Blog
- Show all categories
- Market Update
- Real in the Community
- Commercial
- Buying
- Selling
- Finance
- News
Mar 22, 2023
Market Update Q1 2023
Kerikeri prices continue to fall, inventory levels are rising, sales volumes are at record lows but serious buyers are starting to return as they sell in other areas. Kerikeri Market Update Following the trends of other markets around New Zealand, sales volumes are low and median prices are now dropping in Kerikeri after showing resilience through the first 3 quarters of 2022. The number of properties for sale is rising and there is over a year’s worth of inventory at current sales levels. The affects of cheap money being pumped into the economy during the pandemic pushing property prices up, creating a price bubble, are now being corrected across New Zealand. Weather events impeding travel are partly to blame for lower sales volumes but we are seeing buyers who have sold in other places in position to make cash offers. Most economists are predicting property prices to stabilize in 2023 as interest rates flatten out, net migration turns from “brain drain” to “brain gain”, and buyers take advantage of the wider choice of properties for sale and lower prices. What’s happening with house prices? The quarterly median price for a house in Kerikeri for sales completed during the 3 month period of November, December and January was $885,000. That is up 1.1% from the same period 1 year ago and up 22.9% from 3 years ago. It is down 15% from the peak period reached in 3rd quarter 2022 and thus it appears that most price gains made in 2022 are now being reversed. (I should caution that low volumes of sales make inferences on median price comparisons less reliable, particularly on a “month to month” basis which is the reason I use quarter to quarter comparisons. However even a change in the mix of properties sold within one quarter to another can make comparisons difficult. Unfortunately, REINZ does not provide a house price index comparison, which adjusts for these variations, below the regional level, so we have to use the raw data we have to try to draw comparisons.) By comparison Auckland and Wellington regions are down 20.3% and 19.3 % respectively from their peak values reached in 4th quarter 2021 (9 months prior to Kerikeri’s peak) and have effectively wiped out any median price gains since January 2021. At this point in time, the regions outside the major centres have not seen the size of price corrections that Auckland and Wellington have but nor did they experience the size of price increases during the Covid-19 driven bubble. The next 12 months will illuminate whether our prices continue to decline as a lagging trend behind the major centres or whether we hit bottom sooner. What are the market drivers? The effects of higher and rising interest rates, slower sales in Auckland and Wellington affecting the ability of city buyers to move to the Far North and general uncertainty on market conditions and the economy, have caused a dramatic slowdown in enquiries and sales. This has led to increased inventory of properties for sale across Kerikeri and the district. The positive news is that there is still a steady stream of people wishing to move north for lifestyle change driven by reflection of what is important to them during the Covid-19 lockdowns. As soon as they sell, they are looking to travel up and find their new home so they can retire or work where they want to live. Auckland sales volumes are down 39% and prices down 20% in 2022 while our local prices continued to rise into 3rd quarter 2022 making the move north less affordable. In fact, in 3rd quarter 2022, Kerikeri’s median price was the closest to Auckland regions price it has ever been. For people moving from some suburbs in west and south Auckland Kerikeri’s entry level price made moving here impossible without using equity or increasing debt. A correction is now underway. The closing of roads and challenges with air travel around the country have made it difficult for buyers to get here. There is no doubt that more Auckland and Wellington buyers would have taken action had they been able to come up and inspect their prospective new homes. Residential investors are sitting on the fence in the current uncertain market having been dealt numerous negative regulatory blows and more challenging financial scenarios. Most seem to be holding onto their investments for now. How are the number of sales tracking? Kerikeri and surrounds had 41 unconditional residential, lifestyle home and bare land sales in November, December and January compared with 79 sales in the same period last year. A 48% percent decrease. Bare land sales are significantly down from 18 over the November, December and January period last year to only 3 this year. At the 2022 rate of sales there are several years of bare land inventory available for sale and 6 years of inventory at the pace of sales of the last 6 months. Uncertainty about building costs, and supply chain issues have made building a less desirable option for many. It will be interesting to see how the number of new house starts and new building consents is affected by this slowdown over the course of the next year. The good news for our construction sector is that there are commercial projects, retirement village expansions and planned government housing projects for Kerikeri that should help to maintain business activity. What about bare land sales prices? The low