C21 Market Pulse | November 2022 | New Zealand

TO THE November 2022 ISSUE OF C21 m ArKeT PULSe

PU b LISH er

Century 21 New Zealand Ltd

C o NT r I b UT or S

Tim Kearins

Jen Baird Cameron Brewer

e DIT or IAL e NQUI r I e S

Century 21 New Zealand +64 9414 6041

AD ver TISING e NQUI r I e S Century 21 New Zealand +64 9414 6041

DISCLAI mer

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b UY er INT ere ST INC re AS e S, b UT

N oT re FL e CT e D IN MARKET ACTIVITY

BY JEN BAIRD, REINZ CEO

While October sees an increase in enquiry and open home attendance in some regions, rising interest rates have caused hesitancy amongst buyers across Aotearoa New Zealand. The national median price showed improvement on September. Still, prices continue to ease, sales activity remains down and properties are taking longer to sell than in October 2021, according to the latest data and insights from the Real Estate Institute of New Zealand (REINZ), home of the most complete, accurate and up-to-date real estate data in New Zealand.

Across New Zealand, median prices for residential property (excluding sections) decreased 7.5% annually, from $892,000 in October 2021 to $825,000 in October 2022. Month-on-month, this represents a 1.9% increase from $810,000 in September.

The median residential property price for New Zealand excluding Auckland, decreased 3.4% – from $750,500 to $725,000. There was a month-on-month increase of 1.5% from $714,000 in September.

Four regions had an annual increase in median price in October 2022, and the Marlborough region reached a record median price – up 20.7% to $781,000.

Auckland’s median price decreased 12.7% compared to October last year, from $1,249,000 to $1,090,000. The region has recorded six consecutive months of annual median price decreases for the first

time since August 2008 to January 2009. All seven Auckland districts had negative annual median price movements; North Shore had the greatest decrease, down 18.2%, followed by Papakura, down 17.3%.

In Wellington, the median price was down 17.2% annually, from $1,000,000 to $828,000 in October 2022. Wellington has recorded five consecutive months of year-on-year median price decreases – the first time since May to September 2011. All eight Territorial Authorities (TAs) had negative annual median price movements, with South Wairarapa seeing the greatest decrease, down 33.7%, followed by Carterton, down 26.5%.

Two TAs achieved record median prices; Marlborough District reached a median price record of $781,000, and Invercargill City reached a record $485,000. More information on activity by region

can be found in the regional commentaries.

Jen Baird, Chief Executive at REINZ, comments: “In October 2021, increased optimism over the easing of lockdown restrictions in Auckland combined with a delay to the introduction of changes to the Credit Contracts and Consumer Finance Act (CCCFA) from October to December impacted market activity. Able to transact and keen to move before tougher lending restrictions were implemented, people come to market hard and fast, contributing to a sense of urgency that is reflected in REINZ property data for October last year and is apparent in our annual comparisons.”

“In October 2022, the national median price decreased 7.5% compared to the same period last year. Four regions bucked the trend – with Marlborough reaching a record median price. It

is worth noting while the region’s location and size mean it can be less affected by some market headwinds, the median price is more subject to variability than bigger regions due to the smaller volume of transactions. For example, in September, the region recorded its lowest median price since August 2021; this month, it hit a record high. Time will tell if this high is the new normal or an anomaly due to a relatively small number of sales.

“This year, several compounding factors have created uncertainty and hesitancy in the market where there was confidence and urgency last year – rising interest rates and the cost of living, tax legislation

and property regulation, tightened lending criteria, and global events with macro-economic impacts.

“We see downward pressure on prices, and the pace of the market has come down. However, over the last couple of months, salespeople have observed an increase in enquiries and a noticeable increase in the number of first home buyers back in the market,” Baird observes.

Click here to read the full report

S H o ULD G ov T boo ST over S e AS INT ere ST IN P ro P er TY?

BY TIM KEARINS, CENTURY 21 NEW ZEALAND

First home buyers are increasingly present in the market. However, following rises in mortgage interest rates they too are slowing, with investors also stepping back. To help sliding property values, perhaps it’s time to widen the net.

My observations follow the release November’s REINZ & Tony Alexander Real Estate Survey.

