C21 Market Pulse | April 2024 | New Zealand

WELCOME TO THE April 2024

ISSUE OF C21 MArKET pUlSE

p UB li SHE r

Century 21 New Zealand Ltd

CONT ri BUTO r S

Jen Baird

Tim Kearins

Lee Cocorullo

ED i TO ri A l ENQU iri ES

Century 21 New Zealand

+64 9414 6041

ADVE r T i S i NG ENQU iri ES

Century 21 New Zealand

+64 9414 6041

D i SC l A i ME r

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M OMENTUM i N MU lT ipl E MA r KET

MEASU r ES

BY JEN BAIRD, REINZ CEO

The Real Estate Institute of New Zealand (REINZ), released their March 2024 data today, showing a significant increase in listings and stock levels, creating more options for buyers.

REINZ Chief Executive Jen Baird says the market is clearly more active compared to a year ago, with high listing numbers, increased stock levels, higher sales counts, and higher median sale prices.

“LISTINGS INCREASED SUBSTANTIALLY, UP BY 23.9% NATIONALLY COMPARED WITH MARCH 2023, REINFORCING A TREND WE HAVE SEEN SINCE THE BEGINNING OF 2024 WITH MORE PROPERTY COMING TO MARKET. ”SAYS BAIRD.

Listings nationally increased by 23.9% year-on-year from 9,242 to 11,455; compared with February 2024, national listings decreased 2.8% from 11,788 to 11,455. Five regions, all in the North Island, saw large year-on-year increases, with Wellington up 215 listings (+32.4%), Auckland up 986 listings (+31.4%), Manawatu-Whanganui up 112 (+30.4%), Bay of Plenty up 172 listings (+28.8%), and Hawke’s Bay up 72 listings (+26.8%). Only Nelson (-2.7%) and West Coast

(-1.4%) recorded decreases in listings compared with March 2023. This is the second consecutive month where North Island regions have recorded the highest year-on-year increases in listings. New Zealand’s inventory levels have increased by 13.5% from 29,284 to 33,245 properties year-on-year – the highest level since 2015.

“Sales activity was higher in 13 of 16 regions compared to March 2023. Seven of those regions’ sales counts increased by over 10%; Gisborne led the way with the highest year-on-year increase in sales (+27.8%), reflecting a more usual level of demand, bouncing back from the low levels post the devastation of cyclones Hale and Gabrielle in early 2023.”

The total number of properties sold for New Zealand increased in March (+7.4%) compared to February 2024, from 6,073 to 6,521, and up 8.0% year-on-year, from 6,040 to 6,521. Only Northland (-1.9%) and Otago (-6.3%) recorded decreased sales activity compared with March 2023.

The national median sale price has increased by 2.7% from $779,000

to $800,000 year-on-year; it also increased by 1.1% from February 2024, from $791,500 to $800,000. For New Zealand, excluding Auckland, the median price also increased – it was up by 2.3% year-on-year from $695,000 to $711,000, and up by 0.1% month-on-month from $710,000 to $711,000.

“This is the second consecutive month recording a year-on-year increase in the median sale price nationally. This, along with the increased year-on-year levels of sales and listings, suggests that we are past the lowest point of this market cycle.”

Median days to sell decreased by 6 days compared to a year ago, from 44 to 38 days, both nationally and for NZ excluding Auckland. In 12 of 16 regions, median days to sell were lower compared with March 2023, with the biggest decreases in Marlborough (down 26 days), Hawke’s Bay (down 25 days), and Tasman (down 20 days).

The HPI for New Zealand stood at 3,655 in March 2024, down by 1.2% compared to the previous month and up by 2.6% for the same period last

ANNUAL MEDIAN PRICE CHANGES

year. The average annual growth in the New Zealand HPI over the past five years has been 5.7% per annum, and it is currently 14.5% below the peak of the market reached in 2021.

Overall, the data paints a picture of the New Zealand housing market being more active, characterised by increasing listings, solid sales activity, expanding stock levels, and lifts in property prices.

“This summer has seen a return to a more normal level of real estate market activity after a relatively slow and subdued 2023. Reasons for this will vary, for example some vendors may prefer not to wait any longer and are willing to ‘meet the market’ with their price expectations. Some

buyers may want to act now ahead of potential further lifts in sale prices or potential increased competition for properties, as upcoming changes to bring the bright line test back to two years, and the reintroduction of interest deductibility on investment properties, are expected to draw some investors back to the market in the next few months.