sales volumes over the last year introduced a lot of statistical variance when making comparisons and reduced the relevance of these figures. There are indications from the few sales that have occurred that prices are softening but have not taking a significant correction as they did in 2008 after the Global Financial Crisis. How long is it taking to sell? Days to sell have risen from an average of 30 days for sales in November, December and January 2021/2022 to 61 days in the same period of 2022/2023. This is starting to be towards the high end of the 10 year average of 55 to 60 days for our area and likely to increase further as inventory is building. How are inventory levels tracking? Inventory levels are up to 280 unique listings for sale on Trade Me in January. This is a rise from 231 a couple of months prior and up from around 150 a year ago. This level of choice on the market has not been seen since November 2020. 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 post Xmas rush of activity begins. With new listings outpacing sales inventories continue to increase. What is the outlook for the Kerikeri market? Interest rate increases over recent months and LVR restrictions have unnerved buyers. FOOP, or the Fear Of Over Paying has replaced FOMO, Fear of Missing Out. More interest rate rises are expected but most predict levelling off in the next 6 months. First home buyers, who have not traditionally been a high percentage of the market in Kerikeri, are few and far between. Based on reasonable numbers of enquiry levels from “out of town” buyers we are expecting the slow and steady migration to the Far North to continue much as it has over the past 10 years. Basically, a return to more normal times with people taking their time to look around, do their homework and make informed buying decisions. Assuming these trends continue, then we can expect our local market to remain slower than the last few years and for some vendors to reduce their prices and take offers they would not have last year. The good news is that most are still achieving a significant increase in prices from 3 years ago and most economists agree that buyers have a limited window to buy at current levels before prices start to increase again. This should encourage more action over coming months and start to settle the downward trend in median prices. We can’t predict the highs and lows of the market but what we know for certain is that the tide will always change again. There is an old saying: “Sell when everyone is buying and buy when everyone is selling”. This is the time to buy as the gap between new home prices and existing home prices continues to widen. Sooner or later we will have another upward correction. Pop in for a coffee and a catch up with any one of us if you are thinking of buying or selling.
Feb 22, 2023
Kerikeri prices continue to fall, inventory levels are rising, sales volumes are at record lows but serious buyers are starting to return as they sell in other areas.
Following the trends of other markets around New Zealand, sales volumes are low and median prices are now dropping in Kerikeri after showing resilience through the first 3 quarters of 2022. The number of properties for sale is rising and there is over a year’s worth of inventory at current sales levels. The affects of cheap money being pumped into the economy during the pandemic pushing property prices up, creating a price bubble, are now being corrected across New Zealand Weather events impeding travel are partly to blame for lower sales volumes but we are seeing buyers who have sold in other places in position to make cash offers. Most economists are predicting property prices to stabilize in 2023 as interest rates flatten out, net migration turns from “brain drain” to “brain gain”, and buyers take advantage of the wider choice of properties for sale and lower prices. What’s happening with house prices? The quarterly median price for a house in Kerikeri for sales completed during the 3 month period of November, December and January was $885,000. That is up 1.1% from the same period 1 year ago and up 22.9% from 3 years ago. It is down 15% from the peak period reached in 3rd quarter 2022 and thus it appears that most price gains made in 2022 are now being reversed. (I should caution that low volumes of sales make inferences on median price comparisons less reliable, particularly on a “month to month” basis which is the reason I use quarter to quarter comparisons. However even a change in the mix of properties sold within one quarter to another can make comparisons difficult. Unfortunately, REINZ does not provide a house price index comparison, which adjusts for these variations, below the regional level, so we have to use the raw data we have to try to draw comparisons.) By comparison Auckland and Wellington regions are down 20.3% and 19.3 % respectively from their peak values reached in 4th quarter 2021 (9 months prior to Kerikeri’s peak) and have effectively wiped out any median price gains since January 2021. At this point in time, the regions outside the major centres have not seen the size of price corrections that Auckland and Wellington have but nor did they experience the size of price increases during the Covid-19 driven bubble. The next 12 months will illuminate whether our prices continue to decline as a lagging trend behind the major centres or whether we hit bottom sooner. What are the market drivers? The effects of higher and rising