J U L Y
M A R K E T
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P U L S E
C21
PUBLISHER Century 21 New Zealand Ltd
CONTRIBUTORS Derryn Mayne Bindi Norwell Cameron Brewer
EDITORIAL ENQUIRIES Century 21 New Zealand +64 9414 6041
ADVERTISING ENQUIRIES Century 21 New Zealand +64 9414 6041
WELCOME TO THE
JULY 2020 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 J U L Y
C21 NEW ZEALAND NEWS
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MARKET DRIVERS
06
Industry stats defying doom and gloom.
'Mum and Dad' Investors return to property market.
CEO, Century 21 New Zealand, Derryn Mayne
Cameron Brewer
EXPANDING NETWORK
04
KIWISAVER 07
Century 21 opens in Queen Street.
KiwiSaver should be allowed for investment properties.
Cameron Brewer
Cameron Brewer
NZ ON THE MOVE
05
PROPERTY MARKET UPDATE
08-09
Turangi agency offers $1,000 Kiwi travel vouchers.
National house prices continue to rise post-COVID.
Cameron Brewer
REINZ CEO, Bindi Norwell
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C21 NEW ZEAL AND NEWS
INDUSTRY STATS DEFYING DOOM AND GLOOM 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
As of last month, real estate across the country was still officially ahead on last year which was very encouraging all things considered. Since then industry numbers have been moving around a bit. Nonetheless, any earlier doom and gloom has yet to be delivered, with housing demand still outstripping supply.
but what’s really encouraging is
but the latest numbers show most
the huge surge we saw in house
regions in New Zealand are still
sales when lockdown restrictions
seeing monthly increases in median
lessened in May – with the number
price, with some even achieving
of houses selling nationwide lifting
record median prices.
nearly 200% compared to April.
We all know things will change.
Sure, some prices have slipped
We just don’t know to what extent.
in recent months, but at the
These numbers, however, were the
writing of this, overall median
first real confirmation that overall prices have yet to change
house prices are still
dramatically.
comfortably up on this time last year for both Auckland
"...the latest numbers
One thing that
show most regions in New Zealand are still seeing
has changed is the time it now
REINZ released its Monthly
and the
Property Report for May which
rest of the
showed median house prices across
country.
New Zealand were up by 6.9%,
At this
median price, with some
compared to May 2019 – with
point in
Auckland up 7.1%. However, median
time we’ve
even achieving record
more patient,
prices compared to April were
lost a couple
median prices."
but the fact that
mixed, with the country seeing an
months, but we
overall drop. Nonetheless 11 out
certainly haven’t lost
of 15 regions saw monthly median
a year.
price increases.
monthly increases in
Vendors need to be a little
prices are still news for homeowners.
I certainly don’t agree with one
We knew the volume of sales would
commentators were predicting a
be well down on May last year,
swift and severe property crash,
02
a property.
holding up well is great
Four months ago some
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takes to sell
CENTURY 21
industry website’s claim that Auckland is now a buyers’ market. However, there is no doubt that
things in Auckland have levelled out
Factors attracting first-home buyers
somewhat.
and investors into the market
The Auckland market is now a more realistic one, but we’re also seeing a boost of activity from firsthome buyers and ‘Mum and Dad’ investors. For those two groups it’s proving to be an opportune time.
include record-low interest rates, the Reserve Bank temporarily removing LVRs meaning lower deposits required, rents remaining relatively high, and poor bank deposit rates driving investors to
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look for better returns. We’re still seeing plenty of properties making great money and selling quickly. With agents screaming out for stock, and buyer demand strong, rest assured this winter remains a great time to list.
EXPANDING NETWORK
CENTURY 21 OPENS IN QUEEN STREET
and surrounding areas. They have
more ownership and autonomy
considerable contacts domestically
of Century 21 on this side of the
but also bring expertise in dealing
Tasman,” says Ms Zhang.
with overseas buyers and sellers. What’s more, increasing numbers of ex-pats are returning home, looking
of the city, in New Zealand’s commercial capital, is really exciting for Century 21. It further highlights the traction the brand has been getting over the past year,” says Derryn Mayne, Owner of Century 21 New Zealand. The new Unit B, 508 Queen Street office follows franchises opening in Papakura, Papatoetoe, and Century 21 returning to the South Island in recent months.
for property to live or invest in.
are experienced in business and bring deep connections to the
Zealand seen as a safe bet when it
community. Opening Century 21
comes to property investment. We
Queen Street Realty is another
have plenty of experience advising
significant milestone for our
overseas buyers about New
company,” says Derryn Mayne.
