Latest National Sales Trends and Kerikeri’s Outlook

Sales figures for July, released earlier in the month by REINZ, show a cooling trend in the property market for all of New Zealand, driven largely by a slowdown in Auckland. This slowing of sales was also reflected in Kerikeri’s figures for July - yet enquiry from buyers is still going strong!

New listings have picked up a bit in August and so have sales in the most desirable price brackets, with properties often selling within a week of being advertised.

Like many provincial towns in New Zealand our property market is cyclical. Our cycles historically lag behind Auckland’s by a couple of years. Sales volumes and prices dropped significantly in 2008 with the GFC, bottoming out in 2012, steadily increasing afterwards and significantly so in the last two years. This recent growth has been primarily driven by Aucklanders moving north or securing property for the future for lifestyle/retirement. By analysing local sales statistics, we estimate that about 600 to 800 new people moved to Kerikeri last year (66% of our purchasers came from out of town) and we are expecting similar gains this year. Fewer vendors (about 20%) are leaving Kerikeri when they sell because it has become less affordable to move to other areas, especially in Auckland, than in the past.

Despite a 20% increase in building consents over last year, the quantity of new homes being built is not keeping up with demand and now desirable sections are starting to run short as well.

Contrary to some opinions there are not many sections available on the Kerikeri market (many advertised are multiple listings and/or under offer awaiting title issue). There are few developers in the area developing new land and the high demand to short supply is pushing land prices up fast. Prices for average size sections with no outstanding features have nearly doubled over the last two years averaging $210,000 today.

Most established sewered sections are sold and there are few opportunities to add more for several years until the Far North District Council expands the sewer infrastructure. This has led to medium size homes on 500m2 sewered sites, that were selling for $400,000 a few years ago, now selling for mid $600,000s within a few days of being on the market.

The majority of house buyers moving to the area have been purchasing in the $400,000 to $800,000 range using a portion of their funds from sales of their homes in Auckland to purchase, leaving the excess funds to invest or live on. Buyer focus has increased prices over the last two years as stock has diminished and prices risen, both here and in Auckland. Median house prices in Kerikeri have risen from $380,000 in 2012 to $560,000 in 2016 to date.

We eagerly await the rollout of the proposed new sewer infrastructure by the Far North District Council so that more affordable sections and houses become available and we can keep up with the demand from people looking to secure a life in this terrific area we are so fortunate to live in.

Planned growth has so many benefits to a small town like ours, bringing vibrancy, jobs and opportunities. We look forward with a great deal of interest to the details of how our town planners see the future of our town and their plans for introducing them.

It’s safe to say there’s a fair bit of catching up to do.