A U G U S T
M A R K E T
2 0 1 9
P U L S E
C21
PUBLISHER Century 21 New Zealand Ltd
CONTRIBUTORS Derryn Mayne Bindi Norwell SCOOP Business Kathryn Madden
EDITORIAL ENQUIRIES Century 21 New Zealand +64 9414 6041
ADVERTISING ENQUIRIES Century 21 New Zealand +64 9414 6041
WELCOME TO THE
AUGUST 2019 ISSUE OF
C21 MARKET PULSE
DISCLAIMER We have in preparing this information used our best endeavours to ensure that the information contained therein is true and accurate, but accept no responsibility and disclaim all liability in respect of any errors, inaccuracies or misstatements contained herein. Prospective buyers and sellers should make their own enquiries to verify the information contained herein. All information contained in the CENTURY 21 New Zealand Ltd website is provided as a convenience to clients. All links to property prices displayed on the website are current at the time of issue, but may change at any time and are subject to availability. For more information on our Privacy Policy please refer to: www.century21.com.au/privacy
C O N T E N T S A U G U S T
C21 NEW ZEALAND NEWS
02-03
2 0 1 9
PROPERTY MARKET UPDATE
Let’s make more of KiwiSaver for home-ownership.
Highest number of properties sold in month of
CEO, Century 21 New Zealand, Derryn Mayne
July for 3 years.
08-09
REINZ CEO, Bindi Norwell
FEATURED LISTING
04-05 TIME TO BUY
Ultimate lifestyle property comes with $250,000 Maserati.
Time for renters to get on a mortgage calculator.
Century 21 New Zealand
Scoop Business
AVOID FIRST-TIME WOES
06-07
Five common first-homebuyer mistakes – and how to avoid them. Home Beautiful Magazine Editor, Kathryn Madden
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C21 NEW ZEAL AND NEWS
LET’S MAKE MORE OF KIWISAVER FOR HOMEOWNERSHIP
B Y D E R R Y N M AY N E , C E O, C E N T U R Y 2 1 N E W Z E A L A N D
Across New Zealand, real estate listings and sales in the second quarter were generally slow, but then July saw an unexpected lift.
challenges are by no means over
Although population growth had
- one being that New Zealand’s
slowed from its peak in early
much-talked about housing
2017, New Zealand is still feeling
shortage still remains to be
the effects of the past surge and
resolved.
continued gains, according to the economists.
According to two economists the
Nonetheless we’re
country is short The Real Estate Institute of New
of 130,000
Zealand (REINZ) has revealed that
homes,
house sales across New Zealand
up from
in July were up 3.7% on the same
100,000
month last year - the highest
last year,
number of sales for July in three
and they
years. At the same time, Auckland
believe
experienced a 6.6% lift in sales
the
volumes year-on-year.
shortage
The REINZ chief executive noted that it was the first time in eight
could get worse.
seeing some
“...Century 21 New Zealand and REINZ have been leading the charge lately, proffering some constructive ideas that would see more firsthome buyers get on the property ladder.”
encouraging growth in consenting which can only mean more stock coming to market in the next few years.
months that we’ve seen the number
Despite a surge
of properties sold around the
in construction
country increase on an annual basis,
activity and residential
suggesting that we’re starting to see
building consents hitting multi-
13,881 new homes in the year to
some early signs of growth.
decade highs, it has still not been
May, up 13% from the previous year.
enough to keep pace with demand.
While nationally, in the year ended
New Zealand’s population growth
May, the number of new dwellings
continues to outstrip housing
consented was 34,672, up 6.3% –
supply.
the highest since 1974!
It’s great to see that this winter has not dampened the spirits of home buyers. However, ongoing
C21 MARKET PULSE
StatsNZ said
02
Auckland consented
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With the Government continuing to wrestle with a housing shortage, affordability issues, and its KiwiBuild programme, Century 21 New Zealand and REINZ have been leading the charge lately, proffering some constructive ideas that would see more first-home buyers get on the property ladder.
and KiwiSaver HomeStart grants.
One area of potential improvement
However, as part of its KiwiBuild
that has interested me is
‘reset’ and housing rethink, it’s
HomeStart. The scheme enables
now time to have another look
people who withdraw their
at these schemes to make them
KiwiSaver savings for a first-home
more successful.
deposit to receive a subsidy if they
private and public sector initiatives,
The Reserve Bank doesn’t look like
we should be empowering and
it’s going to change its loan-to-
enabling more renters with a
Currently, KiwiSaver HomeStart
value ratio (LVR) policy in a hurry,
KiwiSaver accounts to get into
provides eligible first-home buyers
meaning most first-home buyers
homeownership – a factor which
with a grant of up to $5,000
still have to stump up the required
has historically proven to be a huge
maximum for individuals or
20% deposit. Even for so-called
advantage come retirement.
