C21 Market Pulse | May 2021 | New Zealand

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PUBLISHER Century 21 New Zealand Ltd

CONTRIBUTORS Derryn Mayne Cameron Brewer Wendy Alexander

EDITORIAL ENQUIRIES Century 21 New Zealand +64 9414 6041

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WELCOME TO THE

MAY 2021 ISSUE OF

C21 MARKET PULSE

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C O N T E N T S M A Y

C21 NEW ZEALAND NEWS

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PROPERTY MARKET UPDATE

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First-home buyers should be a key Government

REINZ data shows highest number of properties sold in

focus.

an April month in 5 years.

Owner, Century 21 New Zealand, Derryn Mayne

Acting CEO, REINZ, Wendy Alexander

LOW RATES FOR LONGER

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DEPOSITS LIFTING Investors taking a deap breath but properties

Low rates for longer creates a once in a lifetime opportunity.

remain a safe bet.

Cameron Brewer

Cameron Brewer

QUARTERLY AWARD WINNERS

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Te Awamutu wins top office in C21 quarterly awards.

Cameron Brewer

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C21 NEW ZEAL AND NEWS

FIRST HOME BUYERS SHOULD BE A KEY GOVERNMENT FOCUS The Finance Minister has been largely silent on what the Government will further do to help firsthome buyers into the property market.

B Y D E R R Y N M AY N E ,

OWNER, CENTURY 21 NEW ZEALAND

more towards first-home buyers’,

Recently, Realestate.co.nz

but almost every Kiwi would agree

confirming their popular property

that has yet to be achieved.

website is expecting even more

I acknowledge the Government recently lifted the price caps on eligible properties and the income thresholds of first-home buyers

search traffic this year – a significant finding given 2020 was the website’s busiest year since 2016.

applying for HomeStart Grants and

Demand remains strong, but

First Home Loans. However, at best

nationwide real estate agencies of

it has turned out to be tinkering with

every colour just don’t have the

on 20 May. That’s if his Pre-Budget

little positive impact so far.

stock to match that demand. In fact,

speech to the Wellington Chamber

Try buying an existing house in

of Commerce earlier this month is

Auckland for $625,000 or a new

anything to go by.

build in Auckland for less than

There the Finance Minister talked

$700,000. In fact, since the higher

In fact, at the writing of this, Grant Robertson is actively lowering expectations ahead of Budget 2021

up the Government’s housing package in March but alluded to no further housing announcements in the forthcoming Budget. Instead, he said ‘turning around a housing crisis, decades in the making, will take time’.

I’ve been hopeful that first-home buyers feature strongly in the Budget with measures that actually get them into the property market.

Afterall, the Finance Minister has long promised to ‘tilt the balance

price caps took effect on 1 April, we’ve in turn seen developers

according to Realestate.co.nz the number of houses on the market nationwide in April was down nearly 20% on the same time last year.

That’s a significant shortfall of listings.

bumping up their townhouse and

Prospective sellers who own

apartment prices to just below

properties outside the reach of

the new maximum caps. That’s a

most first-home buyers should

terrible public policy outcome and

list sooner rather than later if they

only puts more debt on first-home

want to achieve maximum interest

buyers.

and price. Policies are now taking

While property prices might be flattening out in some quarters,

hold which are seeing less investors competing for property.

demand certainly isn’t with first-

The Government has got

home buyers still forced to go

particularly tougher on property

beyond the pale to secure a

investors, which is already seeing

property.

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fewer enter the market and more exiting. From 1 May, the Reserve Bank also introduced a 40% deposit requirement for investors which is slowing down the likes of ‘mums and dads’ looking at purchasing a second home to rent out.

While the Government is achieving some sustainable cooling in parts of the property market, it remains miles off being tilted in favour of first-home buyers.

First-home buyers are not expecting a free lunch, but they will be anticipating some workable policies and plans that ensure a leg up on the property ladder.

Enabling more young Kiwis into property ownership would be one of the greatest things this Government could deliver for the future and security of New Zealanders. With Budget 2021, we’ve all been waiting with bated breath.

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FIND OUT THE NEW VALUE OF YOUR PROPERTY The property market has seen a significant change in recent months and you may be surprised by the current value of your property.

For over 50 years Century 21 has been helping sellers achieve their outstanding results. We would be delighted to provide you with an obligation-free market appraisal.

Request your free market appraisal today.

Visit: C21.co.nz/sell

CELEBRATING 50 YEARS

L OW R AT E S F O R L O N G E R

LOW RATES FOR LONGER CREATES ONCE IN A LIFETIME OPPORTUNITY The Reserve Bank’s confirmation today that it’s holding the Official Cash Rate at 0.25% is great news for household borrowers with plenty of avenues to secure a mortgage still in existence, says a leading financier.