Zealand’s investment rules and legal requirements,” he says. Ms Zhang says they’re delighted to be flying the Century 21 flag on Auckland’s main street, given how recognised and regarded
Queen Street Realty, Simon Dai and
around the world, with its global
Hanli Zhang, bring considerable
website translating into every
real estate experience along with
leading language.
Joelynn Qiao, Linda Liu, Phoebe Wu, Henry Lu, and Monica Leung.
paying off. Our franchise owners
overseas have continued, with New
Century 21 is for international sales
Zhang, Winson He, Sandy Chand,
Zealand’s property market, and it’s
“Despite Covid-19, enquiries from
Franchise owners of Century 21
their sales and rental team - Winnie
approach when it comes to New
“We’ve been following the momentum Century 21 has achieved with its high-profile global rebrand and wanted to be
Mr Dai says the team is focused
part of it. Another positive for
both on residential and commercial
franchises is that over the past 18
real estate in central Auckland
months New Zealand has regained
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Pictured: Simon Dai
“Opening a franchise in the heart
“We continue to take a positive
Pictured: Hanli Zhang
Century 21 New Zealand has opened a new office in Queen Street, central Auckland.
NZ ON THE MOVE
TURANGI AGENCY OFFERS $1,000 KIWI TRAVEL VOUCHERS A Turangi real estate agency is giving away $1,000 travel vouchers to ‘explore Aotearoa’s beautiful backyard’ in a ‘Get NZ Moving’ winter promotion.
“Rentals remain relatively strong
“This promotion is a win-win. It
here, and with local house prices
will help drive the turnover of local
still up on last year, most property
homes, keeping Turangi prices
owners are keen to hold onto their
ticking along. It will also get a few
places. However, there’s also wider
more people out and about the
economic uncertainty. So, with
country, supporting Kiwi tourism
demand still strong and prices
and hospitality businesses,”
holding up well, our suggestion is
says Wai Johnson.
to list sooner rather than later,”
Owner of Century 21 New Zealand,
The Kiwi travel voucher is available
she says.
to those who list and sell their
Ms Johnson says Century 21 has
21 in Turangi has a very strong
a long and successful history in
connect with locals and a proven
Turangi. In recent years, the office
commitment of giving back to the
and agents have won many national
community. She applauds their
and Australasian awards. Century
latest initiative which will benefit
21 also maintains a great network of
Kiwi businesses most in need
the Greenlea Rescue Helicopter.
likely buyers.
this winter.
However, these are obviously not
“We’ve got a very strong property
property with Century 21 Premier (Turangi). Conditions apply. “Normally at this time of year we host a charity evening, with last year’s proceeds going to
normal times. With the borders closed, we want to encourage our valued vendors to explore their own country and support local economies,” says local Century 21 franchise owner, Wai Johnson. She says buyers are aplenty with the latest REINZ sales figures
Derryn Mayne, says Century
management portfolio, which means we work closely with a lot of landlords who are always looking for investment opportunities. We’re also now getting plenty of out-oftown enquiries from people who see Turangi as a great place to buy with returns much better than
showing Turangi’s annual median
bank interest.”
house price continues to rise.
Century 21 Premier’s $1,000 travel
However, she says finding stock to sell is not easy.
0 0 10 I
voucher promotion is already getting phone calls.
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W KI VEL R A E TR CH U O V
O
T
GE
M Z N
MARKET DRIVERS
'MUM AND DAD' INVESTORS RETURN TO PROPERTY MARKET “We’re now seeing more ‘Mum and Dad’ investors eager to get into the property market, which is definitely helping to hold house prices up,” says Derryn Mayne, Owner of Century 21 New Zealand.
they can snatch a bargain. “Our Century 21 offices are
gain will always be delivered in the medium to long term.”
reporting more enquiries from the
The Century 21 boss says some
likes of city investors now taking
retirees presume they can’t
a greater interest in the regions.
borrow money, but many could be
Given the ongoing strength of our
pleasantly surprised if they can
regions, this makes perfect sense,”
show secure projected income
she says.
from a rental investment they’re
According to the REINZ and
keen to purchase.