interest rates, slower sales in Auckland and Wellington affecting the ability of city buyers to move to the Far North and general uncertainty on market conditions and the economy, have caused a dramatic slowdown in enquiries and sales. This has led to increased inventory of properties for sale across Kerikeri and the district. The positive news is that there is still a steady stream of people wishing to move north for lifestyle change driven by reflection of what is important to them during the Covid-19 lockdowns. As soon as they sell, they are looking to travel up and find their new home so they can retire or work where they want to live. Auckland sales volumes are down 39% and prices down 20% in 2022 while our local prices continued to rise into 3rd quarter 2022 making the move north less affordable. In fact, in 3rd quarter 2022, Kerikeri’s median price was the closest to Auckland regions price it has ever been. For people moving from some suburbs in west and south Auckland Kerikeri’s entry level price made moving here impossible without using equity or increasing debt. A correction is now underway. The closing of roads and challenges with air travel around the country have made it difficult for buyers to get here. There is no doubt that more Auckland and Wellington buyers would have taken action had they been able to come up and inspect their prospective new homes. Residential investors are sitting on the fence in the current uncertain market having been dealt numerous negative regulatory blows and more challenging financial scenarios. Most seem to be holding onto their investments for now. How are the number of sales tracking? Kerikeri and surrounds had 41 unconditional residential, lifestyle home and bare land sales in November, December and January compared with 79 sales in the same period last year. A 48% percent decrease. Bare land sales are significantly down from 18 over the November, December and January period last year to only 3 this year. At the 2022 rate of sales there are several years of bare land inventory available for sale and 6 years of inventory at the pace of sales of the last 6 months. Uncertainty about building costs, and supply chain issues have made building a less desirable option for many. It will be interesting to see how the number of new house starts and new building consents is affected by this slowdown over the course of the next year. The good news for our construction sector is that there are commercial projects, retirement village expansions and planned government housing projects for Kerikeri that should help to maintain business activity. What about bare land sales prices? The low sales volumes over the last year introduced a lot of statistical variance when making comparisons and reduced the relevance of these figures. There are indications from the few sales that have occurred that prices are softening but have not taking a significant correction as they did in 2008 after the Global Financial Crisis. How long is it taking to sell? Days to sell have risen from an average of 30 days for sales in November, December and January 2021/2022 to 61 days in the same period of 2022/2023. This is starting to be towards the high end of the 10 year average of 55 to 60 days for our area and likely to increase further as inventory is building. How are inventory levels tracking? Inventory levels are up to 280 unique listings for sale on Trade Me in January. This is a rise from 231 a couple of months prior and up from around 150 a year ago. This level of choice on the market has not been seen since November 2020. 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 post Xmas rush of activity begins. With new listings outpacing sales inventories continue to increase. What is the outlook for the Kerikeri market? Interest rate increases over recent months and LVR restrictions have unnerved buyers. FOOP, or the Fear Of Over Paying has replaced FOMO, Fear of Missing Out. More interest rate rises are expected but most predict levelling off in the next 6 months. First home buyers, who have not traditionally been a high percentage of the market in Kerikeri, are few and far between. Based on reasonable numbers of enquiry levels from “out of town” buyers we are expecting the slow and steady migration to the Far North to continue much as it has over the past 10 years. Basically, a return to more normal times with people taking their time to look around, do their homework and make informed buying decisions. Assuming these trends continue, then we can expect our local market to remain slower than the last few years and for some vendors to reduce their prices and take offers they would not have last year. The good news is that most are still achieving a significant increase in prices from 3 years ago and most economists agree that buyers have a limited window to buy at current levels before prices start to increase again. This should encourage more action over coming months and start to settle the downward trend in median prices. We can’t predict the highs and lows of the market but what we know for certain is that the tide will always change again. There is an old saying: “Sell when everyone is buying and buy when everyone is selling”. This is the time to buy as the gap between new home prices and existing home prices continues to widen. Sooner or later we will have another upward correction. Pop in for a coffee and a catch up with any one of us if you are thinking of buying or selling.
