C21 Market Pulse | February 2024 | New Zealand

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P U L S E

F e b r u a r y

M A R K E T

C21

PUBLISHER Century 21 New Zealand Ltd

CONTRIBUTORS Jen Baird CoreLogic NZ

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February 2024 ISSUE OF

C21 MARKET PULSE

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C O N T E N T S F e b ruary

PROPERTY MARKET UPDATE

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PROPERTY INVESTMENT

Golden weather sees confidence lift

What are the most important factors to consider

CEO REINZ, Jen Baird

when purchasing an investment property?

SELLING PROPERTY

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BUYING PROPERTY

Does styling your home when selling make a

First home buyer market share sets new record

difference?

CoreLogic NZ

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

GOLDEN WEATHER SEES CONFIDENCE LIFT

BY J E N B A I R D, REINZ CEO

According to the Real Estate Institute of New Zealand (REINZ), January 2024 has seen slower sales and a significant increase in the number of property listings available. This shows confidence from sellers while warming up buyers with a greater choice of property to choose from.

According to the Real Estate

including the bigger markets of Bay

year, including the cost of living,

Institute of New Zealand (REINZ),

of Plenty, Waikato, and Northland,

inflation, interest rate changes,

January 2024 has seen slower

had higher sales counts this January

and government reforms, mean

sales and a significant increase

compared to January 2023.

some buyers remain cautious.

in the number of property listings available. This shows confidence from sellers while warming up buyers with a greater choice of property to choose from.

The national median sale price has slightly decreased from December 2023, down 2.5% from $779,830 to $760,000. Year-on-year, there is a slight decrease in the national

However, most regions are reporting more buyer activity across the board, with some seeing a particular surge in first-home buyer interest. Vendors are also being confident but realistic with

"January is usually a slower month

median price by 0.7% from $765,000

for the completion of sales in

to $760,000, while New Zealand,

New Zealand and this year is no

excluding Auckland, is down by 2.1%

exception with 2,995 properties

month-on-month (from $700,000 to

being sold. While this is 4.9% more

$685,000) and up year-on-year by

than January 2023, the increase in

0.8% (from $680,000 to $685,000).

in the year,“ adds Baird.

listings is a stronger indicator that the

The data shows regional variation in

“With changes to the debt-to-income

market continues to pick up. Listings increased by 10.4% nationally and 5.4% for New Zealand, excluding Auckland, year-on-year. The biggest increases in listings compared with the previous month were seen in Wellington at 148%, followed by Gisborneat84%”,Canterburyat81%, and Auckland at 76.8%, says Baird.

The total number of properties sold

median sale prices, with Northland topping the scale with a 21% increase

prices as activity increases over the summer months. This is likely to resolve in inventory moving over the coming more active months

ratios coming, REINZ data will be helpful indicators for buyers to see

month-on- month from $630,000

when to buy in a developing market.”

to $762,000, and a 10.8% increase

One area of significant change that

year- on-year from $687,500 to

has widespread support across the

$762,000. Meanwhile, Auckland’s median sale price has fallen under the $1 million mark again this month, for the fifth time in a year, to $975,000 – however this is still

property sector is the Residential Property Managers Bill. This regulation provides much-needed structure to a sector that collects rent from 670,000 tenants and manages billions

increased in January, rising by 16.0%

3.4% more than a year ago.

year-on-year for New Zealand,

“Despite the wave of listings favouring

Zealanders. As disincentives are

buyers, the challenges of last

removed, this is important regulation

excluding Auckland. Ten regions,

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of dollars in assets for everyday New

ANNUAL ME DIAN PRICE CHANGES

10.8%

3.4%

NORTHLAND

AUCKLAND

NATIONAL MEDIAN PRICE:

$760,000

BAY OF PLENTY

-1.4%

-0.7%

GISBORNE

-2.2%

TARANAKI

50

0.7%

-23.7%

WAIKATO

-2.0%

MEDIAN DAYS TO SELL:

2.2%

3.0%

MANAWATU / WANGANUI

HAWKE’S BAY

-0.7%

NELSON

11.2% -2.9%

WELLINGTON

2.5%

TASMAN

MARLBOROUGH

1.0%

WEST COAST

CANTERBURY

8.8%

2.2%

SOUTHLAND

OTAGO Source: REINZ Monthly Property Report 14 February 2024.

to monitor as it may change market

previous month and a 2.2% increase

activity, inviting investors back or to

for the same period last year.

refresh their portfolios, making more

The average annual growth in the

housing available for those who are

New Zealand HPI over the past five

not in the market,” comments Baird.”

years has been 6.0% per annum, and

“2024 is shaping up to deliver a series of changes and shifts in dynamics

it is currently 14.4% below the peak of the market in 2021.

for the market. The property sector is expecting the new government to make good on its promises to reduce the bright line back to two years and reintroduce interest deductibility on investment properties, changing

Click here to read the full report

the dynamics of the property market again.”

The HPI for New Zealand, which stood at 3,660 in January 2024, showed a 0.4% increase compared to the C21 MARKET PULSE

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KNOW YOUR PROPERTY’S VALUE IN AN INSTANT Access an instant property report now.

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C21.co.nz/property-report/

SELLING PROPERTY

DOES STYLING YOUR HOME WHEN SELLING MAKE A DIFFERENCE? When putting your home on the market, it’s important to consider first impressions and audience appeal. This applies whether someone sees your listing in person, online or in print.

you stand out in a crowded market

period can be challenging.

and identify the latest trends.

Sentimental attachments to

So, what are some key things to consider?

The extent to which your home is styled before putting it up for sale can vary depending on the stylist you’re working with. Some opt for minimal interventions, adding select

As some real estate agents say, ‘you

pieces to complement existing

are only fresh once’. Therefore it’s

furniture. Others will advocate for

always a good idea to show your

a complete overhaul to give the

property in the best light possible.

property a fresh look. It’s best to

It’s been found that investment in styling for a property brings in a 10 to 15% return over initial spend. It

collaborate with both the stylist and

inherited furniture or knick-knacks may cloud your objectivity. A stylist's role is to declutter, remove items as needed, and ensure each room showcases its best features.

Styling costs depend on the home's size, location and value. Real estate agents should have a list of stylists they’ve worked with previously but an online search can help you identify a reputable stylist in your local area.

your real estate agent to ensure the

Quality photographs are crucial,

best result is achieved.

especially for listings featuring

may also sell quicker. A professional

Emotionally detaching from a home

with experience in styling helps

you've lived in for an extended

'fly‑through' or video tours. There are so many potential buyers researching properties in their chosen areas online so it's important to have everything in place to showcase the property to its maximum advantage. ​​Empty spaces can sometimes look much smaller than those that have furniture in them, and rooms that are properly staged can look much bigger!

The goal is to have an emotional pull on buyers who are coming to see your property. You want the buyer to feel good, just like when you walk into a beautiful hotel room or restaurant.

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PROPERTY INVESTMENT

WHAT ARE THE MOST IMPORTANT FACTORS TO CONSIDER WHEN PURCHASING AN INVESTMENT PROPERTY? Investing in real estate can be a great way to generate passive income and build wealth over time, but it's important to do your research and understand the market before making any investment decisions.

each year. Aim for a rental yield

best type of property for you

of at least 4-5% to ensure that you

will depend on your investment

are generating a positive return on

goals and budget. Houses are

your investment.

generally a good option for

• Capital growth potential:

investors who are looking for

Capital growth is the increase

capital growth and rental income,

in the value of your property

while apartments can be a good

over time. Choose a property

option for investors who are

with good capital growth

looking for a lower-maintenance

potential to maximise your

investment and a good rental yield.

return on investment. Factors Here we review some key factors

Commercial properties can be

to consider include the location

to consider when purchasing

a good option for investors who

of the property, the demand for

an investment property in

are looking for a higher rental

housing in the area, and the future

New Zealand:

yield, but they also come with

outlook for the New Zealand

• Location: The location of

property market.

your investment property is crucial. Choose a property in a desirable area with high rental demand and potential for capital growth. Consider factors such as proximity to amenities, employment opportunities, population growth trends, and future infrastructure development plans.