Alexander report, Auckland now
“Our offices are different to most
has on average the lowest annual
because they’re all linked in with
rental yield with capital growth
Century 21 Financial New Zealand.
slowing, while the likes of the
Managing Director Julius Capilitan
Manawatu-Whanganui region
has significant experience in home
continue to perform strongly for
loans and financial services, and
residential property investors both
has brilliant access to some great
latest Monthly Property Report
in yields and capital gain.
mortgage deals.
showed 11 out of 15 regions have
Ms Mayne says feedback also
“Every day of the week Century 21
indicates that retirees are shying
is helping people of all ages and
away from commercial building
stages secure funding at the best
investments and syndications given
rates right through to ensuring
the economic fallout from Covid-19
investors build great property
and ongoing uncertainties facing
portfolios. Over the coming
now at play.
businesses and retailers.
months, we expect to do much
The cost of borrowing is at record
“Increasingly, residential property
released in June by REINZ and independent economist Tony Alexander which revealed one in four New Zealand agents say they are noticing more investors in the market. At the same time REINZ’s
experienced median price increases on the previous month. Ms Mayne says the arrival of ‘Mum and Dad’ investors is understandable given many factors
low levels; poor bank deposit rates are driving people to look for better returns; rents remain strong nationwide; the Reserve Bank has temporarily removed LVRs meaning 30% deposits from most investors are no longer required; and investors are increasingly hopeful
is looking like a good place to put your money. Housing demand still outstrips supply and sale prices continue to defy any doom and gloom. While rents in some areas will no doubt soften, the returns remain way better than bank interest and of course solid capital
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more of it,” says Derryn Mayne.
Pictured: Julius Capilitan
Her comments follow a joint report
K I W I S AV E R
KIWISAVER SHOULD BE ALLOWED FOR INVESTMENT PROPERTIES The Government needs to broaden KiwiSaver’s withdrawal criteria to allow more New Zealanders to access the scheme to buy an investment property, says one real estate boss.
first home, or for land to build your
but use your KiwiSaver to buy an
home, if you’ve been in KiwiSaver
investment property in say Waikato.
for at least three years. There
That’s increasingly appealing given
are also circumstances in which
the lower deposit requirements,
people may access their funds if
rock-bottom interest rates, and a
they’ve previously owned a home.
buyers’ market.”
However, there remains absolutely no opportunity to use the voluntary savings scheme to buy a property you’re not going to live in,” she says.
KiwiSaver has more than three million members with average balances of around $20,000, with many accounts experiencing volatility in value since the Covid-19 health and economic crises. Inland Revenue figures revealed today also show in April and May more Kiwis tapped into their retirement savings by making hardship withdrawals. Last year the Retirement Commissioner suggested that KiwiSaver members should be allowed to withdraw money from their accounts to buy rental properties, not just first homes. Owner of Century 21 New Zealand, Derryn Mayne, now believes the concept needs to be urgently revisited by the Government.
home for at least six months. Ms
occupier criteria was fine during
properties, using KiwiSaver, being
the Global Financial Crisis over
quickly flipped could be easily
a decade ago, as there were far
rectified. A rule could ensure
less people in the scheme and
people accessing their funds have
the average balances were less
to hold onto to their investment
than $3,000, given KiwiSaver was
property for certain amount of time.
launched in 2007.
She says enabling Kiwis to use the
“The Government needs to think
scheme to help buy an investment
of new ways to encourage property
property is a safe bet for them and
purchases. We are not short of
positive for the country. It would
buyers for now, but as a country
boast home ownership which has
we need to think laterally if we’re
declined over the past 30 years
to keep our housing market ticking
from about 78% in the 1980s to
along.” The Century 21 New
about 55% now.
Zealand real estate boss says it’s wrong people can only access KiwiSaver as an owner-occupier property purchaser, when the reality is a lot of people simply
and the growing opportunities out
want to live.
“You can withdraw funds for your
using the scheme must live in the Mayne says any fear of investment
can’t afford to buy where they
broadened.
for an investment property, those
Ms Mayne says the strict owner-
“Given these unprecedented times there, the rules now need to be
As KiwiSaver funds cannot be used
deliver a strong capital gain over the long-term. What’s more, such a simple policy tweak would give a shot in the arm to New Zealand’s property market and help the overall economy,” says
“If you live in Auckland and can’t afford to purchase there, you should be able to stay renting C21 MARKET PULSE
“Residential property will always
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Derryn Mayne.
P R O P E R T Y M A R K E T U P DAT E
NATIONAL HOUSE PRICES CONTINUE TO RISE POST-COVID
BY BINDI NORWELL, REINZ CEO
House prices have continued to surpass predictions for how they would perform post-COVID with median house prices across New Zealand increasing by 9.2% in June to $639,000, up from $585,000 in June 2019 and up from $620,000 (3.1%) in May 2020, according to the latest data from the Real Estate Institute of New Zealand (REINZ). June marks 105 months in a row
Bindi Norwell, Chief Executive
The number of properties sold in
of year-on-year median prices
at REINZ says: “Earlier this year,
June across New Zealand increased
increases for the country.
there were a number of predictions
by 7.1% from the same time last year
that house prices would fall post-
(from 6,184 to 6,625) - the highest
COVID. However, we are yet to see
number of properties sold in a June
evidence of that happening, with
month for 4 years.
