• REINZ Press Release – Spring Sales Surge around the Country
o Annual Median Price Changes
o Market Snap Shot
• REINS Property Report 14 Nov 24 (October Data) withlink
• REINZ House Price Index Report (HPI) 14 Nov 24 (Oct Data) withlink
• Realestate.co.nz o Optimism
in the housing market (Liz Studholme)
Hi
Residential Property Market Update
25November2024
The property market is showing early signs of stabilisation, marked by a rise in buyer enquiries following a recent interest rate cut while realestate.co.nz saw a substantial 17.1 percent increase in residential sale enquiries following the last OCR Reduction.
Stock levels have climbed to over 32,000 properties—marking the highest number for this month for the month of October in a decade and a 26.3 percent increase compared to the same month last year. While high inventory levels may suggest increased competition among sellers, they also provide an advantageous environment for buyers who can now explore a wider range of options.
Stability in property prices has been an encouraging development amidst the wider market shifts. Over the past two years, the national average asking price has remained between $850,000 and $890,000, offering a rare level of predictability for both buyers and sellers.
In October, the average asking price stood at $856,981, representing a 3.0 percent year-onyear decrease and a slight 1.5 percent drop from September. Such minimal fluctuations can signal a more stable environment where drastic price movements are less likely.
Recently, both the US Federal Reserve and the Bank of England moved to cut interest rates and we’re all anticipating a similar response from the Reserve Bank of New Zealand, which is expected to announce further rate reductions on 27 November. If a rate cut occurs, we anticipate a boost in buyer confidence and market activity, paving the way for a more balanced property market as we head into 2025.
• As the holiday season draws near, and you know what that means – Santa Claus and his eight faithful reindeer are gearing up for their grand tour!
Just like when it comes to selling your home, you can never start getting organised too early for Santa’s visit. While Santa will be in a rush, as he has many homes to visit on that one night, you might want to make a few precautions to protect your home and furniture.
To guarantee a seamless and enjoyable visit for Santa and his furry friends, let's explore some festive and practical tips to make your home the most welcoming stop on their journey.
Starting with the great outdoors
Reindeer-ready roof
Make sure your roof is sturdy enough to handle Santa's sleigh and the dance of eight sets of hooves. Check shingles for security and repair any damage for a smooth take-off and landing.
Trim overhanging branches to create a hazard-free runway. After all, reindeer have a big job ahead, starting their journey right here in New Zealand.
Chimney check
Take a look at those chimney bricks and the flue and make sure it’s sturdy – we don't want any unexpected bumps on Santa's head.
Keep that chimney clean to avoid turning Santa into a soot-covered gift. And, if your roof isn't quite sleigh-sized, don't worry – Santa's got ways to make it work.
Decorative considerations
Ensure your festive decorations don't turn into obstacles for Santa's grand entrance. Lights and inflatable Santas should take a backseat to ensure a smooth landing for the reindeer.
Now,
let's venture indoors
Chimney maintenance
Clean that chimney to keep Christmas morning mess-free. An immaculate chimney ensures both Santa and your home stay soot-free.
And remember, keep that damper open – we're avoiding any "Santa gets stuck" scenarios!
Furniture protection
Shield your furniture from ashes and soot, either by relocating it or covering it up. A tidy home not only impresses Santa with your housekeeping skills but also eliminates tripping hazards.
Pack away those toys, secure loose Christmas light cords, and you're good to go.
Stocking safety
Hang those stockings with care using alternatives like command hooks or twine. Let's avoid unnecessary holes and show those stockings can hang anywhere sturdy enough to hold those treats from Santa.
For those without chimneys or in apartments
No chimney? Short on space? No problem! Opt for a Christmas tree alternative – create a designated "Santa Zone". A beautifully decorated table or a festive basket works wonders. Keep it well-lit to guide Santa straight to the heart of your holiday haven.
Advice on treats
Keep those treats out of reach from pesky possums and mice. Don't forget the reindeer –leave some carrots or apples, and water too! After all, even reindeer get thirsty after a long journey.
Post-visit tips
Christmas is a time of the year many of us look forward to, but if Santa makes a little mess, you will want to clean it up. If he has left soot marks from the fire on the carpet, use baking soda or corn flour to easily clean it.
Get the vacuum cleaner out for any leftover crumbs sure proof that Santa and the reindeer enjoyed their snacks.
Outdoor cleanup? Check the roof for reindeer "gifts" – they make excellent fertiliser for your garden. And don't forget to check those gutters for any unexpected surprises.
By following these detailed yet cheerful tips, your home is sure to be Santa-ready, ensuring a magical and smooth visit for all.
May your house be a beacon of holiday cheer, hosting a jolly old elf with a belly that shakes like a bowl full of jelly. Wishing you a "Happy Christmas to all and a good night!"
