Kerikeri Market Update - End of Spring 2019
Volumes down, prices up.
Market summary:
Sales volumes over the autumn and winter of 2019 stayed fairly level at around 27 per month and we did not see the usual boost in activity exhibited over the August to October period like we have witnessed over the past 5 years. The good news is that enquiry levels over recent weeks have increased significantly and more sales are being recorded in the first few weeks of November than any other month this year. We believe there is renewed optimism in our market on the back of positive media reports about increasing sales and prices across New Zealand and now in Auckland also. Chief economists for ASB and Westpac have both issued forecasts for rising prices in Auckland and we are hearing that sales are up and auction rooms fuller in our main centre. As we know when Auckland sneezes we catch a cold and we are optimistic that this recovery is the beginning of a new upturn in our own property cycle.
As a result of the slow start to the year and average sales over winter, Total land and house sales volumes for Kerikeri are down 17% for the year to the end of October compared with the same period in 2018 and have returned to more average levels from the boom levels of 2016 and 2017.
Annualized median prices for residential homes have climbed up $682,000 in recent months up 4.6% on October 2018. This is well above the annualized median for New Zealand ($580,000) and Northland ($490,000).
The middle of the market ($600,000 to $800,000) has continued to perform steadily but activity in the higher price brackets (over $1million) has slowed after a record year in 2018.
Lower stock levels of homes under $500,000 have kept sales volumes low (8% of total sales compared with 11% in 2018) although time to sell for these properties is relatively short when they do come on the market.
Building is still a popular choice as bare land continue to make up about 18% of total sales similar to the same period of 2018.
Results by sector:
Houses
The over $1 million housing bracket sales volumes are down by a 21% on the 2018 volume. There have been 30 sales in 2019 compared with 38 in the same period 2018. Lower demand and higher numbers of competing properties on the market are resulting in longer times to sell and some vendors have had to reduce their asking prices to meet the market. There are signs of demand increasing in the latter 4 months this year after a slow start.
The middle and upper middle of the market ($500 – $1,000,000) has performed reasonably steadily but overall volumes of sales are down 10% compared to 2018 (165 compared to 182). 63% of home sales fell into this price range.
The lower end of the housing market (under $500,000) experienced a slower year so far, with 21 sales compared with 39 last year, due to limitations in stock. Demand for property in this price range has increased from first time home buyers and investors as deposit requirements and interest rates have been lowered. Current stock levels under $500,000 are virtually non existent and the new starter home price in Kerikeri is likely to be above $500,000 in 2020 if this trend continues.
Bare Land
Residential section sales volumes for 2019 are up on 2018 at 32 sales compared to 23 during the same period last year. Lifestyle bare land (i.e. land over 1ha) sales volumes are a much slower with 12 sales this year compared with 26 in this time last year.
The annualized median price for sections in Kerikeri has reached $265,000 in October 2019 and has risen 21% from October 2018. Median prices are now back above the national average of $260,000 for the first time since 2009 and above the Northland average of $248,000. This is a long awaited correction in Kerikeri land prices as they had been consistently above the national average price for a decade prior to 2009.
Commentary:
Based on current high levels of buyer enquiry and listing activity, renewed optimism from bank chief economists on the property market particularly in Auckland and continued positive media releases we are expecting a pick up in completed sales over the rest of 2019 and into summer. Strong net migration into New Zealand and low interest rates typically have pumped the NZ property market.
Our team has been busy working on appraisals and focusing on ensuring we have the most expansive choice of properties available on the Kerikeri market for the remainder of 2019 and beyond. (You can view our new listings here)
We thank all our customers for their continued support and for consistently making REAL Kerikeri’s number 1 choice for your real estate sales. We are excited about prospects ahead for the rest of 2019 into 2020 and look forward to the opportunity to serve you whether buying or selling in the future.
(*Source REINZ)
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