WELCOME TO THE November 2024
PU b LISH er
Century 21 New Zealand Ltd
C o NT r I b UT or S
Jen Baird
Julius Capilitan Corelogic NZ 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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S P r ING SAL e S
SU r G e A ro UND
TH e C o UNT rY
BY JEN BAIRD, REINZ CEO
Spring has officially arrived and has brought a wave of positivity and optimism to New Zealand’s property market, the latest figures from the Real Estate Institute of New Zealand (REINZ) reveal.
As we recover from a subdued market, October proved to be a more positive month, with increases in sales and ever so slight increases in median prices.
“THERE SEEMS TO BE LIGHT AT THE END OF THE TUNNEL. ALTHOUGH CHALLENGES LIKE THE COST OF LIVING REMAIN, POSITIVE SIGNS ARE EMERGING. FALLING INTEREST RATES, INCREASED INVENTORY IN THE MARKET, AND GREATER ACTIVITY DURING OPEN HOME EVENTS ARE ALL REFLECTED IN THE DATA FOR OCTOBER, ” EXPLAINS CHIEF EXECUTIVE JEN BAIRD.
On the sales front, total properties sold nationally increased by 20.0% compared to October 2023.
Sales for New Zealand, excluding Auckland, rose 22.7% year-on-year, with notable increases in Nelson (+112.8%) and Marlborough (+29.5%).
“Salespeople are seeing more confidence among vendors and
buyers now we’re into spring, and this shows signs of a busier market leading up to Christmas,” adds Baird.
The national median price increased by 0.7% year-on-year, from $789,500 to $795,000; month-on-month, it increased by 1.9%, from $780,000. Excluding Auckland, the median price rose 2.9% year-on-year from $690,000 to $710,000 and increased 2.2% from $695,000 compared to October 2024.
Regionally, ten out of sixteen areas reported an increase in median prices over the past year, with Marlborough leading at an impressive 18.3% increase to $769,000. The West Coast followed closely with a 14.7% rise year-on-year to $390,000. Month-on-month changes also revealed significant increases in Marlborough (10.6% from $695,000) and Manawatu - Whanganui (10.0% to $550,000).
“The New Zealand property market is experiencing a dynamic shift. While median prices are gradually catching up, local salespeople note
that so me buyers remain cautious about overpaying for properties due to relatively high interest rates. This environment encourages buyers to be more strategic in their approach, making them feel confident in negotiating with vendors to reach an agreeable price,” adds Baird.
New listings also surged, continuing the trend since the beginning of 2024, with every month this year showing a higher number of listings than the same month in 2023. Thirteen out of fifteen regions reported increases compared to last year.
The two regions that didn’t were Southland and Northland, which both had a 0.0% change year-on-year. The regions that experienced the highest rise of listings were Gisborne (+103.6%), Canterbury (+40.6%), and West Coast (+40.0%).
Overall, listings nationally increased by 21.4% to 11,572, and New Zealand (excluding Auckland) increased by 22.2% year-on-year to 7,469.
ANNUAL MEDIAN PRICE CHANGES
Inventory levels are also climbing; national inventory grew by 26.3% year-on-year and 7.7% month-on-month to reach 32,339 properties available for sale.
Baird notes that the increase in available properties provides buyers with the opportunity to explore a diverse range of options that better align with their individual needs and preferences, allowing them to take their time shopping around.
In October, there were 1,191 auctions nationally (17.8% of all sales), an increase from 899 (16.1%). The national median days to sell rose by four to 42 days compared to last year; excluding Auckland, it increased from 39
days in October 2023 to 43 days this month.
The House Price Index (HPI) for New Zealand stood at 3,616-a decrease of 1.1% year-on-year but an increase of 0.5% monthonmonth. Over the past five years, the average annual growth rate for New Zealand’s HPI has been approximately 4.8%, although it currently sits at 15.4% below its peak in 2021.
Click here to read the full report
Source: REINZ Monthly Property Report 15 November 2024.