Notably, the survey reported: ‘There is minimal interest in New Zealand property from people located offshore, with a net 39% of agents reporting reduced enquiries. People overseas lost interest in the New Zealand residential real estate market late in 2020 and remain disinterested.’

Let’s not forget that when the market was heating up, the Government limited investment to try to cool it. Now with a cooling market, is it time to reopen the doors to investment?

Immigration remains well down, and all non-residents remain banned from buying existing Kiwi homes. Maybe it’s time to carefully revisit the 2018 foreign buyer ban? At least very strategically and for parts of the country really hurting.

With the likes of Queenstown and Rotorua battling, an injection of offshore investment in those property markets would make a real

difference. Other regions, or even types of housing stock, could also be made exempt from the Overseas Investment Amendment Act.

The reality is people overseas are now looking elsewhere for investment property. We know this because our foreign buyer enquiries through Century 21’s global website are well down this year.

With interest rates rising and consumer and business confidence sliding, domestic demand for housing will continue to weaken. Carefully filling any obvious gaps with targeted overseas investment would help to support and sustain New Zealand’s all-important property sector at this critical time.

Sadly, New Zealand has lost appeal for overseas investors and migrants despite the Reserve Bank’s assurances that our fi nancial system remains stable. Should the Government now dangle some carrots, identify, and attract the right foreign and human capital

to ensure Kiwi homeowners can weather the storm and protect their greatest asset?

Securing a good real estate agent and agency has never been more important. The contracting market has led to many real estate agents exiting the industry. In contrast, Century 21 continues to expand in New Zealand, with new offices now open in Northland’s Dargaville and Auckland’s Epsom.

www.century21.co.nz

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

N e W C e NTU rY 21 F r ANCHIS e F or AUCKLAND CITY

Century 21 has opened a new office on 505 Manukau Road in Epsom. The world’s best-known real estate company is now looking forward to making its mark in Auckland’s central suburbs and beyond.

As well as Epsom, Century 21 Excellence will service Greenlane, Remuera, Royal Oak, Mt Roskill, Hillsborough, Onehunga, Newmarket, Parnell, Ellerslie, Panmure, West Auckland, and the North Shore.

Franchise owner and principal Bhethnee Kaur is a multi-awardwinning real estate agent, with a 25-year professional career that’s stretched across several industries. She’s described as a businesswoman at heart and a people person by nature.

“As well as being a top agent, Bhethnee is a seasoned property investor and renovator who willingly shares her insights. She understands the diversity of the Auckland market and maintains an extensive catalogue of networks and resources which she fully utilises to her clients’ advantage. We’re thrilled she’s joined the Century 21 family,”

says Tim Kearins, Owner of Century 21 New Zealand.

A tenacious business development manager with over 20 years of sales experience, Kapil Chadha is chief operations officer. He has a Post-Graduate Diploma in Business specialising in Marketing from the University of Auckland and holds a Certifi cate in Real Estate. He also has a Bachelor of Arts and a Diploma in Advanced Software Technology.

"We’re proud to be flying the Century 21 flag in Epsom. Our small team is well qualified and experienced to get the job done. We are squarely focused on delivering exceptional personalised service, backed by Century 21’s superior brand, reputation, and resources,” says Ms Kaur.

As well as selling existing homes and new residential developments, Century 21 Excellence specialises in property management. Looking after investors and their properties, as well as matching the right tenants, is property manager Tim Meyer.

“Turning rent appraisals around in less than 24 hours, finding good tenants within hours, and finding an electrician to do a heat pump in less than a day are just some of Tim’s talents. He brings a lot of experience

ABOVE: Prakul Raj, Bhethnee Kaur, Tim Meyer, and Kapil Chadha from Century 21 Excellence.

and success, having previously looked after 300 properties and was awarded the most committed property manager,” says Ms Kaur.

Century 21 Excellence

administration of fi cer is Prakul Raj who is a property investor himself. He enjoys everything about real estate, including meeting and working with so many people of different cultures and backgrounds. Mr Kearins says Century 21’s superior service and global status will continue to attract other high performing businesspeople and salespeople to consider franchise ownership.

