April marked another great sales month for our team with 9 unconditional sales bringing our total number of residential sales in Kerikeri to 26 for the year. This emphasizes our view that well-presented and well-marketed properties will sell no matter the market conditions. Timelines to sell may be a little longer than a few years ago but buyers and sellers are adjusting to the current market dynamics. The bottom line is there are always plenty of reasons for people to want to move.
While median prices are down from their peak of 2022 they are still tracking above the trend-line for property appreciation which typically doubles every 10 years in New Zealand. In many cases sales are providing better returns on investment than other parts of the country. While this is good news for property owners it can tend to dampen the appetite of those buyers who have sold at large discounts in other part of the country. Those that are moving here and buying are cautiously doing their homework and are selective in their buying decisions. Competitive pricing remains of critical importance in this market where there is a wider array of choices for buyers.
Around 65% of house sales this year have sold for under $1 million up from around 58% last year and 46% in 2022.
Inventory levels are high with 85 weeks of properties available at current sales volumes but are at much lower levels in the under $1millon bracket.
Consequently, the higher price brackets have compressed back on the lower brackets, a bit like an accordion, which is the reverse effect we saw in 2020 to 2022 when the market was stronger for vendors.
Bare land sales are still slow for the third year in a row and consequently building consents are significantly down as people favour purchasing existing homes over building new homes.
All of this is creating opportunities for first home buyers to get on the ladder and for those in a position to “buy up” to do so with capital input and less competition than it may have taken a few years back. Even with higher interest rates, those who can make the change now stand a greater chance of acquiring the bigger property or higher quality home and increasing their equity position in the long term as prices rebound and interest rates lessen.
Pop in for a coffee and a chat about market conditions and opportunities to achieve your property goals with any of our team at your leisure. We hope to hear from you soon.
You might also be interested in
May 29, 2024
Good News For Investors
On July 1st 2024 the rules affecting the Brightline Test are changing. Currently vendors who sell their properties that are not their main residence within 10 years of initial purchase are liable to pay tax on the capital gain they make. This period is being reduced to 2 years on July 1st. This means properties acquired before July 2022 and sold after July 1st 2024 will be exempt from the Brightline Test, bringing tax relief to some property investors and making it easier to sell. Higher (partially deductible) interest payments, rates and insurance have put financial strain on many investors. There is an expectation that this Brightline change will encourage some investors to sell their investment properties. We are aware of buyers who have not found the home they are looking for or who have been waiting for this change to add to their property portfolios. We are expecting good levels of interest as these properties come to market. The timeframe is short to be ahead of the pack and we are advising those thinking of selling to act now to beat the rush. There is nothing stopping those affected by the current tax rules from marketing their properties ahead of the change providing they do not enter into a sales and purchase agreement before July 1st. Now is the time to get advice from us about your options for selling. We are happy to assist with a current market appraisal and a marketing programme to sell in early July. We advise you to seek independent advice from your accountant or financial advisor about how these changes affect you in the context of your own tax position. Call now for more information and free advice from any of our residential sales team.
May 29, 2024
Where To From Here?
2024 continues to amble along into the second quarter. Sales in 2023 were at the lowest dollar value since 2015. Prospects for this year and into 2025 are improving as interest rates stabilise and business confidence in some sectors particularly begin to grow. Commercial lease rates have tended to remain steady, but negotiation within the range has become more common, with determining factors being location, building quality and length of vacancy. The retail sector has been hardest hit with low confidence in the immediate future as the discretionary dollar spend continues to decline with a decision either not to spend or looking at cheaper options. Interest in purchasing an existing business has shown a slight increase in the last 6-9 months and appears to be driven by a mix of increased immigration and those who have been or are going through job restructures and are looking at the opportunity to buy an income. On the political front we are waiting to see what the effect of the proposed and implemented changes will bring and the 2024 budget due this week may provide a catalyst to where government funding will be spent and what projects will be actioned so departments can make commitments. At the moment everything and everybody seems to be in a wait and see mode. As we head into winter, maybe instead of snuggling down, we look at this time as being an opportunity to make that change, challenge our boundaries and be part of the start of the change instead of seeing it happening later on and trying to catch the train as it is leaving. We recently completed a successful business sale of Santeez Café. We wish to welcome the purchasers Christian and Roslyn to Kerikeri and are looking forward to the upcoming opening of their restaurant, Kai Mata. Drop into the office to have a chat about what is happening in our local commercial market.