Nov 25, 2022
Is now a good time to buy or sell? Market Update (Through October 2022)
October market update REINZ statistics are out for October 2022, so our in-house analyst has been busy producing the latest market data for your perusal. We are moving into the November sales period and it is coming into the time of year when the weather is warming up and the birds are singing their hearts out in the mornings. It is also the time of year when our outdoor festivals are held. The Kerikeri Street party was well attended this year and the town showed off our local foods, wines, and community spirit. As December approaches, we look forward to the community events organized to celebrate Xmas, not least of which is the 8 metre Xmas tree that will be displayed in the Domain from the 3rd of December. Our visitor numbers will swell and we trust that some will choose to make Kerikeri their home now or sometime in the future. Good time to sell or buy? This is a question we are often asked and it is an important question. There is no doubt that our market is changing and we are finally following the national trend. It is taking longer to sell and median house prices have dropped. Every market represents its own opportunities, inflationary pressures are driving new build prices up, increasing stock levels and higher interest rates are creating a price correction for existing stock. This combination creates opportunities to purchase the property you have been waiting for. There is less competition in the market, you have more choice and ultimately values will correct again when demand exceeds supply over the coming years. But what about if you are selling and must buy again? The beauty about selling and buying in the same market, is that, although you may accept a lower price for your own home, the property you purchase will also be obtainable at a lower price. The market becoming almost irrelevant. The average number of days to sell a property in Kerikeri has been around 60 days over the past 10 years. We are now experiencing this again; listings are increasing but still at the lower end of what we are used to. While the media are predicting doom and gloom, we merely see the market returning to “Normal”. The reality is that the median house prices are still up 48% from three years ago, inquiry is still good, sales are being made every day, good attendance to our open homes and we are meeting lots of people who would love to live in our beautiful town and experience the laid back lifestyle Northland has to offer. First Home Buyers! This is a great time for first home buyers, if you have good job security, saved a decent amount for a deposit, are not afraid to get your hands dirty and add some value. You can wait for your equity to grow, or you can work hard and create your own equity. We have seen young couples doing homes up and with a minimal capital amount but with a massive personal effort turning a rock into a diamond. The greatest mistake you can make is to try and start where your parents left off. There is an old saying “The harder I work, the luckier I get”. (P.S be nice to your parents they might help you out!) 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. Please Note: *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.
Oct 19, 2022
Spring - September 2022
September Market Update: The fourth quarter of 2022 is now here. Where did the year go? Our team is in full swing with the usual rush of Spring listings albeit wet weather which has put a bit of a damper on photos and launches. This is an active time of year with a series of events leading into Xmas including the reopening of Kainui Road’s Saturday concerts in the vineyard; the half marathon and Kerikeri Street party; and various Xmas events organized by Our Kerikeri. Some serious roadworks are happening in late October through November around the Packhouse markets west of Maraenui Drive. This will mean no exit from town to the State Highway on Kerikeri Road. The suggested route is to head out on Waipapa Rd to get to the State Highway and now for news on the Kerikeri property market. How is the Greater Kerikeri Market? The same story continues for a further month with median house prices still remaining strong in Kerikeri despite further drops in other parts of Northland and most parts of the rest of the country. The question is will this continue or is this a lag on trends in other markets around the country. The truth is we still don’t really know. The number of homes for sale, or inventory, has increased only slightly in the past few months. This suggests properties are turning over at a rate not dissimilar to the rate they are coming onto the market. However, we typically get a Spring rush of new listings over the next few months which could create more competition between vendors. We have been encouraging our clients to “beat the rush” if they have plans to move. The Sales Data: The median house sales price (on a quarterly moving average basis**) increased 13.5% from September 2021 compared with a drop of 7.6% for the same period in the Auckland region and a drop of 1.2% for all New Zealand. Kerikeri median prices are level with last month at a record level of $1,050,000 versus a 15.5% drop in the Auckland region and a drop of 10.4% for all New Zealand. Kerikeri median prices are the closest to Auckland median prices in many years and are up 50% from 3 years prior. The median days to sell is at around 50 days which is slightly better than our average level for the last 10 years. The volume of bare land sales is still much lower than prior years. Only one section sold in September, being a 3045m2 riverfront lot for $650,000. There were 14 less sales recorded in September 2022 than in August 2021. 3 sales were between $1.5million and $2 million. This brought the volume of total property sold this year through September 31st to 30% down from the same period in 2021. This is slightly worse than the 29% lower comparison of year-on-year sales levels last month. Enquiry Levels: This month saw enquiry levels and viewings at open homes drop a little, possibly with bad weather and holidays taking attention away from buying and selling homes. Buyers tend to be waiting until their homes are selling before making their moves. Our typical feeder markets, Wellington, and Auckland, continue to show even lower median prices and lower sales volume. Our office recorded another 5 sales in September and had 28% of the total residential sales recorded in Greater Kerikeri. Through collaboration, sharing workloads and helping each other, we maintained our share of the residential sales recorded in Kerikeri this year to 35%. This continues our unbeaten record of producing the highest number of residential sales in Kerikeri, year in and year out, 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. Please Note: *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, Takau 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. [siteloft_form id=11 add-background="false"]
