C21 Market Pulse | March 2023 | New Zealand

C21

WELCOME TO THE March 2023

ISSUE OF c21 M arKET PULSE

PUBLIS h E r

Century 21 New Zealand Ltd

c ONT r IBUTO r S

Tim Kearins

Jen Baird

Cameron Brewer

EDITO r I a L ENQUI r IES

Century 21 New Zealand

+64 9414 6041

a DVE r TISING ENQUI r IES

Century 21 New Zealand

+64 9414 6041

DIS c L a IME r

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L OSS OF DEDU c TIBILITY h ITS r ENTa L M ar KET

BY TIM KEARINS, CENTURY 21 NEW ZEALAND

A recently released survey, commissioned by the Ministry of Housing and Urban Development, that found that a quarter of landlords put up rents in the six months before May 2022, and one of the big reasons for this was increased costs lumped on by the Government.

A key factor is that landlords are now not being able to claim their full interest costs as an expense. Alarmingly, that’s only going to get worse as interest rates increase and the policy rolls out to completion.

Once 100% of interest could be claimed by residential landlords, but that is now being incrementally phased out. Currently at 75%, that moves to 50% on 1 April, to 25% on 1 April 2024, and then to zero on 1 April 2025.

Banning interest deductibility really seems to be both hurting and deterring ‘mum and dad’ landlords. Many of these people once viewed a rental property as a good investment.

Now many of our ‘mum and dad’ investors are now either getting out of the residential rental market, or not considering it in the first place.

The ongoing costs on landlords is seeing them direct their money and focus towards the likes of commercial property syndications, the share market, or even bank term deposits given the rising returns.

Not only do extra costs see Kiwi landlords fleeing the residential

rental market, but it’s flowing through to rents, with overall rents reportedly up $150 in the past five years, only adding to our country’s cost-of-living crisis.

For a lucky few who might be able to get a deposit together to buy a house and secure finance, now is the time for renters to do their sums on lending affordability with some great opportunities out there for first-home buyers.

With rents still sky-high, but with house prices softening, flatmates will be looking at each other and wondering if they can cobble a deposit together and service a mortgage.

Likewise, couples and single people will be considering a boarder to help secure them a mortgage. While it’s not a good time to rent, it’s quite a good time to buy.

www.century21.co.nz

Contact Tim Kearins, Century 21 New Zealand – (0274) 495-547

The loss of tax deductibility on interest costs is having a negative impact on the rental market. A future government of any stripe must bring it back as soon as possible.

a c TIVITY r EM a INS SLOW, h OUSING STO c K LEVELS r ETU r N TO r EGUL ar LEVELS

BY JEN BAIRD, REINZ CEO

The Real Estate Institute of New Zealand’s (REINZ) February 2023 figures show a lesser rate of decline in annual median prices and sales counts, with stock levels returning to normal levels.

REINZ Chief Executive Jen Baird, says the impact of ongoing economic headwinds and Cyclone Gabrielle is reflected in the numbers, but some data in the housing market returns to ‘normal’ amidst a big clean-up job across the upper north and eastern North Island.

the weather and the anticipation of economic adjustments ahead, inventory levels are now showing a return to standard levels after a few years at historically low levels.

“When we looked at the trend over a ten-year period, we can definitely see the return to normal stock levels,” suggests Baird.

FEBRUARY TRADITIONALLY SHOWS A REASONABLE MONTH OF ACTIVITY BUT THE IMPACT OF EXTREME AND DEVASTATING WEATHER OVER THE START OF 2023 IS CERTAINLY SHOWING IN THE DATA WITH SALES AND LISTINGS SIGNIFICANTLY DOWN IN AFFECTED AREAS. WE MAY CONTINUE TO SEE THIS FOR SOME TIME IN PARTS OF NORTHLAND, AUCKLAND, TAIRĀWHITI GISBORNE, HAWKE’S BAY, COROMANDEL AND BAY OFPLENTY"

Auckland’s listings were down 36.9% from 4,365 to 2,755 year on year, and Tairāwhiti’s down 54.4% year-on-year from 68 to 31 new listings. Nationally, new listings decreased by 29.5%, from 11,545 listings in February 2022 to 8,143 listings in February 2023.