C H oo SING KITCH e N CA b IN e TS
Choosing your kitchen cabinets is a key decision when designing or renovating your kitchen. Cabinets set the tone for the space, both functionally and aesthetically. Here’s a step-by-step guide to help you choose the right kitchen cabinets:
1. SET YOUR bUDGET
Kitchen cabinets can vary widely in price, depending on the material, style, brand and customisation. Setting a budget early will help narrow down your choices and guide you in making practical decisions. Consider the following:
Pre-made cabinets (standard sizes) are generally the most affordable.
Semi-custom cabinets allow for more flexibility in terms of size and style.
Custom cabinets are tailored to your space and style preferences but come with the highest price tag.
2. DETERMINE YOUR KITCHEN’S LAYOUT
Think about the functionality of your kitchen and what type of storage you need. Do you need more drawer space? Do you want upper cabinets or open shelving? Do you own a lot of heavy pots and pans or have beautiful glassware that you want to put on display?
Some standard layout styles include:
Galley: Two parallel walls, often best with simple, straight cabinetry.
L-Shaped: Cabinets on two adjacent walls, with corner storage solutions.
U-Shaped: Cabinets wrap around three walls for maximum storage.
Island Layout: Adds central cabinet storage for food prep or extra seating.
3. CHOOSE THE CAbINET MATERIAL
The material of the cabinet will influence both its durability and appearance.
Solid Wood (e.g., oak, maple, cherry): Offers high quality and is highly customisable, but it can be expensive .
Plywoo d: M ore durable than particleboard, but still more affordable than solid wood.
MDF (Medium-Density Fiberboard): Smooth surface ideal for painted finishes, but less durable than wood.
Particleboard: Often used in budget-friendly, mass-produced cabinets, but less durable.
Laminate: Affordable, easy to clean and available in many colours and patterns, but not as durable as wood.
4. CHOOSE THE CAbINET STYLE
Cabinet style contributes to the overall aesthetic of your kitchen. Common cabinet styles include:
Shaker : A simple, clean, and classic style with a recessed panel.
Traditional: Features more intricate details, like raised panels and ornate moulding.
Modern/Contemporary: Sleek, with flat panels and minimal detailing.
Transitional: A blend of traditional and modern elements.
Rustic/Farmhouse: Features natural wood finishes and distressed detailin g.
Image: R Architecture on Unsplash
5. DECIDE ON CAbINET FINISH
The finish you choose will impact the kitchen's look and how easy the cabinets are to maintain.
Painted Finish: Provides a smooth, uniform colour and modern look.
Stained Finish: Shows off the wood grain and provides a more classic, natural look.
Glazed Finish: Adds depth and character with a hint of colour applied over the base coat.
Matte, Satin or Glossy: Consider your preference for sheen and how it will affect cleaning and durability.
6.
CONSIDER STORAGE FEATURES
Think about how you want your kitchen to function. Incorporating smart storage solutions can maximise your space:
Pull-out shelves: Makes items in deep cabinets easier to access.
Lazy Susans: Ideal for corner cabinets to make use of hard-to-reach spaces.
Soft-close doors/drawers: Reduce wear and tear and provide a quieter, more refined opening/ closing experience.
Pull-out and recycling bins: Keeps waste neatly tucked away.
Spice racks, tray dividers and built-in organisers: These add convenience and keep everything in its place.
7. CHOOSE CAbINET
HARDWARE
Hardware can make a big difference in the overall look of your cabinets. Some options include:
Handles: Long, sleek handles are popular in modern kitchens, while ornate handles fit more traditional designs.
Knobs: Smaller and simple, they work well with many cabinet styles.
Finish: Choose finishes that complement your cabinet colour and overall kitchen aesthetic – brushed nickel, matte black, brass and chrome are popular choices.
Handless: Handle less kitchen cabinets are a common trend in modern kitchen design and create a sleek aesthetic with practical functionality. These are generally more expensive.
8.
CONSIDER CAbINET COLOUR
The colour of your cabinets will set the tone for your kitchen. Here are a few ideas:
White: Classic, clean and brightens up smaller s paces.
Grey: Modern and neutral, pairs well with almost any accent colour.
Blue: Adds a bit of bold colour without being too overwhelming.
Wood Tones: Rich, natural wood can add warmth, and works well in traditional or rustic kitchens.
Black : Sophisticated and dramatic, works well in modern or contempora ry designs.