• Rental yield: Rental yield is the percentage of your investment that you can expect to earn in rent

a higher level of risk.

• Property condition: Choose an

• Affordability: Make sure that

investment property that is in

the investment property you

good condition and does not

choose is within your budget,

require any major repairs. This will

taking into account the purchase

help to minimise your ongoing

price, mortgage repayments,

maintenance costs and maximise

insurance, and other ongoing

your rental income.

costs. It's also important to have

• Tenant quality: Good tenants

a financial buffer in place to cover

are essential for a successful

unexpected expenses.

investment property. When

• Property type: There are

choosing a property, consider the

different types of investment

potential tenant pool. Look for

properties available, such

a property in an area with a good

as houses, apartments and

mix of tenants, such as families,

commercial properties. The

professionals and students.

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• Property management: If you do

income tax on your rental income,

your investment goals, you can

not plan to manage the property

land tax, and capital gains tax if

choose a property that is aligned

yourself, you will need to factor

you sell the property at a profit.

with them.

in the cost of hiring a property

Be sure to factor in these costs

manager. Property managers

when calculating your potential

can take care of tasks such as

return on investment.

finding and vetting tenants,

• Your investment goals: Consider

collecting rent, and dealing

your investment goals before

with maintenance issues.

purchasing an investment

• Taxes and other costs: There

property. Are you looking for

are a number of taxes and other

a short-term or long-term

costs associated with owning

investment? Do you want to

an investment property in

generate passive income or build

New Zealand. These include

capital growth? Once you know C21 MARKET PULSE

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By carefully considering all of these factors, you can increase your chances of making a successful investment.

BUYING PROPERY

FIRST HOME BUYER MARKET SHARE SETS NEW RECORD

BY CORELOGIC

Interest rate hikes and turbulent property market conditions through 2023 did little to deter first home buyers (FHB), whose market share hit a new record high at 27% in the final months of the year.

Figures from the CoreLogic January

purchases has been higher in

the past month or two, so they're

Housing Chart Pack shows FHB

the past, but relative to other

definitely a buyer group to watch

activity hit 27% in December and

buyers they are still showing

as the market enters a new cycle.

in quarter four overall, taking their

some strength. FHBs accounted

total market share for 2023 to

for approximately 17,000 property

25.8%, well above the previous peak

purchases in 2023, up from 14,500

of 23.1% in the 2021 calendar year.

purchases in 2022.

CoreLogic NZ Chief Property

Mortgaged multiple property

and the prospect of caps on debt

Economist Kelvin Davidson said

owners (MPOs, including investors)

to income ratios later in the year.

FHBs may have been the biggest

had a quiet 2023 – with only about

As property tax changes kick in with

property market success story

14,000 purchases or 21% of activity,

deductibility restored to 80% from

of 2023.

both the lowest on record back

1st April, it will be interesting to see

to 2005.

how investors’ demand responds,"

"This is the first time FHBs have

Relocating owner-occupiers

groups," Mr Davidson said.

(movers) are also relatively quiet

for their relative resilience, but key factors include access to KiwiSaver

compared to past standards, with just 25% of activity over the fourth quarter of 2023.

to boost the deposit, a willingness

Mr Davidson said with loan to value

to compromise on location or

ratio restrictions still biting, gross

property type, the ability to tap the

rental yields low, mortgage rates

low deposit lending speed limits

high, and the interest deductibility

at the banks, and less competition

rules still against them, it’s not too

from other buyer groups,"

surprising that investors’ purchasing

Mr Davidson said.

activity has softened.

Despite hitting a record share

"That said, their market share

of purchases, the number of

has just started to edge higher in C21 MARKET PULSE

recovery is set to continue in 2024, but could be a little underwhelming, given still-high mortgage rates

ever out bought other buyer

"There are a number of reasons

"Looking ahead, the overall property

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he said.

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