the backlog off.
The volume of total property sales this year through July 31st is down by 33% from the same period in 2021. This is similar to the comparison of year-on-year sales levels last month. There were 24 sales in July 2022 compared with 37 sales July 2021. Total Inventory levels as of August 2nd have increased year on year but are stable compared with last month. There were 212 unique listings on Trade me this month compared with 215 last month. i.e., the sold and withdrawn listings are about equal to the number of new listings.
We are seeing more action from local buyers because they now have more choice and less competition from city buyers. Our typical feeder markets, Wellington and Auckland, continue to show lower median prices and lower sales volume. There is more positive news that New Zealand is high on the radar screen for travel from other countries now the border is opened. This bodes well for our local tourism economy and can also bring new buyers into the market. First time home buyers also are getting some relief as banks implement more reasonable screening as part of their lending criteria. Lastly, we have encountered more younger families moving from the cities to work their jobs remotely. How these various forces on our market play out over the next year is unknown but experience tells us there are always reasons people need to move, buy and sell homes in any market.
Our office recorded 10 sales in July and had over 40% of the total residential sales recorded in Greater Kerikeri for the fourth month this year. We are very proud of the effort our high-performing team has put in to get the job done for our vendors in a changing market. Our unique system of working cooperatively, continues to produce outstanding results for our clients. Our relatively small team of 7 agents, represents less than 10% of the total number of agents selling residential real estate in Kerikeri. Through collaboration, sharing workloads and helping each other, we have produced 35% of the residential sales recorded in Kerikeri this year. Said another way, our salespeople produce nearly 5 times more sales per agent than the average number of sales per agent across all other agencies. Proving the point that size doesn’t matter. In fact, our record of producing the highest number of residential sales in Kerikeri, year in and year out, has remained unchallenged for nearly 20 years.
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.
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*Greater Kerikeri approximated the Kerikeri High School enrolment zone and includes Waipapa, Doves Bay Peninsula, Inlet Road Peninsula, Kapiro, Waimate North Road and branch roads, Wiroa Rd and branch roads, Pungaere Rd and branch roads, Puketotara Rd and branch roads, Waipapa West Road and branch roads, Takou Bay.
**We use quarterly moving averages as these mitigate some of the wild monthly variation that occurs when reporting monthly medians on smaller number of sales.
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Mar 7, 2024
Market Update: February 2024
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