Sep 28, 2022
Kerikeri is still an attractive destination for buyers.
Living in a smaller community has many benefits. Simple behaviours like a smile from a passer-by, saying G’day in the street and supporting one another in times of trouble. Over the past few months, several members of our team have been working to organize “The REAL House Tour”, a charity event to benefit Hospice Mid Northland. Part of this work involved soliciting others to offer their assistance, some as volunteers; some agreeing to open their homes for the tour; others providing items for auction and raffles; and many others providing goods and services for the event itself. Virtually everyone approached agreed without hesitation. The generosity of the businesses and people of Kerikeri was astounding. This is the type of place we live in. The place we are proud to call home. On the day over $30,000 was raised, funds that Hospice really need to continue their valuable free service to our communities in the Far North. (Government fund less than 43% of monies required.) At REAL, we are all very honoured to be aligned with Hospice. We hear so many stories from the community of their passionate commitment to caring and providing dignity to those who are in their final days of life and support for their families. Our team has contributed over $150,000 from their incomes since we started our support at the beginning of 2021. We encourage other people and businesses to help wherever they can. A life without Hospice’s services would be unimaginable and their caring is something many of us will most likely need at some point in the future. Now what else has been happening in our local property market and is it still behaving differently than other major centres as reported last month? The short answer is “yes, it is”. So here are the facts. Median house prices are still holding up despite further drops in other parts of Northland and most parts of the rest of the country. The question is will this continue or is this a lag on trends in other markets around the country. The truth is we still don’t really know. The number of homes for sale, or inventory, has increased only slightly in the past few months. This suggests properties are turning over at a rate not dissimilar to the rate they are coming onto the market. However, we typically get a Spring rush of new listings over the next few months which could create more competition between vendors. We have been encouraging our clients to “beat the rush” if they have plans to move. The median house sales price (on a quarterly moving average basis**) increased 12% from August 2021 compared with a drop of 4.2% for the same period in the Auckland region and a drop of 0.6% for all New Zealand. Kerikeri prices are just above their peak level versus a 12.4% drop in the Auckland region and a drop of 9.3% for all New Zealand. Kerikeri median prices are the closest to Auckland median prices in many years and are up 46% from 3 years prior. Other markets around the country that appear to be holding their prices are also smaller attractive towns like Arrowtown, Cambridge and Raglan. It is possible that our smaller number of sales is skewing these results due to a recent trend towards sales in higher price brackets so we will be watching this more closely over following months. The median days to sell is now up to 58 days which is around our average level for the last 10 years. Bare land: The volume of bare land sales is still much lower than prior years. There is some light on the horizon with news that the rate of rising construction costs may be slowing and that materials and consents are getting easier to come by. We have a historically low supply of sections, so we have not seen a great deal of discounting from developers to this point. There were 4 more sales recorded in August 2022 than in August 2021. 5 sales were between $1.5million and $2 million helping to ease the pressure on rising inventory in this bracket. This brought the volume of total property sold this year through August 31st to 29% down from the same period in 2021. This is better than the 33% lower comparison of year-on-year sales levels last month. We will need a few more months of data to see if this is a turning point or not. Buyers: This month saw both local buyers and buyers from other markets who have sold or have serious interest in their homes. Enquiry has been reasonably consistent, but buyers tend to be waiting until their homes are selling before making their moves. Interestingly, we have worked with a few people from around Puhoi and Warkworth and wonder if the pending completion of the motorway extension is pushing some of the current residents to look to live further out. Our typical feeder markets, Wellington, and Auckland, continue to show even lower median prices and lower sales volume. First time home buyers appear to be ramping up their purchases in other centres. How these various forces impact our market over the next year is unknown, but experience tells us there are always reasons people need to move and therefore buy and sell homes in any market. Our office recorded another 10 sales in July and had 37% of the total residential sales recorded in Greater Kerikeri for August. Through collaboration, sharing workloads and helping each other, we increased our share of the residential sales recorded in Kerikeri this year to 36%. This continues our unbeaten record of producing the highest number of residential sales in Kerikeri, year in and year out, 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. *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, Takau 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.
