WELCOME TO THE September 2024
p U b LISH er
Century 21 New Zealand Ltd
CON tr I b U t O r S
Jen Baird
Fenny Ang
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
DISCLAI mer
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m A r K et S tA b L e AS S e N t I me N t I mpr OV e S
BY JEN BAIRD, REINZ CEO
The Real Estate Institute of New Zealand (REINZ) August 2024 figures show signs of increased confidence, optimism and activity compared to the previous year. While the overall sales volume slightly declined, several regions reported notable increases in activity, and year-on-year listing numbers continue to rise.
REINZ Chief Executive Jen Baird said August provided a sense of confidence and positivity to the property market.
“August data shows a level of stability in the market. Despite a marginal 0.6% (or $5,000) decrease in national median prices year-on-year, we’re seeing prices hold steady with a 1.3% increase month-on-month, ” says Baird.
Compared to August 2023, the total number of properties sold nationally decreased by 0.7% (just 40 properties), from 5,725 to 5,685, and decreased by 5.1% month-on-month, from 5,992 to 5,685. In the regions, eight regions saw an increase in sales in August 2024, and the most significant increases were in Northland (+22.7%), Hawke’s Bay (+21.6%) and Bay of Plenty (+16.2%). Compared to July 2024, five regions saw an increase in sales volume.
The national median price decreased by 0.6% year-on-year, from $770,000 to $765,000, and
increased by 1.3% month-on- month. For New Zealand, excluding Auckland, the median price increased 1.6% year-on-year from $670,000 to $681,000. Month-on-month, the median price increased by 1.8%.
Six of the sixteen regions had a median price increase year-on-year, with Otago leading the way with a 6.7% increase to $640,000, followed closely by the West Coast with a 6.6% increase to $357,000. Eight regions increased month-on-month, with the most notable changes observed in Marlborough (+7.8% to $625,000) and Gisborne (+6.0% to $620,000).
Staying in the regions, thirteen of the fifteen have seen a rise in new listings year-on-year, with the most notable increases recorded in Gisborne (+69.2%), Marlborough (+40.8%) and Manawatu-Whanganui (+39.8%). Two regions saw a decrease in new listings year-on-year: Nelson (-18.1%) and Northland (-11.1%). Nationally, there was an 8.1% increase in new listings compared to August 2023.
“This month, we saw further signs of a change in market sentiment, with local agents reporting increased confidence in vendors and purchasers, the return of investors, and increased activity, particularly at open homes over the last two weeks of August. They attribute this change to the decline in interest rates. However, it would be an overstatement to say that we are at a turning point in the market – we merely have our indicators on. While there is a rise in optimism and confidence, we are hopeful that better times are still ahead,” adds Baird.
The national inventory level increased by 30.0% (+6,830) in August, from 22,750 to 29,579 year-on-year and decreased by 3.2% (-977) from 30,556 month-on-month. For `New Zealand ex Auckland, inventory levels increased 30.8% (+4,348) year-on-year from 14,099 to 18,447 and decreased 2.4% (-460) compared to June 2024.
ANNUAL MEDIAN PRICE CHANGES
Compared to August 2023, the median days to sell increased by eight days, from 42 to 50 days nationally. For New Zealand, excluding Auckland, median days to sell increased by six days, from 43 to 49 year-on-year. Five regions had fewer days to sell in August 2024 than in August 2023. Northland had the highest median days to sell at 71 days, an increase of 10 days year-on-year.
“We continue to see an increase in the average number of properties listed. Although the inventory is down slightly compared to last month, the volume of properties for sale continues to provide a lot of choice for buyers,” adds Baird.
There were 656 auctions nationally in August 2024 (11.5% of all sales),
compared to 799 (10.9% of all sales) in August 2023. The Auckland region called 335 auctions in August 2024 (18.6% of all sales), compared to 492 auctions or 25.5% of all sales in August 2023.