$10,000 for couples to put towards
affordable homes in many of our
the purchase of an existing home.
main centres now, that remains a
The grant is doubled if it’s for a
big barrier to entry.
meet house price and income caps.
new home.
Like REINZ, I also believe the HomeStart price caps need to also be reviewed ongoingly, particularly
The cruel thing for prospective
given the solid rise in house prices
It’s over 12 years since KiwiSaver
first-home buyers is that the
across much of provincial
came into effect. Many Kiwis have
Official Cash Rate is at a record
New Zealand in recent years.
been contributing to the scheme
low level as are bank interest rates,
for a long time, and so I believe
making serving a mortgage in many
the HomeStart grant now needs to
cases cheaper than renting.
recognise and reflect that reality.
This winter Reserve Bank data showed that first-home buyers are an increasing part of the housing
We know that rents in the likes of
market. There was $926 million
Instead of a capping the grant at
Wellington are growing twice as fast
in lending to first-home buyers in
$1,000 every year for just their
as wages, and that rents in less-
June this year, up from $713 million
first five years of contribution, why
affluent districts like Kaipara have
two years ago. Let’s now keep
not extend that out to 10 years?
gone up 45% in the past five years.
driving this momentum.
That would effectively double the
What’s more, TradeMe reported
maximum grants to $20,000 per
recently that every region in New
couple for an existing home and
Zealand had higher rental asking
$40,000 for a new home. That
prices in May than they did a year
would really help first-home buyers
ago, with many experts warning it’s
to come up with a deposit.
only getting worse for renters.
Late last year the Government made
Instead of people’s retirement
low interest rates, house prices
some tweaks to the eligibility of
savings just sitting in KiwiSaver
have finally started to settle in
its Welcome Home Loan scheme
accounts helping to fund external
most areas.
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Lifting the caps on KiwiSaver HomeStart grants, is just one easy way to enable more first-home buyers into the market. What’s more, now is the perfect time – on top of increasing rents and record
F E AT U R E D L I ST I N G
ULTIMATE LIFESTYLE PROPERTY COMES WITH $250,000 MASERATI An ultimate lifestyle property north of Auckland has just become more attractive with a brand-new Maserati thrown in – worth up to $250,000. “This is incredibly exciting! We’ve been working with the vendors and Winger Maserati in Newmarket to come up with this amazing
collaboration. It is a first for New
worth up to $250,000. Settling
Zealand by a long shot,” says Liam
the bill at Winger Maserati will
Collett - owner of Century 21
be someone else’s worry, says
Collett Realty who’s marketing the
Mr Collett.
property with colleague Donna a’Beckett.
“In our marketing material we’ve shown three Maserati to appeal
Written into the sales and
to different lifestyles and needs,
purchase agreement, as soon as
whether it be a SUV, coupe, or
the successful offer has become
convertible – the choice will be the
unconditional with their deposit
new owner’s, not ours!”
paid and released, the new property owner will be able to choose a brand-new Maserati of their liking
He says every Maserati is a true masterpiece of Italian design, constructed with the utmost attention to detail. Craftsmanship that sits well with the lifestyle property on offer. 273 Forestry Road, Waitoki has an asking price of $6,295,000. The elegant two-storey home is surrounded by over 20 hectares, representing incredible value in an increasingly popular part of North Auckland. “At this asking price, it’s under the replacement value, and so someone is going to snap up a bargain. Not to mention the free Maserati! What
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a fantastic motor vehicle and of
estate experiences and 273 Forestry
and Donna a’Beckett have struck
course they all come with a Ferrari-
Road delivers the absolute dream
again!
built engine. Personally, I love the
lifestyle. The fact that the buyer
Grand Cabrio convertible. It’s a
will also drive away in a brand-new
4.7-litre, V8 with 470 horsepower,
Maserati is more than icing on the
and is a dream to drive,” says Donna
cake. Interest is this property will
a’Beckett.
go gangbusters and we can’t wait to
Mr Collett says the extensive country retreat enjoys great
hand over both sets of keys,” says Liam Collett.
proximity to Auckland, and it’s
“We’ve definitely upped it a notch
abundantly clear how much love
this time! The vendors love our
has been poured into designing
out-of-the-box thinking and are
the home and developing the
right into it. A brand-new Maserati
property. It is perfect for an
will look perfectly at home at this
equestrian centre, suitable for dry
remarkable property. What’s more
stock farming, or running a work-
the long concrete driveway and
from-home business as the current
sealed road mean no dust,” says
vendors do.