“While the OCR is expected to remain low for some time, the talk now is when will interest rates go up, not if. This is reinforced by some banks currently pushing very

of mainstream banks making

who can stump up with say half of

impossibly high hurdles to secure

the money or more. As long as the

a mortgage, the entry for many

rent services the mortgage, then

borrowers remains achievable,

the financial assessment can be

particularly as people head to more

less, there’s often no barrier on age,

flexible non-bank lenders, he says.

and the commercial interest rate

“Often first-home buyers get rejected by the big banks because

can be low – when dealing with the likes of retirees,” he says.

they don’t quite meet the servicing

Likewise, he says, high-income

requirements, or they might not

loans can still be easily achieved as

have a 20% deposit. However, there

can construction loans when clients

remains plenty of can-do lenders

can leverage development projects

who are prepared to back good

against freehold land and other

people, do the running around, and

assets.

secure an even lower interest rate,” says the Century 21 financier.

Century 21 Financial works with the big retail banks, smaller banks,

sharp rates on four and five-year

He says with everything getting

credit unions, and non-bank

terms such as 2.89% and 2.99%

harder when it comes to higher

lenders. It offers a full range of

which are increasingly tempting for

deposit requirements, tougher

financial and mortgage broking

homeowners,” says Julius Capilitan,

scrutiny on the self-employed,

services, with Century 21 real estate

Managing Director of Century 21

capital gains on investment

offices nationwide also referring

Financial New Zealand.

properties, it’s easy for borrowers

clients for financial advice and

to become despondent. However,

lending.

“Don’t let commentators tell you interest rates are low but it’s impossible for many to borrow. Not true. Banks are set to really start jostling for market share, both in the

there remains plenty of money to lend and while interest rates remain so low, Kiwis should act on this once in a lifetime opportunity.

“Century 21 Financial certainly strengthens our company’s proposition in real estate. Julius and his team are working closely with

commercial and residential sectors.

Julius Capilitan says with an array

our franchises, delivering on the

What’s more, banks are making a

of disincentives now at play for

property ownership dream for many

big shift to accommodate first-

residential property investors and

Kiwis,” says Derryn Mayne, Owner

home buyers. Hence, we are seeing

landlords, many ‘mum and dad’

of Century 21 New Zealand.

more incentives such as higher

investors are actively considering

cash-back amounts being offered,”

commercial property.

he says.

“We’re seeing asset-rich loans

While stories have been aplenty

achieved with ease. That is someone

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www.century21financial.co.nz Photo: Julius Capilitan – Managing Director - Century 21 Financial NZ (027) 2777-352

Q U A R T E R LY AWA R D W I N N E R S

TE AWAMUTU WINS TOP OFFICE IN C21 QUARTERLY AWARDS Century 21 New Zealand has announced its 2021 first quarter winners, which saw Century 21 Gadsby Realty in Te Awamutu ranked as the top office across the country as well as winning some leading sales awards.

Century 21 New Zealand has

won Gold sales awards, and Paul

Bronze awards went to Patrick Barry

Wheeler took away a Silver award.

(Century 21 Premier, Turangi);

Down the road, Christine Stevens of Century 21 Stevens Realty in Mangakino was Top Principal for the Quarter for both GCC and Units. At the same time, Central Auckland’s Winson He of Century 21 Queen

Ria Leung (Century 21 Aurora Real Estate, Riccarton); Kanwar Dhillon (Local Realty, Papakura); Ian Nicholas (Gadsby Realty, Te Awamutu); and Barbara Craig (Rural & Residential Real Estate, Huntly),

Street Realty won Top Salesperson

Property Management Office for

for the Quarter for both GCC and

the Quarter over 250 (the highest

Units. Ms Stevens and Mr He also

number of new managements

won Platinum sales awards.

by an office with more than 250

announced its 2021 first quarter

Other Platinum awards went to Iresh

winners, which saw Century 21

Tennakoon (Century 21 Local Realty,

Gadsby Realty in Te Awamutu

Papakura); Tasreet Dhatt (Century

ranked as the top office across the

21 Fairdeal Realty, Manukau); and

country as well as winning some

Rod Hull (Century 21 Platinum,

leading sales awards.

Tuakau).

“Rebecca Fraser and Paul Wheeler

Gold awards went to Gary Bal

only bought Century 21 Gadsby

and Aman Kaushal (Local Realty,

Realty on Te Awamutu’s Alexandra

Papakura); Fenny Ang (Century

Street in 2019 and then had a

21 Edwards Realty, Botany); Paul

particularly strong 2020. It’s great

Whiteford (Century 21 Gold Real

the well-known Waikato franchise

Estate, Manurewa); Team Chatty

has now taken out the top office

& Bani (Fairdeal Realty, Manukau);

spot for the first three months of

and Ian Pepper (Century 21 Rural &

2021,” says Derryn Mayne, Owner of

Residential Real Estate, Huntly).

