WELCOME TO THE August 2024
P u BLI s HER
Century 21 New Zealand Ltd
CON t RIB ut OR s
Jen Baird
Julius Capilitan
Jean Johnson
EDI t ORIAL ENQ u IRIE s
Century 21 New Zealand +64 9414 6041
ADVER t I s IN g ENQ u IRIE s
Century 21 New Zealand +64 9414 6041
DI s CLAIMER
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G ree N SHOOt S
A ppe A r IN NEW ZEALAND’S
pr O pert Y m A r K et
BY JEN BAIRD, REINZ CEO
The Real Estate Institute of New Zealand (REINZ) released its July 2024 data today. The data shows signs of positivity with increases in sales numbers and listing volumes.
REINZ Chief Executive Jen Baird said July brought a new wave of buyer activity not typically seen in late winter. While listings continue to increase, the rise in sales volumes has seen the total number of properties for sale in New Zealand fall compared to last month. However, median prices have decreased by 2.2% nationally compared to a year ago, indicating that houses sold at a lower price in July.
The total number of properties sold in New Zealand increased by 14.5% year-on-year, from 5,070 to 5,806, and by 19.7% compared to June 2024, from 4,851 to 5,806. Thirteen regions saw an increase in sales for July 2024. The most significant increases were in Gisborne (+53.6%), Otago (+45.7%), Marlborough (+42.9%) and Southland (+38.8%). Compared to June 2024, only one region saw a decrease in sales volume, Nelson (-21.2%).
“Although we have not yet reached the spring ” season, we are observing early signs of growth in the market not typically associated
with this time of year. This can be seen through the seasonally adjusted data, which indicates an increase of 5.4% in national sales compared to last year, which reflects a market performing above anticipated levels, says Baird.
Fourteen of the fifteen regions have seen a rise in new listings year-on-year, with Wellington (+55.0%), Gisborne (+50.0%) and Southland (+36.9%) leading the way. The only region to see a decrease in new listings year-on-year was Taranaki (-4.8%).
Seven of the sixteen regions had a median price increase year-on-year. West Coast and Tasman stood out, with West Coast’s median price increasing by 21.2% year-on-year ($330,000 to $400,000), and Tasman saw a 10.6% increase ($710,000 to $785,000). Seven regions saw an increase month-on-month (Waikato +3.4% to $725,000, Bay of Plenty +2.0% to $800,000, Tasman +8.7% to $785,000, Nelson +1.4%to $657,000, West Coast +25.0% to $400,000, Otago +6.4% to $665,000 and Southland +9.9% to $482,500).
The national median price decreased by 2.2% year-on-year, from $770,000 to $753,000, and decreased by the same amount month-on-month. For NZ, excluding Auckland, the median price decreased 1.5% year-on-year from $680,000 to $670,000. Month-on-month, the median price also decreased by 1.5%.
“There has been downward pressure on prices in most parts of the country this year and sales volumes have been lower than average as the cost of living, concerns around job security and interest rates challenge many people in New Zealand. However, it seems this sentiment is beginning to change.
The slight decline in interest rates in July, and a belief that there are more to come, appears to have encouraged buyer activity, as reflected in the increase in sales,” comments Baird.
The national inventory level increased by 32.3% (+7,466) in July, from 23,090 to 30,556 year-on-year and decreased by 3.7% from 31,745 month-on-month.
ANNUAL MEDIAN PRICE CHANGES
For New Zealand ex Auckland, inventory levels increased 30.4% (+4,409) year-on-year from 14,497 to 18,906 and decreased 3.5% (-677) compared to June 2024.
There were 647 auctions nationally in July 2024 (11.1% of all sales), compared to 529 (10.4% of all sales) in July 2023. The Auckland region saw 332 properties sell by auction in July 2024 (18.4% of all sales), compared to 326 properties sold by auction or 19.1% of all sales in July 2023.
“The recent 25 basis point reduction in the OCR, and the strong signals of more reductions to come, will bring relief to households and will provide some confidence to buyers to act soon,” adds Baird.
Nationally, median Days to Sell increased by one day, from 48 to 49 days, compared to a year ago. For New Zealand, excluding Auckland, median Days to Sell had no change year-on- year (49 days). Eight regions had fewer Days to Sell in July 2024 than in July 2023. Manawatu/Whanganui had the highest median Days to Sell at 63 days, a one-day increase compared to a year ago.
The HPI for New Zealand stood at 3,563 in July 2024, a 0.2% increase from July 2023 and down by 0.3% compared to June 2024. The average annual growth in the New Zealand HPI over the past five years has been 5.2% per annum, and it is currently 16.7% below the market peak reached in 2021. Otago is
Source: REINZ Monthly Property Report 20 August 2024.
the top-ranked HPI year-on-year movement this month, reaching a new peak at 4,187.