“There is an expectation that rates will fall further towards the end of this year, providing the much-needed relief to property owners and those in the position to buy, which may increase sales volumes nationwide,” comments Baird.
The HPI for New Zealand stood at 3,563 in August 2024, a 0.8% decrease from August 2023. There was no change compared to July 2024. The average annual growth in the New Zealand HPI over the past five years has been 5.0% per annum,
Source: REINZ Monthly Property Report 13 September 2024.
and it is currently 16.7% below the market peak reached in 2021. Southland is the top-ranked region in August, with a +3.0% increase year-on-year.
Click here to read the full report
WANAKA
TIME TO SELL YOUR PROPERTY?
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W HAt A re t H e L e GAL
re QUI reme N t S FO r
LIS t ING A pr O pert Y FO r SAL e ?
BY FENNY ANG, C21 EDWARDS REALTY
Before putting your property on the market, it’s essential to understand the necessary requirements to ensure a smooth and legally compliant process. It’s a significant legal transaction, so while this overview provides general information we suggest consulting with a legal professional for specific advice.
So what are the requirements?
PROPERTY INFORMATION AND DOCUMENTATION
• Providing accurate property details is paramount, and includes information about property boundaries, easements, covenants and any known issues.
• Misrepresentation of this issue can lead to legal disputes.
• A clear understanding of the property title is essential and includes titles and encumbrances such as any mortgages, caveats or other claims on the property.
• If recent renovations or alterations have been made, ensure you have necessary building and Code of Compliance (COC) certificates. These documents verify that the work complies with New Zealand building standards.
• Disclosing any known material defects or issues is mandatory. This includes information about
pests, structural problems or environmental hazards.
LEGAL CONTRACTS
• The Sale and Purchase agreement contract outlines the terms and conditions of the sale. Seeking legal advice when either preparing or reviewing this document is highly recommended.
• If you are using a real estate agent then a formal agency agreement should be in place and detail the agent’s responsibilities and commission.
TAX IMPLICATIONS
• Having an understanding of the implication of Capital Gains Tax (CGT) is crucial, especially if you’ve owned the property for less than two years.
• The buyer will typically pay a Land Transfer Tax but the seller will need to be made aware of this cost.
ADDITIONAL CONSIDERATIONS
• If there are any building consents or resource consents related to the property you will need to ensure they are in order.
• Properties within a body corporate or homeowners association might have specific requirements or fees associated with the sale process.
• You will need to clearly define what is included in the sale. Chattels are movable items such as furniture while fixtures are attached to the property, such as taps.
By understanding these legal requirements you can navigate the property sale process with confidence and minimise potential legal complications. For advice tailored to your specific situation consult with a legal professional.
I NFLAt ION AND t H e
OC r : WHAt I t me ANS
FO r e V erYDAY KIWIS
BY JULIUS CAPILITAN
As we approach the end of the year, inflation continues to be a concern for many Kiwis. The rising costs of living means everything from groceries to mortgage payments are putting pressure on household budgets. However with the Reserve Bank of New Zealand starting to cut the official cash rate there may be some relief on the horizon.
Century 21 New Zealand’s Finance Managing Director says “Inflation is basically the rate at which the prices of goods and services go up over time. Over the past couple of years, we’ve seen it rising faster than normal, and that’s why everything seems more expensive. The official cash rate is used to try to manage inflation. When it is high, it makes borrowing more expensive, which can slow down spending and cool off inflation. But now that they’ve started cutting the rate the idea is to make borrowing cheaper again and get people spending and investing more.”
However, he warns that this is a delicate balance. “We’re possibly heading into what’s being called a ‘triple trough recession’ as per Kiwibank’s latest economic update, meaning we could be looking at our third recession in two years. It’s tough out there for households and businesses alike.”
The latest reports suggest that the New Zealand economy shrank again by 0.4% in the June quarter.
For Kiwis, that means rising costs, tighter budgets, and less money to go around. It’s been a tough stretch, no doubt about it.”