Century 21 New Zealand.

Silver awards were won by Deeyana

Gadsby Realty won Top Office for

Amosa (Fairdeal Realty, Manukau);

the Quarter for both (Gross Closed

Derryn Mayne (Gold Real Estate,

Commission) and Units (the number

Manurewa); and Alen Moshi

of properties listed and sold).

(Century 21 The Moshi Group,

Rebecca Fraser and Eli Gadsby also

Wellington Central).

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managements) was awarded to Century 21 Sunrise Realty in Meadowlands, Auckland. Property Management Office for the Quarter under 250 went to Century 21 Premier, Palmerston North, with Emma Bourke of Premier in Palmerston North winning Property Manager of the Quarter.

Ajit Saini of Fairdeal Realty in Manukau received the Quality Service Award, and the Recognition Award went to Mark Lee of Edwards Realty in Botany.

Administration Team Member of the Quarter went to Derrek Chan of Local Realty in Papakura, and Personal/Sales Assistant of the Quarter was awarded to Robyn McGuire of Rural & Residential Real Estate in Huntly.

Photo: Franchise owners Paul Wheeler & Rebecca Fraser in Te Awamutu.

“The first quarter saw two Covid-19 lockdowns in Auckland, tougher deposit requirements taking effect, and a number of measures introduced by the Government targeting investment properties.

Nonetheless our franchises up and down the country had a strong start to 2021. It was great to see our newest office, Fairdeal Realty on Manukau’s Lambie Drive, also Photo: Gadsby Realty team members at the Annual awards in Aukland, Feb 2021

starring in the awards,” says Derryn Mayne.

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P R O P E R T Y M A R K E T U P DAT E

HEINZ DATA SHOWS HIGHEST NUMBER OF PROPERTIES SOLD IN AN APRIL MONTH IN 5 YEARS

BY W E N DY A L E X A N D E R , REINZ ACTING CEO

The number of residential properties sold in April across New Zealand was the highest number of properties sold in an April month for 5 years with 7,218 properties sold, according to the latest data from the Real Estate Institute of New Zealand (REINZ), source of the most complete and accurate real estate data in New Zealand.

For New Zealand excluding

with April 2020 due to the Alert

Median prices for residential

Auckland, it was the busiest April in

Level 4 lockdown and the fact that

property across New Zealand

3 years with 4,627 properties sold.

only 1,389 properties sold in April

increased by 19.1% from $680,000

last year.

in April 2020 to $810,000 in April

Auckland saw the busiest April month in 5 years with 2,591

“While the national picture

properties sold.

represents the busiest April in 5

Other stand out regions included the West Coast 46 properties sold – the strongest sales volumes for an April month in 15 years, Canterbury with 1,076 properties sold - the busiest April month in 14 years and Waikato with 700 properties sold the busiest April month in 5 years.

Excluding April 2020, Otago had the lowest April sales volumes since April 2008, Gisborne had the quietest April month in 7 years and Manawatu/Wanganui had the quietest April in 6 years.

Wendy Alexander, Acting Chief Executive at REINZ says: “Sales volume comparisons on a raw data perspective are unable to be made

years, the reality is that we’ve seen the number of sales decrease when compared to March. While

2021, albeit down from last month’s record. Additionally, 9 out of 16 regions reached record median prices and so did 21 districts – well down on 32 districts last month.

in part this is what we expect to

Median house prices for New

happen when moving from March

Zealand excluding Auckland

to April, there is definitely a wait

increased by 33.5% from $517,000

and see approach from a number of

in April last year to $690,000, a

investors and also some first time

new record high for New Zealand

buyers,” continues Alexander.

excluding Auckland.

“Some of these falls in sales

Auckland’s median house price

volumes are likely to be early signs

increased by 21.6% from $925,000

of the LVRs slowing the market,

in April 2020 to $1,125,000 in April

some will be attributed to the

2021 – a new record for Auckland.

changes announced on 23 March

Additionally, Manukau City reached

and some are likely to be the fact

a new record median high of

that we have the lowest level

$1,070,000 and Franklin District

of inventory for an April month

reached a new record median price

since records began,” continues

of $838,000.

Alexander.