“Even though new listings are down as communities respond to

At the end of February, the total number of properties for sale across New Zealand was 29,083, up 5,813 properties (+25.0%) year-on-year, and up 4.9% from 27,732 monthon-month. New Zealand excluding Auckland was also up from 13,253 to 18,656, an increase of 5,403 properties (+40.8%). Month-onmonth, inventory was also up 4.9%

from 17,781 properties. This means there is plenty of choice for buyers in the market today.

The number of residential property sales across New Zealand eased annually by 31.1% from 5,750 in February 2022 to 3,964 February 2023. Month-on-month there was an increase of 40.4%.

Across New Zealand, median prices decreased by 13.9% year-on-year to $762,000. However, when comparing to January, the median sale price increased across most of the regions. Auckland saw a 7.0% increase, tipping back over the $1 million price point.

Median days to sell were at 60 days for February 2023 – up 18 days annually compared to February 2022 and had a small increase of 6 days from 54 when compared to January 2023.

“Our seasonally adjusted data shows that when compared to what is typically observed moving from the month of January to the month of February, all regions except Taranaki and Tasman

ANNUAL MEDIAN PRICE CHANGES

had smaller gains in sales count month-on-month than what would be expected. In other words, even though the sales count change from January to February looks significant, we would typically expect greater increases based on what has been observed historically.”

Rising interest rates, increased cost of living and inability to secure finance are still having an impact on buyers, but REINZ members are telling of returned activity at open homes in areas that weren’t as impacted by Cyclone Gabrielle,” add Baird.

The REINZ House Price Index (HPI) for New Zealand which measures

the changing value of residential property nationwide showed an annual decrease of 14.2% for New Zealand and a 12.3% decrease for New Zealand excluding Auckland. This is a small increase from last month, 0.1% and 0.3% respectively.

Click here to read the full report

Source: REINZ Monthly Property Report 14 March 2023 .

BAY

O FFI c I a L caS h raTE UP, BUT BO rr OWE r S haVE OPTIONS

“Kiwis borrowing to buy their first or next home still have plenty of options,” says Tim Kearins, Co-owner of Century 21 New Zealand.

His comments follow the Reserve Bank - for the first time in 2023 – lifting the Official Cash Rate on 22 February by 50 basis points, taking it to 4.75% - its highest level since 2008 when it reached 8.25%. RBNZ earlier forecasted a peak of 5.5% this year.

“Without doubt rising interest rates will put a lot of pressure on many homeowners this year. However, it’s important to remember the buck doesn’t stop with the big banks. Prospective buyers struggling to get finance, or a good rate, should ring a mortgage broker,” says Mr Kearins.

Often, he says, mortgage brokers can deliver more competitive rates

and greater borrowing flexibility than the traditional lenders.

This week REINZ released its Monthly Property Report for February. The latest figures showed that whilst the median number of days to sell a property was 60 - 18 days longer than in February 2022, residential property sales across New Zealand increased month-on-month by 40.4%.

Mr Kearins says the fact that the time it takes to sell has lengthened out somewhat is unsurprising as buyers are cautious – heightened by the recent weather disasters.

“The good news is more buyers are certainly starting to emerge, with agents reporting busier open homes. Likewise vendors are increasingly keen to meet the market as they know there’s a lot of stock on the market and this is likely to be a difficult winter,” he says.

The realtor says Century 21 Financial is a big point of difference and competitive advantage for Century 21 New Zealand in the local real estate market. Its Managing Director Julius Capilitan is getting busier, delivering great deals for C21NZ clients up and down the country. Historically, six or seven percent rates have been about the historical average for Kiwi borrowers, and that’s where most fixed rates with the major banks currently sit.