THE HOUSING MARKET: WHAT’S GOING ON?
The housing market has been deeply impacted by these financial conditions. According to the latest REINZ data:
• House sales in August declined after a small rebound in July.
• House prices have fallen for the fourth consecutive month.
• New listings and overall inventory levels are rising, but demand remains relatively weak.
While the cuts to the cash rate should help boost the housing market over the rest of the year, it’s not going to turn around overnight. Interest rates are still relatively high, and inflation is still a big issue. Improvement is going to be gradual.
WHAT DOES THIS MEAN FOR YOU?
For everyday Kiwis, the current financial situation can feel uncertain. Inflation is making it
harder to stretch a dollar, and with the possibility of another recession looming, many are unsure of what comes next. Borrowing costs should start to come down soon which will help ease some of the pressure. It will also create more opportunities to invest in property and other areas as we move into 2025. It is important to stay informed and make the right financial decisions during these times.
At Century 21 Financial, Julius has spent years helping Kiwis navigate similar challenges. He says “Whether you’re buying your first home, selling, or just looking for some solid financial advice, we’re here to guide you through it. My team and I know this market well, and we can help you make the best decisions for your financial future.”
b r IGH ter FU t U re
FO r S m ALL INV e S tO r S AND RELOCATING OWN er -OCCU p I er S AS MARKET CONDI t IONS SHIF t
BY CORELOGIC NZ
In today’s Pulse, CoreLogic's Chief Property Economist Kelvin Davidson explores a number of ongoing and emerging trends in New Zealand’s property market, including the continued strength of first home buyers (FHBs) compared to relatively low levels of activity from relocating owner-occupiers (‘movers’) and mortgaged multiple property owners (MPOs) – along with early indications that new investors are beginning to re-enter the housing market.
INVESTORS EYE NEW OPPORTUNITIES?
First, we’ll take a look at buying activity for new-builds* versus existing properties. This distinction has become a little less relevant for some buyer groups (especially investors) in the past few months, as the mortgage interest deductibility and Brightline Test playing field has been levelled out. However, the loan to value ratio (LVR) rules and debt to income (DTI) restrictions still favour new-builds, so there’s still considerable interest here.
As the first chart shows, the share of new-build purchases going to mortgaged MPOs rose sharply from around 25% in 2020 (and prior) to more than 30% in 2022 – as the tax rules shifted in favour of new-builds – and has stayed at that higher level in 2023 and so far in
2024. Meanwhile, first home buyers have also become a bigger player in the new-build segment over time, with the LVR rules likely to have played a role (new-builds require smaller deposits) and also the fact that more new-builds in recent years have been townhouses, which are cheaper than other types of dwellings. That lower entry price for townhouses will have tended to help FHBs overcome any affordability hurdles. We can also split the data by portfolio size, and it’s interesting to see a few tentative hints in recent months that mortgaged MPO 2’s – i.e. people who own two properties after their latest purchase; essentially a new investor – might just have started to eye up the housing market again (see the second chart). The MPO 3-4s are also showing glimpses of a rise, but
the market share for larger players (MPO 10+) has tailed off in the past 6-9 months. In other words, new investors might be slowly returning, as term deposit and mortgage rates dip, and the tax rules become more favourable; however larger existing landlords are biding their time, to some extent comfortable with their current holdings. (*Any properties we identify with the first title transfer being within 12 months of the year built. The sale price could of course have been agreed much earlier.)
MOVERS POISED FOR A COMEBACK?
Another cut of the figures is to focus only on movers and assess the choices they are making. Broadly speaking, this group has been relatively quiet in recent years, with factors such as market uncertainty and challenging financing conditions meaning more
of them have been happier to just stay put rather than shift house. But of the mover activity that has happened, the third chart shows some interesting patterns, with ‘new to area’ (shifting locations) not as prominent as it was in 2021 and 2022, but downsizing still an important trend, while at the same time upsizing has become relatively more popular this year too. This fits with the general ‘rule of thumb’ that a weak market can be a good time to move up the ladder because although you might take a price hit on your own property, there’s the possibility of a bargain on the next one too.