“Century 21 Excellence is a great addition to our brand here in New Zealand. They have got the work ethic, professionalism, people skills, and positive outlook to do very well on Manukau Road. While many other real estate companies are losing agents and offices, we’re thrilled Century 21 continues to expand in New Zealand,” says Mr Kearins.

www.excellence.century21.co.nz

Contact Bhethnee Kaur, Century 21 Excellence – (027) 808 4541

PAPAKU r A’S L o CAL re ALTY b UCKS THE TREND

Just three years old, Century 21 Local Realty has enjoyed enormous success since opening its doors on Broadway, Papakura. Despite a softening market this year, the high performing sales team is larger and going faster than ever before.

The South Auckland franchise continues to climb the real estate charts, winning several awards since opening. Titles include being repeatedly named a Top 21 of fi ce across Century 21 Australasia and Century 21 New Zealand’s Top Of fi ce.

“No sooner had Local Realty opened its doors in late 2019 and we were hit with Covid-19 and subsequent lockdowns. Their ongoing success despite the pandemic and now a challenging real estate environment is a credit to franchise owners Gary and Iresh and their whole team. Theirs is formula that other agencies should study closely,” says Tim Kearins, Owner of Century 21 New Zealand.

Joining forces and opting to adopt Century 21’s global brand and reputation, Local Realty owners Gary Bal and Iresh Tennakoon brought to the new franchise considerable success in real estate throughout the region’s southern suburbs and districts.

“Gary and Iresh had incredible business foresight to set up shop in

such a strategic part of Auckland, covering some of the region’s most critical residential growth areas as identified in Auckland’s Unitary Plan,” says Mr Kearins.

Over the past three years, many residential developments have come on stream in Papakura, Takanini, Karaka and Drury – and Local Realty has been front and centre of many of them.

Gary Bal says the Local Realty team has worked incredibly hard to better understand and connect with the different communities and the many residential developments underway or planned. New townhouses for first-home buyers seem to be a popular mix.

Famous for their social media blitzes and bus-back marketing, the Local Realty team prides itself on local knowledge and knowing what’s planned for the wider neighbourhood.

“Not only are they superior marketers, but they offer an incredibly personalised service with unparalleled knowledge of what’s happening on the ground.

It’s this kind of expertise, energy, and commitment which sees Local Realty continue to get a tonne of referral and return business,” says Mr Kearins.

Attracted by the positive traction and cut-through the refreshed Century 21 brand continues to gain in New Zealand. Local Realty’s arrival has without doubt strengthened Century 21 as a powerhouse in Auckland’s south.

“Despite other parts of the real estate industry slowing, we continue to enjoy enormous success particularly with townhouse developments and first-home buyers. Delivering unbeatable marketing and service to buyers and sellers alike is working a treat,” says Gary Bal.

www.papakura.century21.co.nz/

Contact Gary Bal, Owner of Century

21 Local Realty – (027) 604-0504

Iresh Tennakoon, Owner of Century 21 Local Reality – (027) 453-0333

W HAT Y o U N ee D To KN o W be F ore

b UYING A H ome To re N ovAT e

Fixer-uppers are tempting prospects. Such properties often let you buy into a desirable neighbourhood below typical market value. That’s because you’re not buying a typical house.

Before purchasing a home to renovate, you must think carefully. Ask yourself: Will this house be worth the work I put in? To fi nd your answer, follow these three steps.

1. ADD UP THE COST

First, consider everything that needs to be done to the home. Always assume that more work will be required, rather than less. Add up all the estimated costs for materials and labour. If you plan on doing some of the work yourself, factor in your own labour costs as well.

Seeking the services of a professional building inspector helps a lot during this step. Their

expertise and objective advice can ensure you’re not missing any issues, and therefore costs, hidden behind the walls or under the roof.

2. CALCULATE THE FINAL vALUE

Regardless of whether you plan to sell the house or live in it, you need to estimate what the finished value will be. Search for comparable listings that have sold in your area to get a rough idea of what you could expect. Alternatively, ask a Century 21 Real Estate agent for their opinion.

3. FIND THE DIFFERENCE

Finally, subtract the total estimated costs from the estimated final value. Subtract an extra 5-10% for unforeseen issues. The number you get should be the absolute upper limit of what you offer. Anything more, and what appears to be a great deal can easily turn into a money pit.

If that final number looks good to you, then that fixer-upper may be just what you’ve been looking for. Time to start planning your renovation.