Aug 16, 2022
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. If you would like to have the latest and most locally focused information on the greater Kerikeri real estate market delivered to your inbox please subscribe to our mailing list below. [siteloft_button text="Subscribe to the Market Update" link="/offcanvas_form/?location=newsletter" target="_blank" ] [siteloft_button text="The REAL House Tour" link="https://www.hospicemn.org.nz/the-real-house-tour--24-september/" target="_blank" ] *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.
Jul 1, 2022
Winter 2022 - Market Cycles, Are we in a softening market?
It is times like this we must remember that there are always buyers and sellers for real estate no matter what stage of the cycle we are in. People move for employment changes, need to upsize or downsize, lifestyle change and many other reasons. Generally people are buying and selling in the “same” market. If you are in property for the longer term, history shows that values typically increase better than CPI (Consumer Price Index). Even with a correction as we are seeing around the country, most sellers are still achieving a good return on their investment. Here are a few key summary points for the Greater Kerikeri property market: The volume of sales through May 31st is down by 27% for the same period last year a further decline from 21% down last month. The median house sales price dropped in May driven by a mix of lower priced properties being sold during the period. The quarterly moving average median price indicates prices are starting to soften. How this unfolds will be more clear as we see more results in future months. Inventory levels have increased year on year but are fairly level compared with last month (190 listings this month compared with 188 last month). i.e. the sold and withdrawn listings are about equal to the number of new listings. Our feeder markets Wellington and Auckland continue to show lower median prices and lower sales volume. Uncertainty continues about the impact of interest rate hikes, inflation, tougher lending rules and the economic effects of the war in Ukraine. Now we also have the first real data showing negative net migration into New Zealand (touted by the media as the” brain drain”) and news that the global financial markets have declined into bear territory. The cost of building keeps increasing and are likely to increase even further when new building regulations are enacted in September. This cost is unlikely to drop and underpins the floor to which property prices are likely to drop to. There are still other positive tail-winds as Covid restrictions are lifted and more people from around the world are able to travel resulting in higher levels of enquiry from returning ex-pats and overseas buyers. Some first time home buyers also are getting some relief as banks implement more reasonable screening as part of their lending criteria. We have seen an increase in enquiry from investors and first time home buyers in recent weeks. Enquiry from local buyers has picked up also now they have more confidence they will have a place to move to and less competition from buyers moving from the cities. Vendor vs. Vendor... In May we witnessed the second month in a row where sales volumes were 30% to 40% below average. It is too early to see the effect on median prices as we need several months of results to notice a trend. Our experience of other cycles tells us that price declines usually follow volume declines within 3 to 6 months. Other evidence of a softening market is more properties selling below their asking price than last year, fewer multi-offers, fewer sales under the hammer at auctions and vendors, particularly in higher brackets, lowering asking prices to meet the market. The buyer versus buyer market of 2021 has transitioned to the vendor versus vendor market in 2022. Vendors therefore have to be “best in class” to attract offers away from other vendors. That means top level presentation, targeted marketing across all media platforms and sharp pricing. Interestingly sales of well-presented, low maintenance homes below $1,100,000 are still selling reasonably quickly and some are even achieving record level prices. In this bracket we have a steady stream of buyers and limited stock available. In price brackets above $1,100,000 higher stock levels are now providing more choice for buyers and most seem to be more cautious than last year and are taking their time in their searches. As a result, on average properties at this level are taking a bit longer to sell than last year. The value of experience. Our focus on family values, supporting each other, ethical behaviour and a cooperative, collaborative approach to selling real estate means our company experiences extraordinary low levels of staff turnover. As a result our people have many years of experience working in Kerikeri. Most of us have been through several industry cycles. Our newer members get daily hands on coaching from other team members so they are up to speed quickly too. As a result we have great depth and experience of how to produce the best results for our vendors in various stages of the market cycles. At this time, this experience is very important to you if you are selling your home. As we say, anybody can sell in a hot market, but the real value of experience comes to light when times are tougher. 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. ACHIEVING GREAT THINGS TOGETHER