“While it’s far from ideal, it’s important we keep interest rates in perspective. For now, they’re not out of the ordinary, and let’s not forget borrowers can make up some ground with some great negotiation from their real estate agent,” says Mr Kearins.

www.century21.co.nz

T IPS FO r cr E aTING a WEL c OMING ENT r YWaY IN YOUR HOME

Creating a welcoming entryway in your home is essential to make a great first impression on your guests. Whether it's a small foyer or a grand hallway, the entryway sets the tone for the entire house. It is the first thing people see when they walk in, and it should be warm and inviting. Here are some tips to help you create a welcoming entryway in your home:

CHOOSE A WELCOMING COLOUR SCHEME

The colour scheme of your entryway sets the tone for your home. Neutral colours like beige, white, or grey can make the space feel clean and modern. If you're looking to create a warmth in your entryway, consider using rich, earthy tones such as deep reds, warm oranges, and golden yellows. These colours can evoke feelings of comfort and relaxation and make your guests feel instantly at home. Consider the style of your home and the overall look you want to achieve when choosing a colour scheme for your entryway.

ADD A WELCOMING RUG

A rug can help define the space and add warmth to your entryway. Choose a rug that complements your colour scheme and is the right size for your space. A rug with a bold pattern can also add interest and texture.

PROVIDE AMPLE LIGHTING

Lighting is crucial in any space, but it's especially important in your entryway. A well-lit entryway not only creates a welcoming atmosphere but also makes it easier for guests to navigate the space. Consider adding a statement light fixture, wall sconces, or table lamps to create a warm and inviting ambiance.

INCORPORATE SEATING

Incorporating seating into your entryway can add both function and style to the space. Not only does it provide a practical spot for guests to take off their shoes or set down their bags, but it also creates a welcoming atmosphere. A bench is a popular choice for an entryway as it provides a convenient spot to sit and is easy to move around. You might consider a bench with built-in storage to keep shoes organised. If you have a larger entryway, you might think about adding a pair of chairs or a small sofa to create a

cosy seating area. When choosing seating for your entryway, be sure to consider the overall style of the space and choose pieces that complement your decor. Upholstered chairs or a plush sofa can add a touch of luxury, while a rustic wooden bench can create a more casual and relaxed feel.

DISPLAY ARTWORK AND DECORATIVE ITEMS

Adding artwork or decorative items to your entryway can make it feel more personal and welcoming. Consider hanging a piece of art, displaying a vase of fresh flowers, or placing a decorative tray or bowl on a console table.

Creating a welcoming entryway in your home is all about creating a space that makes people feel comfortable and at home. With these tips, you can create a beautiful and inviting entryway that sets the tone for your entire home.

T ra NSFO r M YOU r Pa NT rY: a STEP BY STEP GUIDE

Are you tired of digging through piles of food items to find what you need in your pantry? Keeping your pantry organised can make a huge difference in the ease of meal prep and overall functionality of your kitchen. Here is our step by step guide to help you organise your pantry:

STEP 1: TAKE EVERYTHING OUT

The first step to organising your pantry is to empty it completely. This will allow you to see what you have and make it easier to sort and categorise everything.

STEP 2: CLEAN AND DECLUTTER

While your pantry is empty, take the opportunity to clean it thoroughly. Wipe down shelves and walls, and sweep or vacuum the floor. As you put items back in, take the time to declutter and get rid of anything that's expired or you know you won't use.

STEP 3. CATEGORISE ITEMS

As you start putting items back in, sort them into categories. This will make it easier to find what you need and keep everything organised. You can categorise items by type (e.g. canned goods, grains, snacks), by meal (e.g. breakfast, lunch, dinner), or by frequency of use (e.g. everyday items, special occasion items).

STEP 4. USE CONTAINERS AND LABELS

Using containers can help keep loose items together and make your pantry look neater. Use clear containers so you can see what's inside, and label them so you know what's in each container. This is especially helpful for items like pasta, rice, and cereal.

STEP 5. CONSIDER STORAGE SOLUTIONS

There are a variety of storage solutions available that can help you make the most of your pantry

space. For example, you can install additional shelves or hooks to maximise vertical space, or use a lazy Susan to make items in the back easier to reach.

STEP 6. KEEP IT TIDY

Once your pantry is organised, make sure you keep it that way. Take a few minutes each week to tidy up and put things back where they belong. This will make it easier to find what you need and help prevent clutter from building up.

By following these steps, you can create a pantry that is functional and easy to use. A well-organised pantry can save you time and stress in the kitchen, and help you make the most of the space you have available.