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Mar 20, 2016
Bright Line Test
The property market in Kerikeri continues to show a trend of increasing sales activity and rising prices. Our graph below shows a rising trend line and also exhibits a bubble around the 3rd to 4th quarters of last year. Our deduction is that this short-term heightened activity in Kerikeri was a result of central government regulations including the ‘Bright Line’ test that became effective October 1st 2015. The test requires income tax to be paid on the sale of residential property that is bought and sold within two years, with the exception of the main family home. Further to this, all non-residents and New Zealanders buying and selling any property, other than their main home, must provide a New Zealand IRD number as part of usual land transfer process within Land Information New Zealand. Analysts are suggesting that these changes caused some buyers to accelerate their plans to buy or sell property prior to the changes coming into effect. This bubble appears to be a one off event and our expectation is a more gradual steady rise in activity and prices over the next two years.
Mar 15, 2016
Investors
Our team are talking to more and more investors looking for property in Kerikeri. The attractiveness of term deposits appears to be diminishing with interest rates a little more than 3% before tax. The share market has its supporters but this vehicle for investing comes with an element of risk not everyone wants to take. The investors we are talking to are turning to real estate in the hope of achieving better returns on their investment. Many feel that the higher risk and higher costs of liquidating real estate assets will pay off in the current market. Of course, there are factors to consider before jumping in head first: Don’t let over-enthusiasm cloud logical thinking. The real estate market is cyclical, it has its highs and lows. Investors should not expect overnight returns but view real estate as a long term investment strategy. Taking advantage of current low interest rates, and increased rental income can enable owners to cover a large portion of holding costs so that the property investment is virtually positively geared. Adopt a buy-and-hold strategy and do not over commit. Allow for contingency plans should interest rates and/or other holding costs rise. Consider your position if your family income is reduced through redundancy or ill health or if other expenses need to accounted for, such as the arrival of a new family member. Seek advice from your real estate agent, solicitor and bank/mortgage borrower. Double-check any advice you are given through your own research and due diligence. Don’t cloud your vision by looking for a property that you would want to live in. Emotion has no part in investment. Look through the eyes of a long term tenant when buying. Watch the market carefully and establish your own views on what represents good value and what doesn’t. Location is The Key. Being handy to services such as schools, transport and convenience shops are important. Low maintenance properties can reduce your ongoing costs. If buying your first home or an investment property during 2016 is on your wish list, don’t be put off, work hard to achieve that goal. The rewards can be immense. It’s never too early and it’s never too late!
Mar 1, 2016
Rent or Buy?
Property prices in Kerikeri have been going up and so have rents. Northland rental increases are on a par with Auckland, according to an article in the 17th February edition of The Northern Advocate and “the biggest rental rise across the district was in Kerikeri, up 17% to an average of $363.” There is a short supply of good rentals in town but that is not the only contributing factor. Increases in rates, insurance, and ongoing maintenance costs to the owners of rental properties are forcing landlords to increase rents. With interest rates at an all-time low and the help of Kiwi Saver, purchasing a first time home has become affordable for many! With the right advice from the bank and your accountant you could be a lot closer than you think. Here is some advice for you to consider: Be realistic, you can’t start where your parents finished. Get started by researching what is available on the market. Be smart with your money and reduce costs where possible so you can have more money left in savings at the end of the month. Look for property where you can add value. When you increase the value (often just by hard work) you increase your equity. Over time your mortgage will become less significant than the market value of your home. Just ask your parents what they paid for their first home. Whatever you face right now you can overcome one step at a time. It has never been “easy” to purchase a first home for anyone. Take the first step and come and talk to the Real Team.
