WELCOME TO THE OctOber 2024
PU b LISH er
Century 21 New Zealand Ltd
c ON tr I b U t O r S
Jen Baird
Julius Capilitan Corelogic NZ
e DI t O r IAL e NQUI r I e S
Century 21 New Zealand +64 9414 6041
ADV ert ISING e NQUI r I e S
Century 21 New Zealand +64 9414 6041
DIS c LAIM er
We have in preparing this information used our best endeavours to ensure that the information contained therein is true and accurate, but accept no responsibility and disclaim all liability in respect of any errors, inaccuracies or misstatements contained herein. Prospective buyers and sellers should make their own enquiries to verify the information contained herein. All information contained in the CENTURY 21 New Zealand Ltd website is provided as a convenience to clients. All links to property prices displayed on the website are current at the time of issue, but may change at any time and are subject to availability.
For more information on our Privacy Policy please refer to: www.century21.co.nz/disclaimer
S OM e OP t IMISM ret U r NS tO N e W Z e ALAND’S P r OP ert Y MA r K et
BY JEN BAIRD, REINZ CEO
The Real Estate Institute of New Zealand (REINZ) September 2024 figures show additional signs of stability as spring began and confidence increased among both vendors and buyers.
According to REINZ Chief Executive Jen Baird, while the market remains subdued, there is a noticeable rise in positivity and confidence that things will continue to improve as we approach the end of the year. Despite lingering challenges such as the cost of living, many believe that the downward trend of interest rates will lead to a gradual recovery as we move into 2025.
After the Reserve Bank reduced the OCR rate by 50 basis points to 4.75%, the market is expected to see more activity from those who are ready to buy, reinforcing the optimism in the market, and this will likely be reflected in the coming months’ property reports,” adds Baird.
The national median price decreased 2.3% year-on-year, from $799,000 to $781,000, and increased 2.1% month-on-month from $765,000. For New Zealand, excluding Auckland, the median price decreased slightly by 0.7% year-on-year (only $5,000),
from $700,000 to $695,000. The median price increased by 2.2% compared to August 2024, up from $680,000.
The signs across the country are largely of stability with slight decreases year-on-year, and the median price increase of 2.1% compared to August a slight improvement. Even though we are seeing another year-on-year decrease, this is in line with what we expect this time of year so the market is doing what we would expect, another sign of stability,” said Baird.
In the past year, eight of the sixteen regions experienced a median price increase. Gisborne had the highest increase at 10.1% to $605,500, followed by the West Coast at 9.9% to $390,000. Additionally, median prices increased in twelve regions month-on-month, with significant changes in Southland (14.1% to $487,000) and Marlborough (9.7% to $680,000).
The total number of properties sold nationally decreased by 1.1% compared to September 2023, down from 5,881 to 5,816. Compared to August 2024, sales counts decreased by 3.3%, from 6,015 to 5,816.
However, sales in New Zealand, excluding Auckland, increased by 4.5% year-on-year. Seven regions saw sales rise year-on-year in September 2024. The most significant increases were in Hawke’s Bay (+26.3%) and Gisborne (+22.6%). Five regions saw an increase month-on-month.
In the regions, twelve of the fifteen have seen a rise in new listings compared to September 2023, with the most notable increases recorded in Gisborne (+50.0%), Wellington (+36.1%) and Otago (+34.1%). New Zealand, excluding Auckland, there was a 20.4% increase in listings year-on-year.
New Zealand’s national inventory level rose 27.4% year-on-year
ANNUAL MEDIAN PRICE CHANGES
and 1.5% month-on-month, reaching 30,028. Excluding Auckland, inventory increased by 27.8% year-on-year and 1.8% month-on-month, totalling 18,772. Baird notes that the continuous rise in inventory and listings gives buyers ample choice and time to find suitable properties.
“Local salespeople around the country have noted an increase in buyers attending open homes, more so than the usual spring lift we see each year. With some regions now seeing an uplift in sales (7 out of 16 regions), buyer engagement is improving, with listings receiving more enquiries. These trends could lead to a more robust market in the coming months, particularly if
expected improvements in market activity and reductions in interest rates eventuate,” added Baird.
In September, there were 737 auctions nationally (12.7% of all sales), down from 911 (15.5%) in September 2023. Auckland had 398 auctions (21.2% of sales), compared to 579 (27.4%) a year ago. The national median days to sell increased by nine days to 49, and excluding Auckland, it rose to 50 days. Notably, the West Coast saw a significant decrease in median days to sell, dropping by 28 days to 31.
The HPI for New Zealand stood at 3,600, a 0.4% decrease year-on-year and an increase of 1.0% month-on-month. The average annual growth in the New Zealand
Source: REINZ Monthly Property Report 15 October 2024.