“In July, we saw an increase in sales across the country compared to last year and June 2024. As more listings hit the well-supplied market, buyers are slower to make decisions, extending the average Days to Sell. Despite ongoing economic challenges, early signs suggest potential improvement, indicating favourable conditions in the residential property landscape might be on the horizon.” adds Baird.
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U ND er S tANDING
t H e CU rre N t FINANCIAL m A r K et IN NEW ZEALAND
BY JULIUS CAPILITAN C21 FINANCIAL
There might be just over six weeks till the end of the year, but there’s only about one or two weeks left for new listings to come on the market. No matter whether you’re a buyer or a seller you’ll need to get your skates on if you want something to happen this year.
The Reserve Bank of New Zealand (RBNZ) recently lowered the Official Cash Rate (OCR) by 0.25%. For those unfamiliar, the OCR is the benchmark interest rate that influences the cost of borrowing from banks and the returns on savings. By reducing the OCR, the RBNZ is making borrowing more affordable, aiming to stimulate spending and investment, which are crucial in our current economic climate.
Over the past few months, inflation – the rate at which prices increase – has started to ease. This shift led the RBNZ to adjust its strategy, recognising that the economy might have slipped into a mild recession around the middle of this year, with the potential for a more severe downturn than initially anticipated. As the economy slows, "spare capacity" grows, meaning that resources like labour and capital are underutilised, which should help
keep inflation under control moving forward.
Looking ahead, it’s likely that the RBNZ will continue to reduce the OCR by 0.25% at each meeting until it reaches a more neutral level – somewhere around 3.25% by late 2025. However, the pace of these cuts will depend on how quickly inflation continues to fall. If inflation drops faster than anticipated, larger cuts could be considered, although the RBNZ has already accounted for a weaker economic environment in the short term.
For those with loans or considering borrowing, this is positive news as lending rates (the interest paid) are likely to continue dropping. However, returns on savings might decrease as well
The RBNZ is carefully balancing its approach to ensure inflation remains close to its target of 2%.
Continued from previous
Growth forecasts have been revised downward, predicting slower growth or even a mild recession later this year. Unemployment is expected to rise slightly, peaking at about 5.4% by mid-2025. However, there is optimism that inflation will stabilise, with annual inflation likely to drop to around 2.3% by the second half of 2024.
LOOKING AHEAD
The key question moving forward is how far and how fast the OCR will drop. While the financial
markets might speculate on larger cuts, it seems more likely that the RBNZ will stick to 0.25% cuts at each meeting unless economic conditions deteriorate significantly. For now, the focus remains on reducing borrowing costs, making this a potentially good time for new financial ventures, although savers should be mindful of decreasing returns.
FINAL THOUGHTS
At Century 21 Financial, we understand this market deeply and are here to guide you, whether
you’re buying, selling, or simply seeking the right information to make sound financial decisions.
As a residential and commercial finance broker, my expertise lies in helping you navigate these economic conditions to grow your wealth or effectively manage your financial future. In these times of change, making informed choices is more crucial than ever, and I’m committed to providing the guidance you need to achieve your goals.
C ONSID er ING
W HAT WILL HAPPEN TO PROPERTY AFTER FREEDOM DAY?
A m OV e tO A ret I reme N t HO me IN NEW ZEALAND
BY JEAN JOHNSON, C21 JEAN JOHNSON
As the population of New Zealand continues to age, many individuals are contemplating the benefits of moving to a retirement home. This decision, often prompted by the desire for a simpler, more secure lifestyle, requires careful thought and discussion with family and friends.
Retirement homes in New Zealand typically cater to those aged 65 and over, offering a range of living arrangements from brand new units to well-established cottages set in beautifully maintained grounds. One of the primary attractions of retirement living is the freedom it provides. Residents can enjoy their golden years without the burden of home maintenance, which is particularly appealing in a country known for its temperamental weather and lush, green landscapes.
ADVANTAGES OF RETIREMENT HOME LIVING
1. Downsizing for Simplicity:
As we age, the maintenance of a large home can become overwhelming. Downsizing to a retirement home means less space to manage and more time to enjoy the activities you love.
2. Community and Social Connections: Living in a retirement village offers the chance to be part of a community of like-minded
individuals. Regular social gatherings and activities are common, providing opportunities for new friendships and a supportive network. These social connections are essential for mental health and cognitive function, which is crucial for maintaining a high quality of life.
3. Safety and Security:
For many, security is a top priority. Retirement villages often have enhanced security measures, giving residents and their families peace of mind. This sense of safety can be particularly reassuring in New Zealand, where residents value their independence and outdoor lifestyle.
4. Maintenance-Free Living:
One of the significant advantages of moving to a retirement home is that exterior maintenance is taken care of. This includes gardening, repairs, and general
upkeep, freeing up time and reducing stress. In a country where outdoor activities and exploring nature are beloved pastimes, this benefit allows residents to spend more time enjoying New Zealand’s natural beauty.