Donna a’Beckett.
The architecturally designed
Derryn Mayne, Century 21 New
rendered brick and schist home is
Zealand owner, says Liam Collett
605sqm. Boasting five-bedrooms and three-bathrooms it comes with everything from a theatre room, games room, a Smith & Caughey-inspired staircase, through to a 900kg solid granite island kitchen bench, as well as a triple-car garage. The 20.71-hectare well-fenced flat to rolling farmland includes two ponds, a 300sqm shed, and a two-bedroom minor dwelling currently used as an office. What’s more the automated roadside gates ensure total privacy. “We’re all about creating extraordinary real
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“First it was a McLaren sportscar, now it’s a brand-new Maserati! These guys are great ambassadors for Century 21’s reinvigorated brand and are awesome representatives of their vendors and properties. “Liam and Donna are all about innovation and going that extra mile for everyone involved. While many others in the industry are coming up with excuses, Century 21 Collett Realty keeps delivering time and time again,” says Ms Mayne.
CLICK HERE TO VIEW PROPERTY
AV O I D F I R S T- H O M E W O E S
Five common first-homebuyer mistakes – and how to avoid them BY K AT H R Y N M A D D E N ,
EDITOR, HOME BEAUTIFUL MAGAZINE
It’s probably the most thrilling purchase you’ll ever make – your very own pile of bricks and a one-way ticket to the great Australian dream. Buying your first home should be a joyful experience, yet all too often, errors and emotions impair the process (and result). Thankfully these missteps are easy to bypass, so before you book up your next three Saturdays with open-forinspections, read this...
1. POOR PREPARATION
namely government grants. These
The first step in house-hunting is
most states offer a monetary bonus
not window-shopping online for
for first-time buyers purchasing a
your perfect property (tempting as it
new (previously unoccupied) build.
may be!), but attaining pre-approval
Anyone for a spare $20,000?
vary across Australia and, presently,
for a loan. Potential lenders will look into your income, living expenses and personal debt – plus your proposed deposit – to determine how much you can borrow. While the loan isn’t actually set in stone until the lender receives a signed contract, it does provide a ballpark figure for your budget.
2. BLOWING THE BUDGET Picture this: you’re at an actionpacked auction for the home of your dreams, and figure that exceeding your limit by $5000, and then another $5000, won’t hurt in the long run. It might. Overextending
Poor prep or rushed research
yourself can cause myriad issues
can also mean newbies miss out
down the track, and leaves no buffer
on significant financial assistant,
for interest rate rises or unforeseen
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Buy what you can afford, and rent where you want to live. Further down your time in real-estate ownership, you’ll have the opportunity to buy where you want to live. – C H A R L E S TA R B E Y
financial hardship. Key here is
4. UNDERSTANDING THE TRUE COST OF HOMEOWNERSHIP
forgo due diligence and rush the
Century 21 Australasia, has some
With their eyes fixed firmly on the
an open-for-inspection, try not to
sound advice: “Buy what you can
prize (that being their first piece of
imagine where you’d hang your art
afford, and rent where you want to
property), real-estate rookies often
or spend Christmas mornings with
live. Further down your time in
fail to consider the full gamut of
your (unborn) children. Of course
real-estate ownership, you’ll have
expenses coming their way. Beyond
buying a home is always going to be
the opportunity to buy where you
the actual home deposit, there’s
emotionally charged, but don’t let it
want to live.”
stamp duty, loan application fees
cloud your common sense.
remembering that your first piece of real estate needn’t be your “forever” home. Charles Tarbey, Chairman of
process, overlooking major flaws or, as mentioned above, blowing your budget). Next time you attend
and and mortgage insurance to pay.
