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P U L S E
F e b r u a r y
M A R K E T
C21
PUBLISHER Century 21 New Zealand Ltd
CONTRIBUTORS Jen Baird CoreLogic NZ
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WELCOME TO THE
February 2024 ISSUE OF
C21 MARKET PULSE
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C O N T E N T S F e b ruary
PROPERTY MARKET UPDATE
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PROPERTY INVESTMENT
Golden weather sees confidence lift
What are the most important factors to consider
CEO REINZ, Jen Baird
when purchasing an investment property?
SELLING PROPERTY
05
BUYING PROPERTY
Does styling your home when selling make a
First home buyer market share sets new record
difference?
CoreLogic NZ
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P R O P E R T Y M A R K E T U P DAT E
GOLDEN WEATHER SEES CONFIDENCE LIFT
BY J E N B A I R D, REINZ CEO
According to the Real Estate Institute of New Zealand (REINZ), January 2024 has seen slower sales and a significant increase in the number of property listings available. This shows confidence from sellers while warming up buyers with a greater choice of property to choose from. According to the Real Estate
including the bigger markets of Bay
year, including the cost of living,
Institute of New Zealand (REINZ),
of Plenty, Waikato, and Northland,
inflation, interest rate changes,
January 2024 has seen slower
had higher sales counts this January
and government reforms, mean
sales and a significant increase
compared to January 2023.
some buyers remain cautious.
in the number of property listings available. This shows confidence from sellers while warming up buyers with a greater choice of property to choose from.
The national median sale price has slightly decreased from December 2023, down 2.5% from $779,830 to $760,000. Year-on-year, there is a slight decrease in the national
However, most regions are reporting more buyer activity across the board, with some seeing a particular surge in first-home buyer interest. Vendors are also being confident but realistic with
"January is usually a slower month
median price by 0.7% from $765,000
for the completion of sales in
to $760,000, while New Zealand,
New Zealand and this year is no
excluding Auckland, is down by 2.1%
exception with 2,995 properties
month-on-month (from $700,000 to
being sold. While this is 4.9% more
$685,000) and up year-on-year by
than January 2023, the increase in
0.8% (from $680,000 to $685,000).
in the year,“ adds Baird.
listings is a stronger indicator that the
The data shows regional variation in
“With changes to the debt-to-income
market continues to pick up. Listings increased by 10.4% nationally and 5.4% for New Zealand, excluding Auckland, year-on-year. The biggest increases in listings compared with the previous month were seen in Wellington at 148%, followed by Gisborneat84%”,Canterburyat81%, and Auckland at 76.8%, says Baird. The total number of properties sold
median sale prices, with Northland topping the scale with a 21% increase
prices as activity increases over the summer months. This is likely to resolve in inventory moving over the coming more active months
ratios coming, REINZ data will be helpful indicators for buyers to see
month-on- month from $630,000
when to buy in a developing market.”
to $762,000, and a 10.8% increase
One area of significant change that
year- on-year from $687,500 to
has widespread support across the
$762,000. Meanwhile, Auckland’s median sale price has fallen under the $1 million mark again this month, for the fifth time in a year, to $975,000 – however this is still
property sector is the Residential Property Managers Bill. This regulation provides much-needed structure to a sector that collects rent from 670,000 tenants and manages billions
increased in January, rising by 16.0%
3.4% more than a year ago.
year-on-year for New Zealand,
“Despite the wave of listings favouring
Zealanders. As disincentives are
buyers, the challenges of last
removed, this is important regulation
excluding Auckland. Ten regions,
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of dollars in assets for everyday New
ANNUAL ME DIAN PRICE CHANGES
10.8%
3.4%
NORTHLAND
AUCKLAND
NATIONAL MEDIAN PRICE:
$760,000
BAY OF PLENTY
-1.4%
-0.7%
GISBORNE
-2.2%
TARANAKI
50
0.7%
-23.7%
WAIKATO
-2.0%
MEDIAN DAYS TO SELL:
2.2%
3.0%
MANAWATU / WANGANUI
HAWKE’S BAY
-0.7%
NELSON
11.2% -2.9%
WELLINGTON
2.5%
TASMAN
MARLBOROUGH
1.0%
WEST COAST
CANTERBURY
8.8%
2.2%
SOUTHLAND
OTAGO Source: REINZ Monthly Property Report 14 February 2024.
