Third Quarter Market Update

Residential and Lifestyle Market Report by the Numbers

We are pleased to provide you with our latest quarterly update on the Kerikeri property market. Knowledge is power they say and we appreciate the positive feedback we have received from you, our customers, regarding the information we provide. These are exciting times in real estate in Kerikeri as the growth in the local tourism, retirement and horticulture industries brings more jobs and people to the area. Please remember to pop in for a coffee and a chat with any of our experienced and friendly team members anytime.

Market summary
The third quarter of 2018 followed similar trends to the prior half of the year with slightly lower sales volumes than 2017 across most sectors except in the higher price brackets. Total land and house sales volumes for Kerikeri are down 9% for the year to the end of September compared to the same period in 2017 but are still above average levels historically. The exception is the $800,000 plus market which is outperforming other brackets with 26% of the sales in Kerikeri in 2018 compared to 17% at the same time in 2017.

After a period of sustained increases in the annualized median prices for residential homes over the past three years to a record high level of $650,000 there was a slight drop over winter which then recovered in the past two months. The market appears to be testing this record median price level and it will be interesting to see if median prices rise more over summer. Average prices for residential homes are at record levels on the back of more and higher prices being achieved in the $800,000 plus brackets.

Lower numbers of bare land listings continue to keep section sales volumes to below average levels. Some developers are now offering fully serviced sections for sale in the expanded sewer area of benefit but titles will not be available until the sewer plant is up and running at the end of 2019. These timeframes are not acceptable to most buyers whose choices for bare land are now limited to a handful of subdivisions or purchasing properties with homes already built on them. We are witnessing buyers looking further afield to Kerikeri surrounds, Coopers Beach and Tokerau Beach in order to find more choice and less expensive options.

Results by sector
Residential section sales volumes for 2018 are 50% lower than 2017 at 21 sales compared to 40 during the same period last year due to limited stock on the market. Lifestyle bare land (i.e. land over 1ha) sales volumes are a little ahead of last year with 24 sales compared with 21 this time last year.

The over $1 million housing bracket continued its strong performance with over double the 2017 volume. There have been 34 sales in 2018 compared with 16 in the same period in 2017. Sales recorded in October suggest this trend is likely to continue for the remainder of the year with steady demand from buyers particularly those moving here from other parts of the country seeking quality homes.

The middle of the market ($500 - $800,000) has been steady with lower overall volumes of sales compared to 2017 (121 compared to 142) but a similar percentage of the market for the bracket (45% of all sales were in this bracket).

The lower end of the housing market (under $500,000) experienced a slower winter but a resurgence of first time home buyer and investor enquiry in September and October has led to a rise in sales. Properties that had been sitting on the market for a while have sold.

Commentary
As previously mentioned the annualized median price for residential homes in the Kerikeri area has levelled out around $650,000 which is well above the annualized median for New Zealand of $550,000. Historically Kerikeri house prices have run above the New Zealand median with the exception of the period between 2011 and 2016 when the effects of the Global Financial Crisis (GFC) and an oversupply of bare land in Kerikeri brought prices in line with the rest of New Zealand. It is worth noting that this much difference to the New Zealand average has not been seen since 2008 when Kerikeri prices had run up against the New Zealand median just before the big correction after the GFC.

The annualized median price for sections in Kerikeri has reached $240,000 and is now back to levels achieved just prior to the correction in 2008 after the GFC. Kerikeri’s median price is still below the New Zealand median price for sections where it had consistently tracked above it prior to the GFC. This begs the question of whether there could be more room for the prices of sections in Kerikeri to run higher to catch up with other areas of New Zealand. If the shortage of sections continues and demand for building remains steady then it is feasible that bare land prices will continue to increase.

A steady inflow of new listings through spring, combined with continued interest from buyers, both locally and around the country, as we had predicted earlier in the year, is resulting in another positive year for the residential and lifestyle real estate markets in Kerikeri. 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 2018 and beyond.

In September the REAL team broke our own record for sales agreements negotiated in any one month with over a whopping $12 million achieved for our vendors. We thank all our customers for their continued support and for consistently making REAL Kerikeri’s Number One choice for real estate sales. We are excited about prospects ahead for the rest of summer season and look forward to the opportunity to serve you whether buying or selling in the near future.