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Mar 29, 2022
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.
Nov 22, 2021
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
Sep 27, 2021
Kerikeri prices continue rise, inventory levels at record lows - Market Update
What’s happening with house prices? The quarterly median price for a house in Kerikeri for sales completed during the 3 month period of June, July, August was $925,000. That is up a massive 37% from the same period 1 year ago and up 3.9% from last month. If you had purchased a home 20 years ago at the median price of $200,000 It could now be worth over 4.5 times that. It’s no wonder so many Kiwis invest in real estate as their primary investment choice. 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 from city dwellers that they are fed up with taking the brunt of lockdowns and are now actively looking to move so they can work where they want to live. Who wouldn’t want to be near the beach or 5 minutes from the boat-ramp, versus tackling the congestion of the city and potential further extended lockdowns. 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. The only slowdown has been the physical inspections by building inspectors and valuers at level 4. How are the number of sales tracking? Kerikeri and surrounds had 102 unconditional residential and lifestyle house and bare land sales in June, July and August compared with 132 sales in the same period last year. A 23% percent decrease driven by low inventory levels and existing agreements being extended out past the end of August due to Covid-19 lockdowns. Bare land sales are significantly down from 33 over the June, July, August 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 was $475,000 for June, July, August compared with $270,000 last year a huge increase of 76%. How long is it taking to sell? Days to sell have dropped from 79 for sales in August 2020 to 27 in August 2021. How are inventory levels tracking? Inventory levels are down to 125 listings for sale on Trade Me from over 200 a year ago and an average of over 400 over the last 10 years. The recent lockdowns have exaggerated this as some vendors have hit the pause button on coming to market. 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. However, with many buyers who have already sold and are ready to buy, enquiry is very high immediately after the advertising starts and they are often flying off the shelf quickly. So, despite an increase in new listings coming to the market, inventory levels are remaining very low. What is the outlook for the Kerikeri market? Indications from market economists are that interest rate increases and LVR restrictions will be implemented by the reserve bank in coming months to try to kerb this continued upward price pressure. Despite interest rates set to rise, they will still be historically low for a while yet and the rule changes will likely affect first home buyers more significantly. First home buyers have not traditionally been a high percentage of the market in Kerikeri due to our above average prices. The migration to the Far North appears to be continuing strongly. Assuming these trends continue then we can expect our local market to stay strong for the foreseeable future. Consequently, we are anticipating a busy Spring in the Far North as lockdowns lift around the country. There may never have been 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. Hospice update This year we have joined forces with Hospice and are donating $1000 from each sale to help Hospice assist others in our community. Our relationship with Hospice has blossomed and we are like two families coming together. We are delighted to announce we have raised over $64,000 this year so far. The fantastic nurses and Administration team at Hospice now have two new vehicles to help with their incredibly valuable work. Every one of our team members dig into their own pockets to help with this valuable cause. We have also pledged to continue our relationship with Hospice next year and beyond. Click here to discover more... Other news in the community You done have to look far to see there is plenty of development going on around the town. It is great to see so much activity that is so needed to bring the infrastructure to Kerikeri required to support our incredible growth. Domain works and skatepark Works have begun on the revitalization works to the Domain in central Kerikeri. This an exciting time for the community and particularly for the many youth who will be able to enjoy the upgraded basketball and skateboarding facilities when completed in early 2022. Taking advantage of the Provincial Fund grants, it will create a destination for families in the community to come together and enjoy the outdoors right in the centre of our town. Windsor Landing What an amazing facility has been built at the end of Inlet Road. Plenty of parking, all tide access. Boat, kayak or stand up paddle direct from public space on the shoreline. It has been a long time coming and locals are already taking advantage of this huge improvement to our access to our fabulous marine playground – The Bay of Islands. Click here to locate Windsor Landing. Waipapa Sports Fields The first stage of the new Sports Park in Waipapa are underway with the formation of the entrance and construction of other service connections to accommodate the ablution block and changing rooms. Watch this space as the first 5 new fields, parking areas and walking areas come together in the first stage. The longer term vision has the potential to accommodate a hockey field, baseball diamonds, cricket nets, clubrooms, a dog training area, cycle paths, croquet lawns, children’s play zone and a gymnastics facility in the later stages. Developments selling fast – Arvida, Quail Ridge and Inlet Estate Interest has been strong in the new Arvida retirement development and 16 houses have been completed very quickly with many more under construction. Quail Ridge at the end of Rainbow Falls Rd continues to expand changing the views from the golf course and town. Inlet Estate has only a handful of packages left. Large integrated development proposals for the Bing land off Kerikeri Road behind King St and for the Brownlie farm behind the golf course have been presented to the Council. These two developments alone have the potential to house 3 to 5 thousand people. It is becoming clear that right now is a major turning point for Kerikeri. The population of Kerikeri and its immediate surrounds have grown to nearly 20,000 now and we continue to see rapid growth far greater than most other areas of the country. Recently our town missed out on any central government funding from Waka Kotahi NZ Transport Agency to solve our traffic problems. With over 11,000 traffic movements daily on Kerikeri Road currently, nobody has an answer to how our community is going to cope with the future challenges of moving around our town in light of the current population explosion we are witnessing. One thing is for sure, traffic is going to get a lot worse before a solution is in place. Make sure you have your say on how our town progresses. Submit your views on Council plans including the upcoming Draft District Plan which will have affect on the next 10 to 20 years of Kerikeri’s development. Get a louder voice by participating or volunteering with community groups such as Our Kerikeri or Vision Kerikeri. Talk to your elected councillors and members of the Community Board about things that concern you. Positive change will not happen without our community having a voice.