HPI over the past five years has been 4.9% per annum, and it is currently 15.8% below the market peak reached in 2021. Southland remains the top-ranked region in September, with a 3.7% increase year-on-year.
Click here to read the full report
WANAKA
We can help you with your property journey.
W HAt LOW er
IN tere S t r Ate S
M e AN FO r YOU r MO rtGAG e AND SAVINGS IN NEW ZEALAND
BY JULIUS CAPILITAN
With the recent 50 basis point drop in the Official Cash Rate (OCR) announced last Wednesday, followed by major New Zealand banks lowering their interest rates by about 0.50%, many Kiwis are wondering how this will impact their personal finances – especially when it comes to mortgages and savings.
For most Kiwis, fixed-term mortgages are the preferred choice due to their stability and predictability. Julius says, "Locking in a fixed rate can be appealing now, especially with interest rates dropping. However, there’s something to consider – many experts are expecting further OCR cuts over the next six months. If you lock in a fixed rate now, you may miss out on even better rates down the line, which could save you more over the long-term period."
This creates an interesting dilemma for homeowners: Do you lock in a rate now to avoid future uncertainty, or wait for potentially lower rates? Julius adds, "It’s about balancing your immediate need for stability with the potential long-term savings from waiting for lower rates."
SHOULD YOU REFINANCE?
With banks dropping their interest rates, many Kiwis might be wondering if it’s a good time to refinance their home loan.
Refinancing could allow you to take advantage of the lower rates and potentially reduce your repayments. Julius says, "This is the perfect time to review your mortgage. Refinancing at a lower rate could free up cash flow for other financial goals or help pay off your loan faster. It’s all about making your money work harder for you." Julius suggests speaking with a mortgage broker to explore refinancing options tailored to your needs.
WHAT AbOUT SAVINGS?
On the flip side, lower interest rates aren’t great news for savers. Julius says, “If you have money in a savings account, you’re likely
to see lower returns. While this can be frustrating, it also provides an opportunity to reassess your financial strategy.”
Julius recommends considering alternative options such as term deposits, managed funds, or even exploring investment opportunities that could offer better returns in a low-interest environment. “It’s about finding the right balance between growth and security for your money.”
THE HOUSING MARKET OUTLOOK
Lower interest rates are often seen as a boost for the housing market. Julius says: “With mortgage rates dropping, we expect to see increased demand for homes as buyers try to take advantage of the lower borrowing costs. This could provide a lift to the housing market,
Continued over page
Continued from previous
especially as we head into the last quarter of the year.”
However, he advises that while lower rates might stimulate activity, the market could remain cautious due to other economic uncertainties. “We expect the housing market to strengthen, but it will likely be a gradual recovery rather than an overnight turnaround.”
WHAT’S NEXT?
With the OCR now at historically low levels and banks following suit with lower interest rates, it’s a crucial time to review your financial situation. Julius says, “Whether you’re looking to buy a home, refinance, or reassess your savings strategy, these lower rates provide opportunities to optimise your finances.”
Century 21 Financial are here to help you navigate these changes and make the best decisions for your future. Please do not hesitate to discuss how these lower rates could benefit you and your financial goals.
E: julius.capilitan@century21.co.nz
P: 027 2777 352
N Z c ONS tr U ct ION c OS t S SHOW MINO r UP t I c K AMIDS t ONGOING INDUS trY SLOWDOWN
Tax changes, high levels of existing stock on the market, and credit-constrained buyers have compounded the building industry slowdown, holding construction cost growth low for more than 18 months.
CoreLogic’s latest Cordell Construction Cost Index (CCCI) recorded a 1.1% rise in the September quarter, reversing the fall recorded in Q2. It marks the first time quarterly growth has exceeded 1% since December 2022.
However, the annual growth rate remains subdued at 1.3% - the second lowest since late 2013 and well below the long-term average growth rate of 4.3%.
CoreLogic Chief Property
Economist Kelvin Davidson said overall construction cost growth remains subdued, reflecting an easing of pressure for both labour and materials.
The index recorded a drop in subcontractor charge-out rates in Q3, alongside many plumbing materials such as PVC piping, although the cost for materials such as window hardware and kitchen joinery rose over the period.
“The wider residential construction sector has been in a downturn for about two years now, with dwelling consents falling and actual workloads subsequently declining too,” he said.
“The industry has come off extreme highs recorded during COVID, and building activity remains solid when compared to previous cycles. Even so, it does look like there is capacity opening up, which has reduced the pressure on costs.”
Mr Davidson said the industry is grappling with additional challenges, as many households remain financially cautious despite falling mortgage rates and the number of established property listings available for sale remains high.
New Zealand currently has about 26,000 properties listed for sale—up from 23,000 at the same time last year and double the 13,000 that were available in 2021.
