Kerikeri, a town experiencing a population boom
Kerikeri market commentary April 2021
Kerikeri is the Far North district’s largest and fastest growing town with an annualized growth rate of close to 2% which is higher than most places across the country. Kerikeri’s population is often misunderstood as internet sites usually only quote the population in its central residential areas.
Greater Kerikeri is the township and the surrounding areas where people in our community live and regularly come to Kerikeri for services, work, leisure, school and to shop. This encompasses the area inside the triangle formed by Kapiro Road, State Highway 10 and Kerikeri Road plus the Doves Bay peninsula including Rangitane, Doves Bay and Opito Bay, the Purerua Peninsula with its communities in Te Tii and Tapuaetahi, north from Waipapa to Sandy’s Road, West to the ends of Pungaere, Puketotara and Wiroa Road where they join with Waiare Road, and South to Puketona Junction and Waimate North Road to Okokako Road, the Inlet Road area including Reinga Heights to the end of Wharau Road, Shepherds and Riddell Roads and its branches.
Estimates from the Council’s demographers, .id, show the population of Greater Kerikeri to be higher than 16,500 people at the last census in 2018. More recent informal estimates put the population at somewhere between 18,000 and 20,000. This represents more than 26% of the entire Far North district population and compares with Greater Kaitaia that has around 14% and Greater Kaikohe that has about 12%. The population increase in Greater Kerikeri accounted for over half of the population growth of the entire district over the last 10 years. That’s over 6 x the growth experienced in Kaitaia and 100 times the growth experienced in Kaikohe. It’s no wonder it seems like our infrastructure is creaking at the seems.
Median house prices in Kerikeri have risen over 8% in the last 12 months caused mostly by an increase in northward migration caused by recent Covid 19 events. Prices are approximately double where they were 10 years ago. The median price in Kerikeri for a house is $850,000 for the first quarter of 2021. This compares with $620,000 for New Zealand ex Auckland and is double the median price of both the Te Hiku (Kaitaia and surrounds including the East Coast beach areas) and Kaikohe/Hokianga wards. Annualized median prices for sections have risen 8.6% over the last 12 months. The median price for a section in Kerikeri over the last quarter was $350,000 compared with $280,000 for New Zealand ex Auckland. Section prices have tripled in the last 10 years.
Covid-19 has led to more people around New Zealand working from home and they can now choose to work where they want to live versus stay in the city near the office. This has created a “Zoom-town” affect, where attractive provincial towns are attracting people who can work from anywhere and commute via the Internet. Kerikeri is particularly attractive because of its location just 3 hours from our largest city, its airport, fast fibre internet connectivity, temperate climate and desirable lifestyle opportunities. In particular, the Far North beaches, golf courses and the fishing, sailing and boating on the Bay of Islands make for an inviting playground for many.
No longer are job opportunities a limiting factor on Kerikeri’s growth. In addition, ex pats are migrating back to New Zealand and choosing the Far North and particularly Kerikeri as their home because it provides the services and elements of the cosmopolitan culture they are used to. The lockdowns in 2020 provided an opportunity for people across New Zealand to re-evaluate their lives and make their moves to escape the rat race they have been thinking about for years.
Our opinion on the outlook is for these fundamental forces to be likely to continue because:
- more and more New Zealanders are reaching retirement age and looking for lifestyle change. This is supported by the huge investment being made in the area by companies like Arvida,
- there are still many ex-pats wishing to return home and live in the Bay of Islands,
- low interest rates are forcing retired investors to choose to buy land or houses over traditional Term Deposits to achieve higher ROI’s
On the supply side, Kerikeri has a shortage of homes and sections available to meet the high levels of demand. Listings are the lowest we have witnessed in 20 years of servicing the Kerikeri area. Many larger developers have ignored the Far North for some time as high growth rates and profit opportunities in Auckland and other larger centres have provided better opportunities at low risk. There was an oversupply of land for sale in Kerikeri after the construction boom leading up to the Global Financial Crisis. These sections are now all long gone. Those developers who have brought new sections to the market in the past few years have sold their land off quickly. Many recent subdivisions have sold out prior to construction being completed and titles being issued. In addition, constraints on wastewater infrastructure have led to a virtual complete stop in development of fully serviced sections of the past 5 years. Those developers fortunate to have secured connections have reaped the benefits of high demand and low supply resulting in rising prices. For example, Inlet Estate has struggled to build homes fast enough and has sold 31 of 48 house and land packages in just over a year which included Covid lockdowns. The recent completion of the wastewater treatment plant has opened opportunities for more land and more affordable house package options to meet the demand of this growing community.
Although the property market across New Zealand is likely to come under the influence of change in the future, we believe the Kerikeri market is better situated to deal with change, particularly because of the short supply and high level of demand being likely to continue especially in the retirement sector.
Project H
REAL has pledged to give $1000 from every property sale during 2021 to Hospice Mid-Northland aiming to raise over $130,000. You too can help make a REAL difference to Hospice. List your property with REAL or please refer us to a friend or relative so we can present a no obligation marketing proposal to them. We promise to deliver our friendly and professional service, produce the best results for our clients and provide REAL support to Hospice and their patients in our community.
Containing our opinion as local market real estate agents only. We are not registered valuers or real estate market economists. We recommend seeking independent advice before making any real estate purchase or sale decisions.
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