“The current economic environment with higher interest rates and some uncertainty in the jobs market will mean some buyers remain cautious, with prices still off their peaks from a couple of years ago, however growing numbers of buyers are acting now. Most agents are cautiously optimistic that market

activity will continue to pick up as we move into the cooler months,” adds Baird.

Click here to read the full report

Source: REINZ Monthly Property Report 16 April 2024.

When you are a landlord looking to hire a property manager to handle your rental properties, it is important to ask the right questions to ensure you are choosing the best professional for the job. Here are the top three questions you should ask:

1. WHAT IS YOUR EXPERIENCE IN PROPERTY MANAGEMENT?

One of the first questions you should ask a property manager is their experience in handling rental properties. This could include how long they’ve been in the industry and the types of properties they have managed in the past. It’s essential to choose a property manager with a solid understanding of the local rental market and who has the necessary knowledge and skills to handle any issues that may arise with your property.

2. HOW DO YOU HANDLE TENANT SCREENING AND SELECTION?

Finding reliable tenants is essential for the long term profitability of your rental property. Ask the property manager for their process of screening and selecting tenants. What is their

criteria for evaluating prospective tenants? For example, this could be their credit score, rental history and income verification (payslips). Someone who has a thorough screening process will help minimise the risk of late payments and property damage, as well as other issues that may arise with problem tenants.

3. HOW DO YOU HANDLE MAINTENANCE AND REPAIRS?

When it comes to managing rental properties, maintenance and repairs are inevitable aspects. To ensure your property is well maintained and any repairs are promptly addressed, it’s crucial that you ask how your prospective property manager will handle these matters. What are their maintenance policies and how do they address repair requests from tenants? Do they have a list of people they like

to work with? They should have a network of trusted and affordable contractors who can handle any issues that may arise.

You should also inquire about their fee structure, what the communication looks like between yourself and the tenants, and their process for handling late payments and evictions. It’s important to choose a property manager who aligns with your expectations and goals for your property or properties. By asking the right questions you can ensure you choose a property manager with the necessary experience, skills and processes to effectively manage your investments. This will contribute to the success and profitability of your rental properties in the long run.

HAT WILL HAPPEN TO PROPERTY AFTER FREEDOM DAY?

N EW ZEA l AND'S r ENTA l MA r KET SET

FO r S i GN i F i CANT ADJUSTMENTS: WHAT LANDLORDS AND TENANTS NEED

TO KNOW

BY TIM KEARINS, CENTURY 21 NEW ZEALAND

The landscape of property rental in New Zealand is on the verge of a substantial transformation with proposed changes in property tax and tenancy laws. Spearheaded by the National-ACT-NZ First coalition, these adjustments are poised to leave a lasting impact on both landlords and tenants alike. Here’s a comprehensive breakdown of the impending alterations:

DEDUCTIBILITY OF MORTGAGE INTEREST FOR LANDLORDS

Effective April 1, 2024, landlords will be entitled to claim 80% of the interest paid on their mortgage as a business expense for their rental properties. This percentage is set to increase to 100% from April 1, 2025.

NOTICE PERIODS

Under the new legislation, the notice periods for terminating tenancies will undergo modifications. Tenants will now be required to provide a 21-day notice, whereas landlords will need to give a 42-day notice. This marks a reduction from the previous 28-day notice period for tenants and 63-day notice period for landlords in certain situations.

PET BONDS

The new laws will empower property owners to request more than the standard four weeks’ bond money to cover potential damages from pets. Read more about the laws on p.9.

REINSTATING 90-DAY NO-CAUSE EVICTIONS

The government is reintroducing "no-cause eviction," allowing landlords to terminate tenancies without providing a reason as long as they give a 90-day notice.

BRIGHT-LINE TEST

The bright-line test, determining tax liabilities on property sales within a specified period, is set for an adjustment. Currently applicable

to properties bought after March 27, 2021, and sold within five or ten years, the bright-line period will be reduced to two years for properties sold after July 1, 2024.

Pending confirmation details include whether trust transfers trigger the bright-line rules, the calculation start date of the bright-line period, and the exemption for the 'main home.'

These proposed changes carry significant implications for tenancy, tax laws, and property investment in New Zealand. As such, individuals involved in these sectors are strongly advised to seek legal and accounting counsel to comprehend the ramifications and adapt to comply with the new regulations.

While these adjustments may necessitate operational modifications, they signal a potentially positive shift for property investment in New Zealand, opening up new opportunities and avenues for both landlords and tenants.

