Market Update 2019

Volumes are back to long term average levels but slightly down on last year - prices in most brackets holding steady

Greetings

We are pleased to provide you with our latest update on the Kerikeri property market through the end of April. Please remember you are very welcome to pop in for a coffee and a chat with any of our experienced and friendly team members anytime.

Market summary

The summer of 2019 followed a similar pattern to previous years, exhibiting the usual seasonal slowdown in sales before and after Xmas.  This year it extended longer, until the end of February, echoing the slow start in other markets around New Zealand.  Our theory is that concerns about the potential implications of proposed legislation such as the Capital Gains Tax and the fantastic summer weather prevented buyers and sellers from taking the usual action after the holidays. March sales were strong again followed by more average results in April. As a result, Total land and house sales volumes for Kerikeri are down 14% for the year to the end of April compared with the same period in 2018 and have returned to more average levels from the boom levels of 2016 and 2017.

Annualized median prices for residential homes have levelled off at $667,000 in recent months after climbing to a record high level of $685,000 in 2018.  This is well above the annualized median for New Zealand ($565,000) and Northland ($485,000.) Annualized median prices in April 2019 were 5% higher than April 2018.

The middle of the market ($500,000 to $800,000) has performed steadily but activity in the higher price brackets (over $1million) has slowed after a record year in 2018.

Lower stock levels of homes under $500,000 have kept sales volumes low although time to sell for these properties is relatively short when they do come on the market.

Building appears to be a popular choice again as bare land sales are double the number sold in the same period of 2018.

Results by sector

Houses

The over $1 million housing bracket sales volumes are down by a third on the 2018 volume. There have been 9 sales in 2019 compared with 15 in the same period 2017. Lower demand and higher numbers of competing properties on the market are resulting in longer times to sell and some vendors have reduced their prices to meet the market.

The middle and upper middle of the market ($500 - $1,000,000) has been steady with similar overall volumes of sales compared to 2018 (49 compared to 48) and 74% of home sales fell into this price range.

The lower end of the housing market (under $500,000) experienced a slower summer, with 10 sales compared with 17 last year, due to a shortage in stock.  Demand for property in this price range has increased from first time home buyers and investors as deposit requirements and interest rates have been lowered.

Bare Land

Residential section sales volumes for 2019 are double that of 2018 at 15 sales compared to 7 during the same period last year. Lifestyle bare land (i.e. land over 1ha) sales volumes are a little slower with 8 sales this year compared with 10 in this time last year.

The annualized median price for sections in Kerikeri has reached $248,000 in April 2019 and has risen 15% from April 2018. The median price for sections sold during 2019 is $265,000, indicating that prices are continuing their upward trend. Median prices are still below the national average of $257,000 but above the Northland average of $232,000.

Commentary

Our outlook is for steady sales through the remainder of 2019 based on continued migration north of retirees from the major centres, strong net migration into New Zealand, growth in primary, retirement and tourism industry sectors creating employment opportunities and stimulus from lower interest rates. Median prices should remain level to slightly increasing if new listings keep up with the steady demand and sections remain in relatively short supply. We believe it is unlikely that we will see the return of significant land price drops as witnessed in 2008 when there was a massive oversupply of sections for sale competing for very few buyers.

If the Auckland market remains cool, then some vendors in the higher brackets will likely need to be prepared to reduce their price expectations to compete for fewer buyers, particularly if they have priced ahead of the market when listing.

Our team has been busy working on appraisals and focusing on ensuring we have the most expansive choice of properties available on the Kerikeri market for the remainder of 2019 and beyond. (You can view our new listings here)

We thank all our customers for their continued support and for consistently making REAL Kerikeri’s number 1 choice for your real estate sales. We are excited about prospects ahead for the rest of 2019 and look forward to the opportunity to serve you whether buying or selling in the future.

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Source* Statistics sourced from www.reinz.co.nz