“With such an elevated stock of existing listings, there’s less incentive for buyers to consider new-build properties,” he said. "The shortening of the Brightline Test and the reinstatement of mortgage interest deductibility for all properties regardless of age has also lessened the appeal of new-builds."
The supply pipeline has also slowed, with annual dwelling consents peaking at about 51,000 in May 2022 before falling 34% to 33,632 in August this year. Meanwhile, Mr Davidson said actual construction workloads, measured by ‘work put in place’, are down around 15% from their peak.
While the outlook for the sector isn’t particularly buoyant in the short term, signs of life might just be starting to emerge, and Mr Davidson noted that the Reserve Bank of New Zealand’s newly
introduced debt-to-income ratio restrictions, which exempt new builds, could help stimulate demand in this segment.
Further interest rate cuts and improvements in the labour market are also likely to have a positive impact on construction activity into 2025.
“Developers may feel more confident to increase supply if these changes, combined with falling mortgage rates, create
a relative shift in demand towards new builds over the next 12 to 18 months,” Mr Davidson said.
“This could lead to a resurgence in New Zealand’s construction sector, with agents and developers watching closely for any signs of a turnaround in 2025.”
CoreLogic’s research, tracks and reports on materials and labour costs which flows through to its Cordell construction solutions to help businesses make more
informed decisions, estimate rebuild and insurance quotes easily and, ultimately, appropriate risk effectively.
The CCCI report measures the rate of change of construction costs within the residential market for a typical, ‘standard’ three-bedroom, two-bathroom brick and tile single-storey dwelling.
Click here to read the full article
D e SIGNING t H e P er F ect SPA ce
As the days get warmer, many of us will want to make the most of our outdoor areas. Creating an inviting outdoor entertaining space can transform your backyard or balcony into a beloved gathering spot for friends and family. With the right design elements, you can ensure your outdoor area is not only functional but also aesthetically pleasing. Below are some tips to help you design the perfect space for outdoor entertaining.
1. DEFINE THE PURPOSE
Before diving into design elements, consider how you intend to use the space. Are you planning to host barbecues, intimate dinners, or larger parties? This will influence the layout, furniture and amenities you need. For example, a casual barbecue might require a grill, outdoor seating and picnic tables, while a more formal dinner may benefit from a dining table, elegant lighting and a more refined atmosphere.
2.
CHOOSE THE RIGHT LOCATION
Selecting the ideal location is crucial. Look for a spot that offers a balance of sun and shade. Proximity to your home is also important for easy access to the kitchen and indoor facilities. Additionally, consider factors such as privacy and noise levels from neighbours or streets. A sheltered area can provide a sense of intimacy and protection from wind or unexpected rain.
3. INVEST IN COMFORTAbLE FURNITURE
Comfortable seating is essential for any entertaining space. Opt for weather-resistant materials like aluminium, teak or synthetic wicker. Cushions can enhance comfort, but make sure they are made from outdoor fabric that withstands the elements. Create different seating arrangements – lounge areas for casual gatherings, dining sets for meals and maybe even a fire pit area for cosy evenings.
4. CREATE A FOCAL POINT
A great outdoor space benefits from a focal point that draws the eye and anchors the design. This could be a stunning outdoor fireplace, a beautifully designed water feature, or an elegant pergola adorned with climbing plants. A focal point not only enhances aesthetics but also provides a conversation starter, making your space more engaging.
5. INCORPORATE LIGHTING
Lighting is key to creating a welcoming ambiance as the sun sets. Use a combination of task lighting, such as string lights or lanterns and ambient lighting, like wall sconces or ground-level LED lights. Consider solar-powered options for an eco-friendly choice. Well-placed lighting can highlight pathways, enhance your focal point, and create a cosy atmosphere for evening gatherings.
6. ADD SHADE SOLUTIONS
To ensure your outdoor space is comfortable in various weather conditions, think about incorporating shade solutions. Pergolas, awnings or large umbrellas can provide relief from the sun. Consider using climbing plants or fabric canopies to add both shade and visual interest.
7. INCORPORATE GREENERY
Plants and landscaping can add vibrancy to your outdoor entertaining space. Use a mix of potted plants, flower beds and trees to create a lush environment. Herbs can also serve a dual purpose – adding greenery and providing fresh ingredients for your meals. Choose plants that are suitable for your climate and require minimal maintenance to keep the space looking its best.
8. PERSONALISE YOUR SPACE
Finally, infuse your personality into the design. Use decorative elements that reflect your style – colourful cushions, unique outdoor art or themed decor. Personal touches create a warm and welcoming environment that makes your guests feel at home.
By thoughtfully considering these elements, you can create a beautiful outdoor entertaining space that
will be the envy of friends and family. With comfort, style and functionality in mind, you can create the ultimate destination for gatherings, making lasting memories under the stars.
Image: Spacejoy on Unsplash