9. THINK AbOUT LIGHTING
Consider how your cabinets will look under different lighting conditions. If you have under-cabinet lighting, it will illuminate the lower part of your cabinets, so choose materials that reflect light or allow it to shine through. Light-coloured cabinets work well in this scenario, but some darker finishes (like matte black or navy) can look stunning with the right lighting.
10. GET EXPERT HELP
If you're unsure about what will work best for your kitchen, consult with a kitchen designer or a contractor. They can help you make informed decisions based on your space, needs and budget.
11. ORDER SAMPLES OR vISIT SHOWROOMS
It's always a good idea to get a sample or visit a showroom to see the materials, finishes, and hardware in person. This allows you to better visualise how the cabinets will look in your space.
By considering these factors, you can choose kitchen cabinets that will both elevate the style of your kitchen and provide the functionality you need for cooking and storage. And lastly, don’t forget to enjoy the process!
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S H o ULD Yo U bre AK
Yo U r mor TGAG e AND re FIX o N A
SH or T er r AT e ?
As interest rates fall in response to the Reserve Bank of New Zealand’s recent OCR cut, many Kiwis are considering whether it’s worth breaking their fixed-term mortgage to refix on a lower rate. But is it really a good financial decision? Here’s what to consider.
WHY WOULD YOU CONSIDER bREAKING YOUR FIXED MORTGAGE?
With interest rates dropping, homeowners might think it’s a good idea to break their fixed-rate mortgage early to lock in a lower rate. This could potentially reduce monthly repayments or allow extra payments towards the principal. However, breaking a fixed term comes with a “break fee,” which compensates the bank for the interest income they would have earned if the loan had stayed at the original rate.
WHAT ARE bREAK FEES?
In New Zealand, banks generally base break fees on the interest they lose out on when a fixed-rate mortgage is broken. Although banks don’t publicly disclose the precise
BY JULIUS CAPILITAN
calculation, the fee usually depends on factors like:
• The difference between your fixed rate and the current market rate
• The remaining term of your mortgage
• The outstanding loan balance For example, the greater the rate difference and remaining term, the higher the fee. It’s essential to consult your bank or mortgage broker to estimate the cost of breaking your mortgag e.
CURRENT MARKET CONDITIONS:
WHY NOW?
According to recent market insights, the RBNZ's latest OCR reduction of 50 basis points has prompted nearly all major banks to drop their mortgage interest rates by approximately 0.50%. This means there are competitive, shorter-term fixed rates available right now, making it tempting for borrowers to break their existing fixed-rate mortgages to secure these lower rates.
However, experts expect further OCR cuts over the next 6-12 months. Locking in a new fixed rate now might mean missing out on even lower rates in the near future, especially if the OCR continues to drop as predicted. As a result, it’s essential to weigh the potential
savings from breaking your mortgage now against the possibility of even more favourable rates in the next few months.
SHOULD YOU bREAK AND REFIX ON A SHORTER RATE?
If you’re considering breaking your mortgage, we recommend consulting with a mortgage broker or financial advisor to evaluate the costs and benefits based on your unique situation.
NEXT STEPS
At Century 21 Financial, we specialise in helping clients make informed decisions that align with the latest market conditions. Julius says: “If you’re thinking of taking advantage of lower rates, let’s work together to make sure it’s a decision that benefits you long-term. We handle all the calculations and research, so you can focus on what matters most.”
Whether you’re looking to refinance, shorten your loan term, or simply explore your options, our team is here to guide you every step of the way. Reach out to us today for personalised advice tailored to your goals.
E: julius.capilitan@century21.co.nz
P: 027 2777 352
m ore P ro P er TY
S e LL er S FAC e
L o SS e S A m IDST
AK m A r K e T
New Zealand’s property market remains subdued, with a rising share of sellers incurring losses amid higher listing volumes, falling house prices, and persistent economic challenges.
CoreLogic NZ’s latest Pain & Gain report for Q3 2024 shows the proportion of properties being resold for more than the original purchase price was 90.2%, down from 91.8% in Q2 2024.
Conversely, the proportion of loss-making resales climbed to 9.8% in the September quarter, the highest level since Q2 2015, up from 8.2% in the previous quarter.