5. Improved Lifestyle and Health: Retirement villages are designed to support an active and fulfilling lifestyle. Many have facilities like gyms, swimming pools, and communal gardens. Engaging in these activities can lead to better physical health and increased happiness.
THE FINANCIAL ASPECT
It’s important to understand that moving to a retirement home in New Zealand often involves a Licence to Occupy agreement, which means there is no capital gain on the property. This financial arrangement can be a consideration for those looking to leave a legacy for their family. However, the
trade-off is the security and peace of mind that comes with knowing you have a place to live for the rest of your life.
CONCLUSION
The decision to move to a retirement home is significant and personal. For many New Zealanders, the benefits of downsizing, enhanced security, and the opportunity for social connections make this an appealing option. Discussing these points with family and friends can help ensure that the move is a positive step towards a happy and secure future. In a country that values community and quality of life, retirement homes offer a viable solution for those looking to enjoy their later years with peace of mind.
H OW tO b OOS t YOUR PROPERTY’S S treet A ppe AL
It is often said that it’s “what’s on the inside that counts” but when it comes to selling your home the exterior appearance can play a crucial role. First impressions are powerful and enhancing the home’s street appeal can make a significant impact on potential buyers and the final sale price. Street appeal is the immediate visual attraction of a home from the footpath, and it’s essential for drawing in buyers when they view the home for the first time, encouraging them to explore further.
Achieving better street appeal doesn’t require a massive budget or extensive renovations either. There are some simple and relatively affordable updates that can make a major difference. Here are 10 expert tips to transform your home’s exterior from lacklustre to impressive!
1. REFRESH YOUR FACADE
A clean and well maintained exterior suggests a well–cared for home inside. If the front of your home is looking worn and outdated, a fresh coat of paint can make a dramatic impact and rejuvenate its appearance. Dated finishes, cracked siding and peeling paint can diminish your home's value. Remember to use paint that is suitable for exterior use!
2. REVAMP THE FRONT DOOR
The front door is a focal point and sets the tone for the entire house.
A new colour or replacement door can drastically alter its appearance. Choose a bold colour for a contemporary look or a more classic shade to complement a traditional facade. Appealing doors can often lead to a better sales outcome with more interest and better competition between buyers.
3. UPGRADE YOUR HARDWARE
Once you’ve painted your front door, don’t forget to update its hardware. New handles, mailboxes and house numbers can add a touch of sophistication. Buyers are often subconsciously influenced by the overall sensory experience. This is a budget friendly way to enhance curb appeal and matching elements can make your home appear more polished and cohesive.
4. CLEAR THE CLUTTER
A messy front verandah or garden can make your home look neglected
and create a sense of chaos in the potential buyer’s mind. Removing clutter is an easy way to instantly improve its appearance and create a welcoming atmosphere. A buyer will be able to better visualise themselves in that house.
5. CLEAN THE WINDOWS
As simple as it may sound, dirty and cobweb–covered windows can detract from your home’s appeal.
A thorough cleaning, along with repainting worn–out frames and removing old curtains, can make your home look more inviting. This also allows more natural light to enter and make the home bright and airy.
6. DO A SPRING CLEAN
Regardless of the season, a thorough cleaning can enhance street appeal. Power washing, tidying up and trimming overgrown areas can make a big difference.
Pulling weeds and trimming hedges shows that you have maintained the property and land well.
7. BEAUTIFY YOUR LAWN
An overgrown or neglected front yard can give a poor impression. Regular maintenance, including mowing and fertilising is crucial.
A well maintained lawn significantly enhances street appeal and you can consider adding landscaping borders for a neat look. If grass doesn’t thrive in your area you can use high quality artificial turf as a low–maintenance alternative.
8. ADD POTTED PLANTS
Even if you lack a front yard, potted plants or window boxes can add
charm to your home’s exterior. Neat planters and well–chosen plants bring life and character to the facade. Plants are excellent for boosting positive energy and adding colour. They symbolise growth and renewal which are appealing to buyers.
9. UPDATE YOUR LIGHTING
Elegant outd oor lighting can highlight your home’s best features and improve both security and ambiance. Proper lighting enhances the beauty and functionality of outdoor space. Consider adding path lights, floodlights or spotlights to accentuate your home’s features. LED or solar –powered lights are energy –efficient options.
10. ENHANCE YOUR PATHS
If your pathways are stained or cracked, addressing this can improve street appeal. Pressure washing or covering paths with gravel can provide a quick fix. Maintaining pathways by replacing broken paver’s or upgrading to higher quality materials can add a touch of sophistication and appeal to buyers. By implementing these straightforward and cost–effective improvements, you can significantly enhance your home’s street appeal and attract potential buyers more effectively.