Feb 20, 2016
Auckland Housing Market Overtaken as NZ'S Growth Engine: REINZ
Other regions now ''setting the pace'' for housing market, REINZ says. Other parts of the country have overtaken Auckland as growth engines of the housing market, the latest real estate industry figures show. New record median prices were set in Waikato/Bay of Plenty, Hawke's Bay, Wellington, Nelson/Marlborough and Otago as the market strengthened in December, according to the Real Estate Institute of New Zealand (REINZ). As usual, house sales dipped ahead of Christmas, falling 9 per cent on the previous month, although it was up 3.5 per cent a year earlier. Prices did not pause for breath, however, with the national median house price climbing to $465,000, up 1.2 per cent on the previous month and.3.3 per cent on the previous year. Excluding Auckland, house prices hit a record $379,000, up 8 per cent on a year ago. Pricey houses were particularly in demand, with sales in the $1 million-plus category rising 20 per cent over the year. Real Estate Institute chief executive Colleen Milne said sales outside Auckland were clearly picking up, rising 17.5 per cent on the previous December, and the spill over effect from Auckland did not explain it all. "Regional markets, particularly Northland, Waikato/Bay of Plenty, Hawkes Bay and Central Otago Lakes are now setting the pace for the New Zealand real estate market, with Auckland, in a relative sense, now in the middle of the pack," Milne said. She thought the decline in sales in Auckland would be "transitory" as investors got to grips with the new rules, but other regions had stolen the show with "noticeable" price increase, big drops in inventory and days to sell. "This breadth of the improvement across New Zealand suggests that there is more is at play than just an Auckland 'halo effect', although that has contributed in the northern regions." Kim Mundy, an economist with ASB, said the housing market was certainly healthy, particularly given the fall in days to sell. But she also did not count the Auckland market out. On a seasonally adjusted basis, Auckland sales had picked up. It was "too soon to say" whether the pick-up would be sustained, however. Northland was the strongest real estate market in the country, with sales were up 39 per cent and prices up 20 per cent on a year ago. Agents reported a surge in demand for coastal properties, and houses on the market had dropped "significantly," Milne said. Waikato/Bay of Plenty was the next busiest region in December, with sales up 30 per cent on a year ago and prices up 11 per cent. Gisborne, Rotorua and Taupo were all particularly active, and there were signs that first-home buyers were now striking competition, according to REINZ regional director, Philip Searle. "Aucklanders continue to feature strongly across the region, particularly in Hamilton and Tauranga," he said. In Hawkes Bay prices were up 13.3 per cent, hitting a new median high, and sales were up 26.3 per cent, as demand rose across the price range. Both the Taranaki and Manawatu markets saw large lifts in sales, but prices were more moderate, up 1.1 and 4.3 per cent respectively. In Wellington, sales rose 18.4 per cent, a welcome sign that the Capital's flat market was coming back to life. Prices were up 5.1 per cent, hitting a new high of $436,000. REINZ's Wellington director Euon Murrell said that although sales dipped in December, the market was still strong and there was "plenty of activity from all buyer groups". After a strong few years, Canterbury/Westland prices were up a respectable 5.3 per cent for the year but prices were flat, as first-time buyers held out for a better deal in the New Year. But further south, the housing market was chugging along nicely. Central Otago Lakes had the highest annual increase in the country, with prices up 20.4 per cent, while Southland's prices rose 13.9 per cent and Otago's rose 11.7 per cent. Sales in all three regions were strong, particularly with first-time buyers in Otago, and a shortage of listings in Central Otago. Most of the sales growth in Central Otago was coming from other parts of the region not Queenstown, Milne added.
Jan 20, 2016
2015 Market Recap
2016 has started where we left off in 2015. Homes at the right price and well presented are selling within weeks and, in some cases, within days. We now have interest in all price ranges and, more significantly interest over $500,000. Land sales are definitely up with more people deciding to build rather than purchasing existing homes. Inquiry is consistent from Auckland and Christchurch, mainly from people wanting to retire in Kerikeri. Comments from visitors over the Christmas holiday has been more than positive. Especially feedback also on the Saturday and Sunday market and how friendly the people of Kerikeri are and, of course, how exceptional our fishing and diving is in the beautiful Bay of Islands. There were 299 Residential homes sold in Kerikeri in 2015, up from 200 in 2014 –almost a 50% increase. This increased sales activity pushed median house prices up from $445,000 in 2014, to $490,000 in 2015 – a 10% increase and a 29% increase from the low of 2012. Northland’s overall median price is $337,000, and REINZ reported on 21st January 2016 “Northland was the strongest real estate market in the country, with sales up 39 per cent and prices up 20 per cent on a year ago”. Bare land sales rose significantly in the last 6 months of 2015, particularly for lifestyle blocks making a comeback. Residential section median prices rose from$145,000 in 2014 to $163,500 in 2015, a rise of 13%. (* All statistics sourced from REINZ) Our outlook for 2016 remains positive, driven by the following fundamentals: low interest rates; strong net migration into NZ; strong Northward migration of New Zealanders, particularly Aucklanders cashing up; government incentives for migrants to work in provincial areas; incentives for investors to buy outside of Auckland and... we have a great place to live!!! Where else can you find: A great choice of schools all with outstanding academic achievement records A fantastic performing arts centre that attracts a wide array of shows and popular artists Access to the Bay of Islands for its fishing, sailing, diving and beaches A temperate climate and volcanic soil which is the reason for the abundance of citrus fruits, orchards and exceptional home gardens 5 Top golf courses within 1 hours drive Beautiful nature walks including Rainbow Falls and Puketi forest History! Kerikeri basin with the Stone Store and Kemp House, 2 of New Zealand’s oldest buildings 4 Flights a day to Auckland Wine trail with award winning wineries Fresh food! Weekend markets with locally grown delicious produce and lots of choice. Some of New Zealand’s top rated restaurants and café’s A great community that really does care Feel free to come in and chat about the market or where the snapper are caught in the Bay. Jody serves a great coffee! The Real team can so easily be your team. If you are thinking of selling your home or are just curious about the value of your home please give us a call and one of the Real team would be happy to give you a free market appraisal. Best wishes to buyers and sellers and the folk of Kerikeri for 2016.