KERIKERI PROPERTY MARKET - WHAT'S HAPPENING?

So what is really happening in the Kerikeri property market?

A common question we are hearing from clients and prospective buyers is what is happening in the Kerikeri property market after the lockdown was lifted. It is too early to predict any longer term trends but early indications are fairly positive with enquiry levels from prospective buyers getting stronger day by day.

There are a lot of people hitting the websites and watch-listing properties but a smaller number taking the next step and making appointments on some properties. This suggests people are exercising caution as might be expected in a time of uncertainty. The first weekend after lifting to Level 2 saw a lot of people reconnecting with family. We had several cancellations from people who changed their plans to travel to Kerikeri. Last weekend was more buoyant and we have a lot of appointments scheduled for the long weekend.

A large proportion of these buyers are from Auckland and other cities around New Zealand. We are also getting enquiry from expats who are or have been living overseas and who have made the decision to return to New Zealand. Just last week we had a couple who had finished quarantine and had moved back to New Zealand from Dallas, Texas as they were unhappy with the way Covid-19 has been handled there. Being able to operate their business remotely means that Kerikeri is an attractive option for them.

We have also been talking with contacts in Auckland and it appears that the opportunity to have a taste for a slower pace during lockdown has some thinking of making this lifestyle more permanent. Having figured out that working remotely under lockdown away from the main office is not only possible, but beneficial and more productive, the attraction of provincial towns has never been higher.  The lifestyle benefits of Kerikeri with a good choice of cafes and restaurants and recreational activities, easy access to the Bay of Islands for boating, great schools, fast internet, an airport and warm climate has our town in their sights.

Some are researching a list of provincial towns to call their future home. Kerikeri’s median prices have become much higher than the national median and for some will likely be unaffordable until price differences moderate. In this competitive national environment it is even more critical that out of town buyers understand what makes this fast growing town different and why their investment is secure over the long term. Consequently an essential part of our job is promoting the benefits of Kerikeri so these people choose us over other competing towns. This requires a fair amount of rapport building to gain trust, empathetic listening and knowledge of Kerikeri’s benefits that will suit their requirements. Our team of experienced Kerikeri locals have spent their lives building the skills and knowledge required to respond.

Enquiries and viewings have been across all price ranges with most in the residential house sector. Some properties have been attracting more viewings than others. 10 groups through our open home on a property in town over the weekend for example and now multiple offers coming in. We also have a resurgence of first home buyers looking to use their Kiwisaver savings to buy. Lower interest rates make servicing loans a little more affordable. Although lower rates and the elimination of Loan Value Ratios (LVRs) are positive for these buyers, lending criteria remains very tough and banks are looking at other factors than personal finance numbers such as future job security and potential future value reductions in their security. Residential investors are making enquiries as yields on other investment types drop and low interest rates reduce holding costs on property investment portfolios.

The numbers of sales in Kerikeri was down significantly during lockdown, of course, dropping from an average of 30 sales per month in 1^st Quarter 2020 to just 8 in April. We should have the May figures in a week or two but early indications are for  similar results to April. It is too early to see if property values have been impacted although purchasers who have made offers or discussed price would like to think they have. Most vendors are saying no and holding on nearer to their asking price. This is familiar territory for us negotiating to close this gap through 2008-2009 after the GFC until everyone settled into the new reality. Remember if you buy and sell in the same market it becomes irrelevant.

Historically drops in our median prices have occurred 6 to 12 months after a sustained reduction in number of sales. For now the median price is holding steady and a lot depends on whether the demand for what Kerikeri has to offer continues and whether our local economy continues to provide jobs. The good news on the latter is that we are less exposed than other towns who rely more on tourism. Primary industry and services that support the retiree sector appear to be holding strong, construction projects should continue as long as there are people moving north and retail and hospitality will hopefully revive with the movement to “support local”.

Needless to say there is a fair amount of uncertainty out there, still a bit of fear holding some people back from listing or buying. On the positive side people have had time to reflect on their lives and we are seeing buyers, and Aucklanders in particular, making the trip to see if Kerikeri will provide them with the lifestyle changes they are searching for.

Come see us for a chat now that you can again. Or give us a call if you are more comfortable with that. We are always more than happy to discuss what is really happening in the Kerikeri Property Market.

(*Source REINZ)