3. ESCHEWING EXPERT ADVICE These days there are a plethora of professionals whose sole job is to make your house-hunt easier. Of course they come at a cost, which is why many first-time homebuyers choose to pass on their services altogether – but they may actually
Then there’s a whole new set of bills unbeknownst to renters, including rates, strata fees (for apartments) and ongoing maintenance. To avoid any nasty surprises, create a comprehensive budget before you buy. But you’ll also need to be prepared for the unexpected – a costly leak, for example – so set aside some funds for the future.
save you in the long term. A buyer’s agent, for example, will scope out potential properties on your
5. GETTING TOO EMOTIONAL
behalf, offer you access to off-
To go with your heart or your head?
market properties, and might even
Like most decisions in life, it’s best to
negotiate a better deal for you.
approach real estate with a healthy
It’s also imperative to organise a
balance of both. Experts agree on
pre-purchase building inspection,
one thing: don’t get emotionally
plus enlist a solicitor to look over
attached to a property before
contracts.
it’s yours (otherwise you might
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ABOUT THE CONTRIBUTOR Home Beautiful is chock-a-block with makeover ideas for indoors, outdoors, renovating, decorating plus food and entertaining, it’s a must-have mag and every home decorator’s best friend. Article Link: https://www.homebeautiful.com.au/fivecommon-first-homebuyer-mistakes-andhow-to-avoid-them?category=open_homes
P R O P E R T Y M A R K E T U P DAT E
HIGHEST NUMBER OF PROPERTIES SOLD IN MONTH OF JULY FOR 3 YEARS
BY BINDI NORWELL, REINZ CEO
The number of residential properties sold across New Zealand in July increased by 3.7% from the same time last year to 6,118 (up from 5,897), the highest for the month of July in 3 years, according to the latest data from the Real Estate Institute of New Zealand (REINZ), source of the most complete and accurate real estate data in New Zealand. For New Zealand excluding
• Marlborough: +13.7% (73 to 83
starting to see some early signs
Auckland, the number of properties
– 10 more houses sold) the
of growth.“Some of this can be
sold increased by 2.5% when
ighest for the month of July for
attributed to more certainty post
compared to the same time last
3 years.
the removal of the Capital Gains
year (to 4,224 up from 4,120).
Regions with the greatest decrease
In Auckland, the number of
in annual sales volumes during
properties sold in July increased
July were:
by 6.6% year-on-year (to 1,894 up from 1,777). Regions with the greatest increase in annual sales volumes during July were: • Nelson: +25.0% (from 68 to 85 –
17 more houses sold) the highest
for month of July for 4 years
• Gisborne: +14.9% (from 47 to 54
– 7 more houses sold)
• West Coast: -19.4% (from 36 to
29 – 7 fewer houses) – the
lowest for 19 months
• Tasman: -18.9% (from 74 to 60 –
14 fewer houses)
161 – 33 fewer houses).
Bindi Norwell, Chief Executive at REINZ says: “This is the first time in eight months that we’ve seen the
• Canterbury: +14.6% (from 735 to
number of properties sold around
42 – 107 more houses sold) the
the country increase on an annual
highest for the month of July for
basis suggesting that we’re
3 years
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renewed confidence and parts of the market finding its new normal in terms of pricing. “With August’s surprise 50 basis points drop in the OCR, going forward we expect to see even more signs of growth – especially as we move towards the warmer weather
• Southland: -17.0% (from 194 to
Tax, but it’s also about pockets of
CENTURY 21
when we tend to see more activity in the market,” she continues. “Looking around the country, 9 out of 16 regions saw annual increases in sales volumes with strong growth recorded at the top of the South Island and the middle of the North Island. Overall, we saw the highest number of properties sold for the
month of July across the country in
year-on-year to 2,789 although the
properties) in July 2018 to 39.5% of
3 years,” continues Norwell.
3-month trend of +0.5% is starting
the market (2,419 properties) in July
to show signs of green shoots.
2019.
highest number of properties sold
In July, the Southland region had
The number of properties sold in
in the month of July for 3 years and
the highest annual growth rate with
the $500,000 to $750,000 bracket
the first annual volume growth in 8
a 19.5% increase to 3,048, followed
increased from 30.5% in July 2018
months. Much of the annual growth
by Manawatu/Wanganui in second
(1,798 properties) to 31.3% in July
was led by strong sales volumes
place with an annual growth rate of
2019 (1,914 properties).
in the Papakura District (+19.8%),
18.0% to a new record high of 3,146
but there was also strong growth
and in third place was Gisborne/
seen in Manukau City (+18.5%) and
Hawke’s Bay with an 11.2% annual
Waitakere City (+14.8%).