to monitor as it may change market
previous month and a 2.2% increase
activity, inviting investors back or to
for the same period last year.
refresh their portfolios, making more
The average annual growth in the
housing available for those who are
New Zealand HPI over the past five
not in the market,” comments Baird.”
years has been 6.0% per annum, and
“2024 is shaping up to deliver a series of changes and shifts in dynamics
it is currently 14.4% below the peak of the market in 2021.
for the market. The property sector is expecting the new government to make good on its promises to reduce the bright line back to two years and reintroduce interest deductibility on investment properties, changing
Click here to read the full report
the dynamics of the property market again.” The HPI for New Zealand, which stood at 3,660 in January 2024, showed a 0.4% increase compared to the C21 MARKET PULSE
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KNOW YOUR PROPERTY’S VALUE IN AN INSTANT Access an instant property report now. Click here to begin.
C21.co.nz/property-report/
SELLING PROPERTY
DOES STYLING YOUR HOME WHEN SELLING MAKE A DIFFERENCE? When putting your home on the market, it’s important to consider first impressions and audience appeal. This applies whether someone sees your listing in person, online or in print.
you stand out in a crowded market
period can be challenging.
and identify the latest trends.
Sentimental attachments to
So, what are some key things to consider? The extent to which your home is styled before putting it up for sale can vary depending on the stylist you’re working with. Some opt for minimal interventions, adding select
As some real estate agents say, ‘you
pieces to complement existing
are only fresh once’. Therefore it’s
furniture. Others will advocate for
always a good idea to show your
a complete overhaul to give the
property in the best light possible.
property a fresh look. It’s best to
It’s been found that investment in styling for a property brings in a 10 to 15% return over initial spend. It
collaborate with both the stylist and
inherited furniture or knick-knacks may cloud your objectivity. A stylist's role is to declutter, remove items as needed, and ensure each room showcases its best features. Styling costs depend on the home's size, location and value. Real estate agents should have a list of stylists they’ve worked with previously but an online search can help you identify a reputable stylist in your local area.
your real estate agent to ensure the
Quality photographs are crucial,
best result is achieved.
especially for listings featuring
may also sell quicker. A professional
Emotionally detaching from a home
with experience in styling helps
you've lived in for an extended
'fly‑through' or video tours. There are so many potential buyers researching properties in their chosen areas online so it's important to have everything in place to showcase the property to its maximum advantage. Empty spaces can sometimes look much smaller than those that have furniture in them, and rooms that are properly staged can look much bigger! The goal is to have an emotional pull on buyers who are coming to see your property. You want the buyer to feel good, just like when you walk into a beautiful hotel room or restaurant.
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PROPERTY INVESTMENT
WHAT ARE THE MOST IMPORTANT FACTORS TO CONSIDER WHEN PURCHASING AN INVESTMENT PROPERTY? Investing in real estate can be a great way to generate passive income and build wealth over time, but it's important to do your research and understand the market before making any investment decisions.
each year. Aim for a rental yield
best type of property for you
of at least 4-5% to ensure that you
will depend on your investment
are generating a positive return on
goals and budget. Houses are
your investment.
generally a good option for
• Capital growth potential:
investors who are looking for
Capital growth is the increase
capital growth and rental income,
in the value of your property
while apartments can be a good
over time. Choose a property
option for investors who are
with good capital growth
looking for a lower-maintenance
potential to maximise your
investment and a good rental yield.
return on investment. Factors Here we review some key factors
Commercial properties can be
to consider include the location
to consider when purchasing
a good option for investors who
of the property, the demand for
an investment property in
are looking for a higher rental
housing in the area, and the future
New Zealand:
yield, but they also come with
outlook for the New Zealand
• Location: The location of
property market.