Median house prices for New Zealand excluding Auckland increased by double digits with an 11.3% uplift to $540,000, up from $485,000 in June last year and up from $530,000 in May this year. Additionally, Auckland’s median house prices increased by 9.2% to $928,000 up from $850,000 at the same time last year and up from $904,500 in May this year. This was the second highest median price on record for the City of Sails. Waikato achieved a record median price in June of $615,000 up from the previous record of $600,000 set last month, thereby marking two consecutive months of record median prices.
every region in the country seeing an uplift from the same time last year, and 10 out of 16 regions seeing an uplift from May.
For New Zealand excluding Auckland, the number of properties sold increased by 6.2% when compared to the same time last
“With wage subsidies and mortgage
year (from 4,306 to 4,571) – the
‘holidays’ still firmly in place,
highest for the month of June in
and demand for good property
4 years.
exceeding supply, we wouldn’t be so bold as to say there won’t be an easing of pricing in the coming months when these support mechanisms come to an end. But right now, Kiwis’ love affair with property continues unabated – especially with the low interest rates we currently have in the market,” she continues.
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In Auckland, the number of properties sold in June increased by 9.4% year-on-year (from 1,878 to 2,054) – the highest for the month of June in 4 years. Shaking off the COVID-19 impact, June was the first time in three months where regions have started to see increases in annual sales
volumes, with 10 out of 16 regions
in September, that there may be a
Southland with a 12.2% annual
seeing annual increases.
potential trough in activity levels in
increase to 3,415.
the coming months,” she warns.
“Not only did sales volumes return
Looking at the month-on-month
to ‘normal’ in June, they were the
“Although, with a 19.7% increase in
shifts to help gain a clearer picture
highest for a June month in four
new listings in June – the highest
of how the underlying value of
years suggesting that the impact
for the month of June in 4 years
the market is recovering from
of lockdown is now well and truly
– hopefully this will lead to more
COVID-19, there were three new
behind the country, and that people
choice for buyers in the coming
record high index levels recorded
have been able to get on with their
months,” continues Norwell.
in June, with 9 of the 12 regions
sales and purchasing decisions as per usual,“ says Norwell.
changing value of property in the
returning home as a result of
market, increased 8.6% year-on-
ANNUAL ME DIAN PRICE CHANGES
$
13.2%
17.1%
15.8%
45
15.6%
3.9%
TASMAN
individuals are looking to purchase property for their family to live in which is also likely to have bolstered
There are concerns that with the wage subsidies, mortgage holidays ending and an election
WELLINGTON
MARLBOROUGH
5.4% CANTERBURY
21.7%
SOUTHLAND
of COVID-19, many of these
lockdown peak in activity levels.
HAWKE’S BAY
10.5%
WEST COAST
New Zealand’s limited cases
that this may well be a post-
18.8%
MANAWATU / WANGANUI
19.8%
and it’s important to say it again,
29.4% GISBORNE
2.4%
MEDIAN DAYS TO SELL:
“However, we’ve said it before,
8.7% BAY OF PLENTY
NELSON
9.2%
Norwell.
10.5% NORTHLAND
WAIKATO
TARANAKI
NATIONAL MEDIAN PRICE:
June’s sales volumes,” points out
Plenty (-0.7%) and Otago (-1.0%).
9.2%
12.0%
$639,000
this were Northland (-0.7%), Bay of
AUCKLAND
Record Median Price
Source: REINZ Monthly Property Report 14 July 2020.
increase. The only exceptions to
New Zealand, which measures the
“With thousands of New Zealanders
$
recording a month-on-month
The REINZ House Price Index for
OTAGO
year to 2,991.
The 1-month data showed that the
The HPI for New Zealand excluding Auckland increased 9.5% from June 2019 to 2,982 and Auckland’s HPI increased 7.7% year-on-year to 3,002. In June, Manawatu/Wanganui had the highest annual growth rate with
underlying value in the market has mostly held strong and begun to recover compared to May. The HPI for the country increased 0.9%, for New Zealand excluding Auckland it increased 0.8% and Auckland’s HPI rose 0.9% compared to May.
a 19.4% increase to a new record index level of 3,683. In second place was Gisborne/Hawke’s Bay with an annual growth rate of 17.8% to a new record index level of 3,226 and in third place was
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