Apr 30, 2021
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.
Oct 16, 2020
The Kerikeri market has gone nuts - Sales volumes are up at record levels
The news around the country is that sales volumes are up at record levels and prices are rising and it is no different here in Kerikeri. 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 listing stocks across the region. Covid-19 lockdowns showed people how they can successfully work from home and attend meetings on the internet using apps such as Zoom. The trend is for people to now look to work where they want to live, near the beach or 5 minutes from the boat-ramp, versus tackling the congestion of the city. This has created a phenomenon coined “Zoom towns” and Kerikeri appears to be top on the destination list. Investors are looking for better returns than their bank term deposits are providing and they see property as less risky than the equity markets. Growing families are buying properties to obtain that extra bedroom and able to refinance at record low rates so that their payments remain the same or less. Kerikeri and surrounds had 94 unconditional residential or lifestyle sales in August and September compared with 54 in the same period last year. A whopping 75 percent increase. The median price for a house in Kerikeri was $720,000. As more buyers seek property in the area and listing stock become scarcer, vendors are finding their homes are being snapped up at prices above their expectations. With interest rates set to stay low for a while yet and inward migration to New Zealand expected to surge when bubble borders are reopened, economic experts are predicting that the market will stay strong for the foreseeable future. Pop in for a coffee and a catch up with any one of us if you are thinking of buying or selling.
May 29, 2020
KERIKERI PROPERTY MARKET - WHAT'S HAPPENING?
So what is really happening in the Kerikeri property market? A common question we are hearing from clients and prospective buyers is what is happening in the Kerikeri property market after the lockdown was lifted. It is too early to predict any longer term trends but early indications are fairly positive with enquiry levels from prospective buyers getting stronger day by day. There are a lot of people hitting the websites and watch-listing properties but a smaller number taking the next step and making appointments on some properties. This suggests people are exercising caution as might be expected in a time of uncertainty. The first weekend after lifting to Level 2 saw a lot of people reconnecting with family. We had several cancellations from people who changed their plans to travel to Kerikeri. Last weekend was more buoyant and we have a lot of appointments scheduled for the long weekend. A large proportion of these buyers are from Auckland and other cities around New Zealand. We are also getting enquiry from expats who are or have been living overseas and who have made the decision to return to New Zealand. Just last week we had a couple who had finished quarantine and had moved back to New Zealand from Dallas, Texas as they were unhappy with the way Covid-19 has been handled there. Being able to operate their business remotely means that Kerikeri is an attractive option for them. We have also been talking with contacts in Auckland and it appears that the opportunity to have a taste for a slower pace during lockdown has some thinking of making this lifestyle more permanent. Having figured out that working remotely under lockdown away from the main office is not only possible, but beneficial and more productive, the attraction of provincial towns has never been higher. The lifestyle benefits of Kerikeri with a good choice of cafes and restaurants and recreational activities, easy access to the Bay of Islands for boating, great schools, fast internet, an airport and warm climate has our town in their sights. Some are researching a list of provincial towns to call their future home. Kerikeri’s median prices have become much higher than the national median and for some will likely be unaffordable until price differences moderate. In this competitive national environment it is even more critical that out of town buyers understand what makes this fast growing town different and why their investment is secure over the long term. Consequently an essential part of our job is promoting the benefits of Kerikeri so these people choose us over other competing towns. This requires a fair amount of rapport building to gain trust, empathetic listening and knowledge of Kerikeri’s benefits that will suit their requirements. Our team of experienced Kerikeri locals have spent their lives building the skills and knowledge required to respond. Enquiries and viewings have been across all price ranges with most in the residential house sector. Some properties have been attracting more viewings than others. 10 groups through our open home on a property in town over the weekend for example and now multiple offers coming in. We also have a resurgence of first home buyers looking to use their Kiwisaver savings to buy. Lower interest rates make servicing loans a little more affordable. Although lower rates and the elimination of Loan Value Ratios (LVRs) are positive for these buyers, lending criteria remains very tough and banks are looking at other factors than personal finance numbers such as future job security and potential future value reductions in their security. Residential investors are making enquiries as yields on other investment types drop and low interest rates reduce holding costs on property investment portfolios. [caption id="attachment_6707" align="aligncenter" width="1024"] Comparisons between Kerikeri Property Market, the Northland region and New Zealand.