your investment property is crucial. Choose a property in a desirable area with high rental demand and potential for capital growth. Consider factors such as proximity to amenities, employment opportunities, population growth trends, and future infrastructure development plans. • Rental yield: Rental yield is the percentage of your investment that you can expect to earn in rent
a higher level of risk. • Property condition: Choose an
• Affordability: Make sure that
investment property that is in
the investment property you
good condition and does not
choose is within your budget,
require any major repairs. This will
taking into account the purchase
help to minimise your ongoing
price, mortgage repayments,
maintenance costs and maximise
insurance, and other ongoing
your rental income.
costs. It's also important to have
• Tenant quality: Good tenants
a financial buffer in place to cover
are essential for a successful
unexpected expenses.
investment property. When
• Property type: There are
choosing a property, consider the
different types of investment
potential tenant pool. Look for
properties available, such
a property in an area with a good
as houses, apartments and
mix of tenants, such as families,
commercial properties. The
professionals and students.
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• Property management: If you do
income tax on your rental income,
your investment goals, you can
not plan to manage the property
land tax, and capital gains tax if
choose a property that is aligned
yourself, you will need to factor
you sell the property at a profit.
with them.
in the cost of hiring a property
Be sure to factor in these costs
manager. Property managers
when calculating your potential
can take care of tasks such as
return on investment.
finding and vetting tenants,
• Your investment goals: Consider
collecting rent, and dealing
your investment goals before
with maintenance issues.
purchasing an investment
• Taxes and other costs: There
property. Are you looking for
are a number of taxes and other
a short-term or long-term
costs associated with owning
investment? Do you want to
an investment property in
generate passive income or build
New Zealand. These include
capital growth? Once you know C21 MARKET PULSE
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By carefully considering all of these factors, you can increase your chances of making a successful investment.
BUYING PROPERY
FIRST HOME BUYER MARKET SHARE SETS NEW RECORD
BY CORELOGIC
Interest rate hikes and turbulent property market conditions through 2023 did little to deter first home buyers (FHB), whose market share hit a new record high at 27% in the final months of the year. Figures from the CoreLogic January
purchases has been higher in
the past month or two, so they're
Housing Chart Pack shows FHB
the past, but relative to other
definitely a buyer group to watch
activity hit 27% in December and
buyers they are still showing
as the market enters a new cycle.
in quarter four overall, taking their
some strength. FHBs accounted
total market share for 2023 to
for approximately 17,000 property
25.8%, well above the previous peak
purchases in 2023, up from 14,500
of 23.1% in the 2021 calendar year.
purchases in 2022.
CoreLogic NZ Chief Property
Mortgaged multiple property
and the prospect of caps on debt
Economist Kelvin Davidson said
owners (MPOs, including investors)
to income ratios later in the year.
FHBs may have been the biggest
had a quiet 2023 – with only about
As property tax changes kick in with
property market success story
14,000 purchases or 21% of activity,
deductibility restored to 80% from
of 2023.
both the lowest on record back
1st April, it will be interesting to see
to 2005.
how investors’ demand responds,"
"This is the first time FHBs have
Relocating owner-occupiers
groups," Mr Davidson said.
(movers) are also relatively quiet
for their relative resilience, but key factors include access to KiwiSaver
compared to past standards, with just 25% of activity over the fourth quarter of 2023.
to boost the deposit, a willingness
Mr Davidson said with loan to value
to compromise on location or
ratio restrictions still biting, gross
property type, the ability to tap the
rental yields low, mortgage rates
low deposit lending speed limits
high, and the interest deductibility
at the banks, and less competition
rules still against them, it’s not too
from other buyer groups,"
surprising that investors’ purchasing
Mr Davidson said.
activity has softened.
Despite hitting a record share
"That said, their market share
of purchases, the number of
has just started to edge higher in C21 MARKET PULSE
recovery is set to continue in 2024, but could be a little underwhelming, given still-high mortgage rates
ever out bought other buyer
"There are a number of reasons
"Looking ahead, the overall property
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he said.
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