Source: Green Law

Century 21 is thrilled to announce the opening of its newest office, Century 21 Pro Realty, located in Pokeno in New Zealand's vibrant Waikato region. This marks a new chapter of growth and development for Principal Ginni Parvez who leads the team.

With over a decade of experience in the sales industry, Ginni's career has been shaped by diverse experiences, including ventures in hospitality and direct sales. This has instilled in him the values of patience, attention to detail and proactivity. As a real estate sales specialist, he is deeply committed to achieving optimal outcomes for all his clients and delivering unparalleled customer service.

Commenting on why he decided to make the move to C21, Ginni said, "I joined the Century 21 brand to gain more opportunities for growth and advancement in leadership and business development. The power of the global brand gives me the ability to access a larger network of clients."

Fluent in multiple languages – English, Hindi and Punjabi – Ginni prides himself in his ability to connect with individuals from various cultural backgrounds. This has enabled him to expand the

reach of his network and enhance opportunities for finding buyers for his clients' homes.

James Bell, CEO of Century 21 Australasia said, "The opening of Century Pro Realty reflects Century 21's focus on expansion in New Zealand and further

demonstrates the brand's commitment to delivering exceptional real estate services across the Australasian region. We are delighted to have Ginni Parvez and his team on board and look forward to seeing what they achieve in the future".

N Z GOVE r NMENT ANNOUNCES p ET BOND p O li CY

The government has announced a two-week pet bond in a bid to make renting with an animal easier. It also introduces new obligations for tenants to pay for the damage their animals cause. It intends changing the Residential Tenancies Act next month in a bid to give pet owners more choice when trying to find a rental.

Housing Minister Chris Bishop made the announcement alongside ACT leader and Regulations Minister David Seymour.

The changes:

• Introducing a pet bond (a maximum of two weeks' rent) that can be charged in addition to the existing bond

• Making tenants liable for all pet damage to properties beyond fair wear and tear, whether accidental or deliberate.

• Requiring tenants can only have a pet or pets with the landlord's consent. The landlord can withhold consent on reasonable grounds.

“Pets are important members of many Kiwi families. It's estimated that around 64 percent of New Zealand households own at least one pet, and 59 percent of people who don't have a pet would like to get one," Bishop said.

"Anyone who has ever tried to find a pet-friendly rental property will know how hard it is, so we're going to make it easier." Seymour said the policy would fix the problem of tenants being locked out of rental markets due to landlords not being willing to take a risk on tenants with pets.

He was confident tenants wouldn't mind paying extra (set at a maximum of two weeks' rent) if it meant their pet could move in too. More landlords would be willing to allow pets if they could protect themselves from some of the risks.

He said the move would also be important for helping domestic abuse victims who were often trapped in violent relationships in part to protect animals.

The government intends to introduce a bill to amend current laws in May.

Source: rnz.co.nz

Every year the NaZCAR Lemons Race brings together all types of cars, from Honda to BMW, to an "old bucket of bolts" – all battling for the right to become the winner of New Zealand's most beloved and successful motorsport series.

The story began in 2016 with the '24 Hours of Lemons' which quickly captured the hearts of New Zealanders. This low-budget, grass roots concept offers a gateway into motorsport for enthusiasts of all levels. From families to corporate teams, to aspiring racers and even seasoned veterans, Lemons welcomes everyone with a sense of humour and a thirst for competition.

The beauty of Lemons lies in its emphasis on accessibility. Car builds prioritise creativity and resourcefulness over high-powered

engines. This allows participants to transform anything from a trusty Honda to a barely-there "bucket of bolts" into a track warrior.

The series motto, "It's not a race, it's a competition to see who can drive the slowest car the fastest," perfectly encapsulates the lighthearted spirit.

This year Century 21 Jean Johnson in Dargaville has sponsored a car with Vince Cocurullo, Mayor of Whangårei District Council as their volunteer driver. He had the following to say:

"Having locally owned and operated businesses as major sponsors for

events such as the Lemons Race helps provide opportunities for our Northland people. In this case, new young drivers have the opportunity to learn how to be part of a team, having some fun while testing their limits in a 'safe' environment.

"As someone who has been in the driving seat of these vehicles, there is no way of explaining the experience or putting the experience into words, which can do it justice. The emotions generated when driving these race cars, the endurance needed to complete the race, and the noise of the engines are all part of the experience and for each person these factors are different. It is something that you need to experience to understand."

The event raises awareness for men's health and operates alongside the Lemons and Limes Foundation, a nonprofit focusing on engaging Kiwis through safety and driver training programs, community initiatives, and mechanical awareness.