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ANNUAL ME DIAN PRICE CHANGES $

$

48.9%

21.6%

NORTHLAND

AUCKLAND

Record Median Price

$

$

NATIONAL MEDIAN PRICE:

$

TARANAKI

19.1%

$

15.1%

BAY OF PLENTY

37.7%

72.5%

WAIKATO

42.1%

$810,000

27.0%

GISBORNE

46.8%

17.6%

MANAWATU / WANGANUI

29

19.2% $ WELLINGTON

16.9% 27.9%

$

HAWKE’S BAY

NELSON

MEDIAN DAYS TO SELL:

$

46.1%

TASMAN

MARLBOROUGH

22.0%

WEST COAST

CANTERBURY

30.9%

58.8%

SOUTHLAND

$

OTAGO Source: REINZ Monthly Property Report 13 May 2021 .

In addition to Auckland, 8 other

median price in a row. Additionally,

Wendy Alexander, Acting Chief

regions reached record median

Manawatu District ($623,250) and

Executive at REINZ says:

prices. They were:

and Rangitikei District ($451,250)

• Waikato: with a 37.7% increase

reached record median highs

“As we predicted last month, the ongoing lack of supply continues

from $530,000 in April 2020

• Taranaki: with a 42.1% increase

to put upwards pressure on house

to $730,000 in April 2021.

from $380,000 in April 2020

prices. However, we have seen

Additionally, Hauraki District

to $540,000 in April 2021.

some regions start to show signs of

($610,000), Taupo District

Additionally, New Plymouth

prices easing and the rate of growth

($700,000), Thames Coromandel

District saw a new record median

slowing down a little which will be

District ($950,000) and Waipa

of $620,000 – the sixth record

welcome news to those looking

District ($860,000) all reached

median price in a row

to get on the property market.

record median highs

• Nelson: with a 15.1% increase

• Gisborne: with a 72.5% increase

from $645,500 in April 2020 to

from $400,000 in April 2020 to

$743,000 in April 2021

$690,000 in April 2021

• Marlborough: with a 46.1%

• Hawke’s Bay: with a 17.6%

increase from $460,000 in April

increase from $655,000 in April

2020 to $672,000 in April 2021

2020 to $770,500 in April 2021.

Additionally, Napier City reached a new record high of $810,000

• Otago: with a 58.8% increase from $447,000 in April 2020 to $710,000 in April 2021.

• Manawatu/Wanganui: with a

Additionally, Dunedin City

46.8% increase from $395,000

($621,120) and Queenstown-Lakes

in April 2020 to $580,000 in

District ($1,200,000) both reached

April 2021 – the tenth record

a record median high.

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Additionally, it might be the first signs that the re-introduction of the LVRs is starting to have the desired effect.” continues Alexander

Click here to read the full article

DEPOSITS LIFTING

INVESTORS TAKING A DEEP BREATH, BUT PROPERTIES REMAIN A SAFE BET “We’ll definitely see fewer ‘mum and dad’ landlords enter the market with minimum deposits lifting to 40% for investors on the 1st May. It’s a shame because many of them make great landlords who build strong relationships with their tenants,” says Derryn Mayne, Owner of Century 21 New Zealand.

Like others, the real estate boss

effect in February, is also having

deposit rate sitting at barely one

says residential investors are

an impact on investor decision-

percent, when you minus tax and

taking a deep breath following

making.

factor in inflation, there’s no income

the Government’s March housing announcements. Interest tax deductibility was wiped for investors and the bright-line test was extended to 10 years - taxing capital gains.

“Not only is it harder to get into residential investment

or gain there. Residential property, however, will always provide both.

property, but there are many new

“With the autumn market seeing

challenges for existing landlords.

some reticence creeping in, for

Subsequently, we’re seeing small

those Kiwis still willing and able

and large landlords exiting out of

to get into investment property,

Tony Alexander’s Mortgage

residential property. They’re opting

they might be surprised at the

Advisers Survey for April reported

instead to invest in the likes of

opportunities now out there. Let’s

more brokers ‘are seeing less

the sharemarket, managed funds,

not also forget that demand by

business come through the door

commercial property, or even

tenants remains high and rents

from first-home buyers’. At the

syndications promising a

are still very strong,” says Derryn

same time, the survey revealed less

reasonable yield on commercial

Mayne.

investors are seeking mortgage

buildings,” she says.

advice, concluding that policy changes aimed at dampening investor demand for existing properties were having the desired result.

Despite government and Reserve Bank measures to cool off investors, the Century 21 leader says residential property remains a safe bet for those who factor in that one

Ms Mayne says many of Century

day the record-low interest rates

21’s franchises nationwide,

will inevitably rise.

which oversee large property management portfolios, are reporting the Residential Tenancies Amendment Act 2020, which took

“If you put money in the bank these days, you’re sadly going backwards.

With the best 12-month term

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