increase to a new record high of
“The Auckland region also saw the
At the top end of the market, the percentage of properties sold for $1 million or more remained at exactly 12.9% with 762 houses sold
2,798.
for $1 million or more in July 2018
ANNUAL ME DIAN PRICE CHANGES $
=
0.0%
AUCKLAND
GISBORNE
25.4%
TARANAKI
$575,000
1.9%
16.2%
WAIKATO
-4.0%
NATIONAL MEDIAN PRICE:
-0.3% BAY OF PLENTY
3.1%
Record Median Price
9.3%
MANAWATU / WANGANUI
HAWKE’S BAY
14.5%
NELSON
4.5%
8.3%
MEDIAN DAYS TO SELL:
40
-1.9% NORTHLAND
=
0.0%
-5.9%
TASMAN
MARLBOROUGH
3.7%
WEST COAST
$
Source: REINZ Monthly Property Report 13 August 2019 .
20.0%
major slowdown in the number of properties sold in July was Franklin District with a -19.4% fall from the same time last year,” continues Norwell. The REINZ House Price Index for New Zealand, which measures the changing value of property in the market, increased 1.5% year-on-year to 2,761. The HPI for New Zealand excluding Auckland increased 5.9% from July 2018 to 2,739 a new record high. The Auckland HPI decreased -3.3%
$
SOUTHLAND
The only area in Auckland to see a
WELLINGTON
CANTERBURY
21.7% OTAGO
Taranaki, Bay of Plenty and Tasman/
compared to 792 houses in July
Nelson/ Marlborough/West Coast
2019.
also experienced new record high index levels during July showing the strength of the housing market in these regions.
“This is the first time in 8 months where we’ve seen increases across the country in both the number of properties sold and the median
In July, the REINZ HPI saw 11
price when compared to the same
out of 12 regions experience an
time last year, suggesting that
annual increase in their index level,
the housing market is in a stable
Auckland was the only region to
place at the moment. With the
experience a decrease.
added stimulus of the OCR drop,
The number of homes sold for less than $500,000 across New Zealand fell from 42.4% of the market (2,498
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we expect the market to pick up even more as we head into spring,” concludes Norwell.
TIME TO BUY
TIME FOR RENTERS TO GET ON A MORTGAGE CALCULATOR “Potential first-home buyers need to head to a mortgage calculator. Those currently renting might be pleasantly surprised,” says Derryn Mayne, Century 21 New Zealand owner.
Her comments came as the Reserve Bank announced on 7 August it will cut the Official Cash Rate from the current 1.50% to a new and surprising record low of 1.00%. New Zealand economists believe mortgage interest rates will drop a bit further in the coming months, but not as low as the 1% to 2% rates other countries have experienced. Ms Mayne says now is a good time for first-home buyers to do their sums on what they’re paying in rent compared to what the cost would be to service a mortgage. They should also seek the advice of a mortgage broker to assess their lending capacity and best options.
SCOOP BUSINESS W W W . S C O O P. C O . N Z
Currently based on the typical
“We all want more Kiwis to get into
two-year home loan bank special
homeownership. My only worry is
of 3.79%, buying a house at the
that the Reserve Bank’s tough 2013
national median price of $585,000,
LVR policy remains in place, albeit it
after paying a 20% deposit, would
has softened somewhat.
cost in interest repayments about the same as paying the national median rent of $500 a week.
“Regardless, the stringent deposit requirements are still too tough for many. That’s a big shame, as
“While long-term capital gain gives
increasingly more and more New
buying an inherent advantage,
Zealanders renting would be able
for most Kiwi renters it remains a
to service a mortgage in the current
difficult transition. However, with
environment,” she says.
this OCR cut and the possibility of more to follow, the case to buy will only become stronger and stronger.
Derryn Mayne says Century 21 Home Loans is expecting a lift in enquiries following this
“If interest rates fall to say 3% in the
announcement, with mortgage
coming months and rents across
brokers generally best placed to
the country continue to rise, while
advise people which lender and
house prices remain steady, it will
what approach is best suited to
be the best opportunity for first-
people’s current financial situation
home buyers to get into the housing
and future plans.
market for some years - if they can stump up a deposit.” Ms Mayne says homeownership in New Zealand has proven itself again and again as a good term investment and is a significant advantage when people retire.
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To read the full article, visit: http://www.scoop.co.nz/stories/BU1908/ S00189/time-for-renters-to-get-on-amortgage-calculator-ocr-cut.htm
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