CoreLogic NZ Chief Property Economist Kelvin Davidson said that while most sellers are still making a profit, the balance has shifted in favour of buyers, giving them more leverage in price negotiations.
“These figures reflect a changing market, with buyers now holding the upper hand as challenges persist,” Mr Davidson said.
“This follows a prolonged decline since the extended peak in 2021, when 99% of resales were profitable. Given the recent weakness in the wider housing market, it’s not surprising that both the frequency of profitable resales and the size of the gains have decreased.”
The median resale profit fell to $269,000 in Q3, down sharply from $305,000 in the previous quarter. Mr Davidson said this is a significant drop from the highs seen during the post-COVID housing boom when the median profit peaked at $440,000 i n late 202 1.
HOLD PERIODS HIGHLIGHT MARKET vOLATILITY
Hold period s remain a critical factor in determining profitability with properties sold for a gain in Q3 2024 having a median hold period of 8.5 years, compared to those resold at a loss, which were typically held for 2.9 years.
Mr Davidson said the longer hold periods for profitable sales reflect the cautious approach many sellers have adopted in response to recent market softness.
“Hold period is key. Even with the softer market conditions of the past 18 months, property owners who have held their properties for eight to nine years are still likely to make a gross profit,” he sa id.
“While median resale profits are still significant, especially for long-term owners, most owner-occupiers won’t see a cash windfall. Instead, the new equity will typically be rolled into their next purchase-unless they’re downsizing or moving to a less expensive area.”
INvESTOR PRESSURE MOUNTS AS LOSSES RISE
The proportion of investors selling for a loss climbed to 11.1% in Q3, up from 8.5% in Q2 and the highest level in a decade. In comparison, owner-occupier loss-making resales rose to 8.8%, highlighting a slightly widening gap between the two groups.
“Investors appear to be feeling the pinch a little more acutely, likely driven by cashflow challenges and possibly a reduced appetite to sustain loss-making properties,” Mr Davidson said.
“While we’re not seeing a widespread exit from the market, the rise in investor losses suggests
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cash flow may be an issue for multiple property owners and some may be opting to cut their losses rather than continue to subsidise under performing assets, particularly with still elevated mortgage rates.”
APARTMENT SECTOR STRUGGLES CONTINUE
The performance gap between apartments and standalone houses remained high in Q3, with 35% of apartment resales incurring a loss, compared to 8.9% for houses.
“Investors typically favour apartments for their yield potential, but these properties can also be more susceptible to market fluctuations,” he said.
“While losses are more common in apartment resales, there’s no sign of fire-sale pricing. Instead, many investors appear to be reassessing their portfolios and, in some cases, choosing to absorb losses to focus on better-performing assets.”
REGIONAL DISPARITIES PERSIST
Resale figures across the main centres presented a mixed picture in Q3 2024, with some cities experiencing a rising share of losses, while others saw fewer resales made at a loss or even a slight decline.
Auckland recorded the highest proportion of loss-making sales among the main centres, increasing to 16.1%, up from 12.9% in Q2 2024. Wellington also saw a significant rise in loss-making sales, reaching 9.9%.
Hamilton’s property resale performance also remained relatively soft in Q3 at 10.6%
however the figure was a slight improvement on Q2’s result of 11.1%.
Queenstown continued to outperform, with only 2.5% of resales made at a loss, and also a substantial median profit at $464,500.
RECOvERY OUTLOOK HINGES ON INTEREST RATES
While the current conditions remained challenging for sellers, falling mortgage rates and a stabilising economy could support a shift back in favour of homeowners in 2025, Mr Davidson said.
CoreLogic’s Home Value Index showed a decline of -0.5% in October, marking the eighth consecutive monthly drop. Property values have now fallen by -5.1% since February, leaving current values at $805,984.
Despite a slower pace of decline in recent months, a sharp recovery remains unlikely, given the ongoing challenges of housing affordability, high stock levels, and a weak labour market continuing to have an impact, Mr Davidson said.
“A modest upturn in sales and values is possible over the next 12 to 18 months as lower mortgage rates boost confidence,” he said.
“However, any growth in resale profits is expected to be limited until broader economic conditions and buyer confidence significantly improve.”
Click here to read the full article