[/caption] The numbers of sales in Kerikeri was down significantly during lockdown, of course, dropping from an average of 30 sales per month in 1st Quarter 2020 to just 8 in April. We should have the May figures in a week or two but early indications are for similar results to April. It is too early to see if property values have been impacted although purchasers who have made offers or discussed price would like to think they have. Most vendors are saying no and holding on nearer to their asking price. This is familiar territory for us negotiating to close this gap through 2008-2009 after the GFC until everyone settled into the new reality. Remember if you buy and sell in the same market it becomes irrelevant. Historically drops in our median prices have occurred 6 to 12 months after a sustained reduction in number of sales. For now the median price is holding steady and a lot depends on whether the demand for what Kerikeri has to offer continues and whether our local economy continues to provide jobs. The good news on the latter is that we are less exposed than other towns who rely more on tourism. Primary industry and services that support the retiree sector appear to be holding strong, construction projects should continue as long as there are people moving north and retail and hospitality will hopefully revive with the movement to “support local”. Needless to say there is a fair amount of uncertainty out there, still a bit of fear holding some people back from listing or buying. On the positive side people have had time to reflect on their lives and we are seeing buyers, and Aucklanders in particular, making the trip to see if Kerikeri will provide them with the lifestyle changes they are searching for. Come see us for a chat now that you can again. Or give us a call if you are more comfortable with that. We are always more than happy to discuss what is really happening in the Kerikeri Property Market. (*Source REINZ)
Nov 17, 2019
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)
Aug 27, 2019
The Paradise Paradox
It’s hard to believe that we are more than halfway through 2019 already. We would describe the first half of the year as steady sales volumes, limited listing supply and prices holding. The Latest Data... Kerikeri property sales volumes were affected by the usual summer slowdown in enquiry which lasted a little longer into February this year. Perhaps it was the fine weather or fear of potential capital gains reform laws that caused the inaction - who knows. After a few boom years from 2015 to 2017 sales volumes have now stabilised to more sustainable levels. This is no surprise as the gap between median prices for property in Kerikeri versus Auckland and other areas has closed and some investors and retirees look to other areas of the country that are more affordable. In August the number of property listings in Kerikeri is at a 20 year low leaving buyers fewer choices and longer waits to find what they are looking for. (You can view all of our listings here.) Annualized median prices for residential homes have levelled off at $667,000 in January and stayed at this level for the first half of this year. In June the median price is up 2.6% on the median price for June 2018. This is well above the annualized median for New Zealand ($570,000) and Northland ($485,000) Whats driving this? We are still seeing a steady flow of new people moving from around New Zealand to the area driven by growth in the retirement, horticulture, tourism and construction sectors. Our studies of real estate sales and where buyers are coming from and sellers are going suggests our population in Kerikeri grew, by around 200 people in 2018. In the boom years of 2015 to 2017 we were recording around 500 to 600 net new people into the area. It is not difficult to see how this population explosion has put a strain on our infrastructure with increased traffic, lack of parking and the limited choice of fully serviced sections for sale over the last 3 years. As a result, with demand outweighing supply for houses and bare land in most price brackets, it should be no surprise that our prices have risen well above the national median. To make matters worse, our long awaited sewer infrastructure expansion has been delayed a further 7 months until mid 2020, meaning more customers having fewer choices and sometimes deciding to move elsewhere while people who have bought sections are having to delay their build plans and seek extensions to temporary accommodation and storage. This came as quite a surprise to many as up until recently all communication from council had predicted the sewer project to be on time for late this year. One has to wonder if this couldn’t have been communicated sooner. The Outlook. Our outlook is for moderate price growth over the next few years with low likelihood of significant price drops (as were witnessed after GFC) due to the short supply of land available for sale and steadily rising construction costs. We live in an awesome place that affords people who move here a warm climate, surroundings of outstanding natural beauty, a way of life they aspire to and an escape from the “rat race”. In turn we need to be prepared and planful in the way we grow to retain the very reason people desire to move here in the first place. This is the “paradise paradox”. Our Kerikeri - Let's Make It Our Town. There has been some great work over recent months by ‘Our Kerikeri’ to capture the views and opinions of our community, on whats important and how our town should look and feel in the future. Over 1400 people had their say and better planning was one of the 7 core goals identified. If you would like to find out more or how to participate, jump onto Our Kerikeri’s website at www.kerikeriourtown.co.nz. We live in an awesome place that affords people who move here a warm climate, surroundings of outstanding natural beauty, a way of life they aspire to and an escape from the “rat race”. Statistics Sourced from www.reinz.co.nz