FHbS REMAIN RESILIENT
The split of the types of property that different groups are buying and what they’re paying is also pretty interesting. For example, in 2024 73% of FHB purchases have been standalone houses, paying a median for those properties of $695,000. Houses represent 74% of movers’ purchases in 2024 to date, with a median paid of
$875,000 – no real surprise there, that relocating owner-occupiers tend to operate in a higher price bracket than FHBs.
And finally, houses are ‘only’ 64% of mortgaged MPOs’ purchases in 2024 to date, with a median for those houses of $806,500. The lower share of houses amongst investors’ purchases illustrates their greater tendency to look at smaller dwellings such as townhouses, where there are more new-builds.
THE OUTLOOK FOR 2024 AND BEYOND
Looking ahead, it wouldn’t be a surprise to see FHBs maintain a solid presence in the market for at least the rest of 2024. After all, they always tend to ‘find a way’, and have quite a few things in their favour at present, such as access to KiwiSaver for at least part of the deposit and a strong hold on the low deposit lending allowances at the banks. But as the current gap between mortgage rates and rental yields closes (thereby reducing the cash
top-up for a typical property), there are also reasons to think ‘Mum and Dad’ investors could become a little more prominent again next year, perhaps drifting back towards existing stock rather than new-builds to some extent – although the DTI rules will keep a lot of investors firmly in the new-build camp too.
And for movers, ‘life still happens’, so their relative lack of activity in recent years suggests there’s probably a degree of pent-up demand to shift. Provided that more owner-occupiers can start to sell their current house a little more quickly, activity in terms of movers shifting onto that next property could also be a little stronger over the next 12-18 months.
Click here to read the full article
H OW tO m AK e
YOU r re N tAL
pr O pert Y F ee L
LIK e A HO me
Renting a home can come with a different set of challenges to purchasing one, especially when it comes to making the space feel like your own. There are some clever ways you can create a comfortable and ‘homey’ environment without making permanent changes.
PERSONALISE YOUR SPACE
Even without the ability to paint or make structural changes, you can still add personal touches to your rental. Display mementos, souvenirs, art or photos in your home. For hanging art or pictures, use command strips from your local hardware store. These strips adhere without damaging the walls or affecting your bond and they come off cleanly.
RUG UP
You can add warmth and style with rugs, which can cover unattractive flooring and better define separate
living spaces. Choose larger area rugs for broad spaces or smaller ones for specific spots like under a coffee table or beside the bed.
DRESSING YOUR WINDOWS
Curtains can also enhance and soften the look of a room. If your rental has unappealing blinds, consider using tension rods or command hooks to hang your own curtains, but make sure to check with your property manager first.
GET CONNECTED
A reliable internet connection is essential in today’s world, and nothing makes you feel more at home than snuggling up in front of the TV with your favourite streaming service. If your rental isn’t yet connected, coordinate with the property manager to get it sorted. Placing your router in an elevated position and away from interference like microwaves can make a great deal of difference in the quality of your wifi.
INVEST IN YOUR LIVING AREA
The living room is often where you spend the most time beside the bedroom, so it’s worth investing in. Choose multifunctional furniture, such as a sofa bed or an ottoman with storage, to maximise space. Throw and cushions are a simple way to dress up or change the look of a space with a splash of colour or pattern.
CUSTOMISE YOUR LIGHTING
Lighting plays a crucial role in setting the mood of your home. Use a mix of light sources, such as floor lamps beside reading chairs or sofas, and table lamps on side tables or desks. Wall sconces can highlight artwork or architectural features while saving space and adding a touch of sophistication. Opt for warm light bulbs instead of harsh white lights to create a more inviting atmosphere. A well-lit home not only enhances comfort but also helps you feel more settled in your new space.