Uncertainty slows the market nationally but is Kerikeri bucking the trend?
If there is one word that sums up the current real estate environment across New Zealand it is UNCERTAINTY.
- Uncertainty about new bank lending rules implemented December 1st 2021 and their affects
- Uncertainty about rising interest rates
- Uncertainty about the effects of the war in Ukraine and
- Uncertainty about the safety of travel as Omicron spreads.
Our experience is that most people deal with uncertainty by pausing on major decisions until the uncertain environment becomes normalised and life carries on. A lot of property markets across the country are feeling the impact of this tendency towards inaction. Fear of missing out (FOMO) has switched to fear of over paying (FOOP) and a wait and see approach is being taken by the more cautious.
Against these headwinds, our staff are still seeing plenty of interest by city dwellers who want to move to Kerikeri for a better quality of life. No longer tethered to their location close to the office, these folks are now bringing their jobs with them, to start new lives in Kerikeri for their families. The lifestyle provided by our location in the beautiful Bay of Islands, temperate climate and good schools combined with the conveniences of fast internet for work access, relatively close proximity to Auckland and an airport make this an easy choice for city dwellers looking to make a move. Consequently, Auckland is now one of the few places in the country where population is rumoured to be shrinking while the provinces prosper from extraordinary growth.
Our new listings are stacking up “Watchlisters” on platforms such as Trade Me and Realestate.co.nz. A large percentage of these are from areas outside of Northland. Interestingly, attendance at our open homes has been predominantly from local buyers. Many out of town buyers who we have spoken to are waiting for Omicron to peak before making travel plans to view our listings. Some cannot travel from being in self isolation.
While other parts of the country are reporting declining prices, Northland is an exception, rising 7.9% in the last 3 months. Kerikeri’s 3 month average median house sale price set a new record at $1,080,000 and has now been over $1 million for 4 consecutive months. We are still experiencing multiple offers on properties and especially those priced under $1million. Residential sales volumes are down 27% in the first 2 months of 2022 with 51 unconditional sales reported compared with 70 in the same period last year.
There is no doubt that the panic buying of 2021 has dropped away in 2022 and that higher stock levels are now providing more choice for buyers. Properties are taking a bit longer time to sell than last year but they are selling and prices appear to be holding for now. The trend in 2021 was for vendors to have price expectations a little ahead of the market and often above the recommendations of our appraisals. Now our advice for vendors in 2022 is to price properties sensibly within the appraised range as they are competing with more property sellers.
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.