Kerikeri prices continue rise, inventory levels starting seasonal rise but still at record lows
Similar storyline to last month. Record prices still being achieved but signs prices are levelling off a bit. The number of properties for sale and the time to sell is at record low levels. The Auckland lockdown has resulted in homes being sold sight unseen.
What’s happening with house prices?
The quarterly median price for a house in Kerikeri for sales completed during the 3 month period of August, September, October was $905,000. That is up a massive 31% from the same period 1 year ago and down 0.5% from last month.
What are the market drivers?
As we have covered in previous reports, the effects of low interest rates, returning expats and strong migration of New Zealanders from the cities to the Far North has caused a dramatic upsurge in enquiries and sales. This has led to diminished inventory of properties for sale across the district.
The latest Covid-19 lockdowns have reinforced how people around the country can successfully work from home. We are hearing time and time again from city dwellers that they are fed up with taking the brunt of lockdowns. As soon as lockdown lifts they are looking to travel up and find their new home so they can work where they want to live. With the opening up of Auckland getting nearer on the horizon, we are anticipating a onslaught of direct serious enquiry. Auckland sales volumes are down 39% during the latest lockdown months and it is expected that a “sugar rush” of buying and selling over coming months will create more cashed up buyers for Kerikeri and other provincial towns.
Despite the level four lockdown in Auckland we have received offers “sight unseen” on properties often from buyers desperate to find a new home in the area. Fortunately, technology allows our industry to continue operating efficiently as agents, vendors, buyers, lenders and solicitors all interact on-line. This has kept the majority of existing sales moving forward even in the highest levels of lockdown. There is no doubt that more Auckland buyers would have taken action had they been able to come up and inspect their prospective new homes.
How are the number of sales tracking?
Kerikeri and surrounds had 92 unconditional residential, lifestyle home and bare land sales in August, September and October compared with 165 sales in the same period last year. A 44% percent decrease driven by low inventory levels and the fact that most bare land sales are awaiting title with Covid delays extending the subdivision timeframes.
Bare land sales are significantly down from 33 over the August, September and October period last year to only 16 this year. There are very few sections now left available for sale in Kerikeri and those development that have come on-line in the last year have sold out off the plan well before titles are issued and often before the works have even begun.
What about bare land sales prices?
The median price for a section under 1ha in Kerikeri reached $475,000 for June, July, August but has dropped to $360,000 in the last 3 months. This has been driven by some older subdivision titles coming through with historic sales values and statistical variance due to low sales volumes. In fact the number of sections on the market is at a 20 year low with fewer than 4 for sale under a hectare and no fully serviced sections for sale at all.
How long is it taking to sell?
Days to sell have dropped from an average of 65 days for sales in August, September and October 2020 to 35 days in the same period of 2021. This is well below the normal 10 year average of 55 to 60 days for our area.
How are inventory levels tracking?
Inventory levels are up to 145 listings for sale on Trade Me in November from 125 a couple of months prior and down from over 200 a year ago. The average number of properties for sale was around 400 over the last 10 years.
How many new listings are coming to the market?
New listing levels are starting to pick up as vendors who put their plans on hold come to the market and the usual Spring rush of activity begins. Also, vendors don’t want to miss out on the heat that has been in the market and the anticipated rush as Auckland opens up. FOMO from vendors with rising interest rates could bring more stock to market over coming months. However, with many buyers who have already sold and are ready to buy, enquiry is very high immediately after the advertising starts and sensibly priced, well-presented properties are often flying off the shelf quickly. So, despite an increase in new listings coming to the market, inventory levels are expected to remain relatively low.
What is the outlook for the Kerikeri market?
Interest rate increases over recent months and LVR restrictions are starting to unnerve some vendors and buyers. More interest rate rises are expected. First home buyers, who have not traditionally been a high percentage of the market in Kerikeri are often priced out of the market. Based on high numbers of enquiry levels from out of town buyers we are expecting the migration to the Far North to continue strongly. Assuming these trends continue then we can expect our local market to stay strong for the foreseeable future.
As lockdowns lift around the country and Aucklanders are freed for travel it is anyone’s guess as to how much pressure this will put on the Kerikeri market place. There may never be a better time to sell.
Pop in for a coffee and a catch up with any one of us if you are thinking of buying or selling.
Source *REINZ
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