May 17, 2022
The Greater Kerikeri Property Market
The media does a great job of commenting on the property market at the national and regional level. And the commentaries are coming fast and furious at the moment. At the national level, trends are highly influenced by what is happening in the major centres such as Auckland and Wellington due to the relatively high volume of transactions that occur there. We hope that our breakdown of what is happening on the ground in the Greater Kerikeri area is more useful to our customers, both current and future. Here are a few key summary points for the Greater Kerikeri property market: The volume of sales in Greater Kerikeri through April is down by 21% for the same period last year Median house prices starting to flatten on a quarterly moving average basis. We have yet to see the type of price decreases that the larger centres are seeing. Inventory levels have increased year on year but are fairly level compared with last month Our feeder markets Wellington and Auckland are experiencing lower median prices and lower sales volume, as much as 40% less in Auckland Uncertainty continues about the impact of interest rate hikes, inflation, tougher lending rules and the economic effects of the war in Ukraine There are some positive tail-winds as people are freer to travel now that Covid restrictions are lifted, more enquiry from returning ex-pats and overseas buyers on our shores, continued interest from city escapees and some relief from the prohibitive rules put in place on lenders in December 2021 that should allow more loans to be passed from June. While other parts of the country are reporting declining prices, Kerikeri is still holding its own. Kerikeri’s 3 month moving average median house sales price was at a similar level to last month at around $1,070,000 starting to signal that price rises are flattening out. There are a few warning signals as direct enquiry levels are down and fewer multiple offers are being negotiated. Kerikeri appears to be returning to a relatively normal state historically where most buyers visit, take their time looking and sell their homes to move here. We call it a “drip feed” market as opposed to a market where they are 4 or 5 buyers for every property for sale as soon as it comes on the market. It is critical that selling strategies need to adjust accordingly. Residential sales volumes are down 21% in the first 4 months of 2022 compared with the same period in 2021. 111 unconditional sales reported compared with 130 in the same period last year. Higher stock levels are now providing more choice for buyers and most seem to be more cautious than last year and taking their time in their searches. As a result, on average properties are taking a bit longer time to sell than last year but they are selling and prices appear to be holding for now. Professional advice becomes more important than ever... The days of pricing ahead of the market are gone for now. Our advice to vendors is to seek to fully understand the market they are looking to sell in and how much competition they are up against within their price band. If there is a lot of competition in your band then it is critical that your marketing accentuates the benefits and outstanding features of your property and the price will need be among the “most attractive in class” to sell in the shorter time frames. This is where our professional advice becomes more valuable than ever. Our team at REAL is the most stable team in Kerikeri, thanks to our family values and cooperative and collaborative approach to selling real estate. Most of us have been through several industry cycles and our newer members get daily hands on coaching from other team members so they are up to speed too. As a result we have great depth and experience of how to produce the best results for our vendors in various stages of the market cycles. At this time, this experience is more important to you if you are selling your home. As we say, anybody can sell in a hot market, but the real value of experience comes to light when times are tougher. 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.