Note: References for this blog post were taken from "A Visit from St. Nicholas", more commonly known as "The Night Before Christmas", poem by Clement Clarke Moore. Highly recommended Christmas Eve book to read to kids before tucking them in before bed before Santa's arrival.
Please don't hesitate to contact ourteam who can ably assist you withany property management mattersyou may have or if you have anyquestions about anything in the newsletter or property managementin general.
RECENT PROPERTY MANAGMENT TESTIMONIALS
Debbie
Harrison - Property Manager
We are writing to express our sincere and heartfelt gratitude and appreciation to Debbie Harrison who has been managing our rental property for nearly 3 years.
Over this time we have found Debbie to be very passionate about property management and she is fair and firm when dealing with tenants as well as us as property owners.
Debbie is highly professional, yet friendly in her approach. She has efficient communication skills and always keeps us in the loop of the rental market.
Debbie has been very instrumental in guiding us through our investment journey with her up-to-date knowledge of the industry. With our property being over 40 years old, which often requires maintenance,
Debbie with her comprehensive skill set, has managed every maintenance process in the most efficient and cost effective manner to ensure we remained RTA compliant.
We are truly thankful for Debbie being our Property Manager. She is reliable and loyal and we would absolutely and highly recommend her services to anyone who wishes to find the best person to manage their property.
Sabnesh & Renita.
Residential Landlord
Brent Worthington - Principal & Licensed Agent
Brent and his amazing team have been working with us as our property manager on a number of our properties.
Right from the start they walked us through the process, making sure we understood everything needed, putting our minds at ease.
Everything was straight forward, communication is very fast and transparent and we feel very supported and will continue to use Brent and his team.
Aku & Elaine.
Residential & Commercial Landlords.
Town&Country
Reports, Surveys& Commentaries
Published 14 November 2024
Spring has officially arrived and has brought a wave of positivity and optimism to New Zealand’s property market, the latest figures from the Real Estate Institute of New Zealand (REINZ) reveal.
As we recover from a subdued market, October proved to be a more positive month, with increases in sales and ever so slight increases in median prices.
“There seems to be light at the end of the tunnel. Although challenges like the cost of living remain, positive signs are emerging. Falling interest rates, increased inventory in the market, and greater activity during open home events are all reflected in the data for October,” explains Chief Executive Jen Baird.
On the sales front, total properties sold nationally increased by 20.0% compared to October 2023. Sales for New Zealand, excluding Auckland, rose 22.7% year-on-year, with notable increases in Nelson (+112.8%) and Marlborough (+29.5%).
“Salespeople are seeing more confidence among vendors and buyers now we’re into spring, and this shows signs of a busier market leading up to Christmas,” adds Baird.
The national median price increased by 0.7% year-on-year, from $789,500 to $795,000; month-on-month, it increased by 1.9%, from $780,000. Excluding Auckland, the median price rose 2.9% year-on-year from $690,000 to $710,000 and increased 2.2% from $695,000 compared to October 2024.
Regionally, ten out of sixteen areas reported an increase in median prices over the past year, with Marlborough leading at an impressive 18.3% increase to $769,000. The West Coast followed closely with a 14.7% rise yearon-year to $390,000. Month-on-month changes also revealed significant increases in Marlborough (10.6% from $695,000) and Manawatu-Whanganui (10.0% to $550,000).
“The New Zealand property market is experiencing a dynamic shift. While median prices are gradually catching up, local salespeople note that some buyers remain cautious about overpaying for properties due to relatively high interest rates. This environment encourages buyers to be more strategic in their approach, making them feel confident in negotiating with vendors to reach an agreeable price,” adds Baird.
New listings also surged, continuing the trend since the beginning of 2024, with every month this year showing a higher number of listings than the same month in 2023. Thirteen out of fifteen regions reported increases compared to last year. The two regions that didn’t were Southland and Northland, which both had a 0.0% change year-on-year. The regions that experienced the highest rise of listings were Gisborne (+103.6%), Canterbury (+40.6%), and West Coast (+40.0%).
Overall, listings nationally increased by 21.4% to 11,572, and New Zealand (excluding Auckland) increased by 22.2% year-on-year to 7,469. Inventory levels are also climbing; national inventory grew by 26.3% year-on-year and 7.7% month-on-month to reach 32,339 properties available for sale.
Baird notes that the increase in available properties provides buyers with the opportunity to explore a diverse range of options that better align with their individual needs and preferences, allowing them to take their time shopping around.
In October, there were 1,191 auctions nationally (17.8% of all sales), an increase from 899 (16.1%). The national median days to sell rose by four to 42 days compared to last year; excluding Auckland, it increased from 39 days in October 2023 to 43 days this month.
The House Price Index (HPI) for New Zealand stood at 3,616—a decrease of 1.1% year-on-year but an increase of 0.5% month-on-month. Over the past five years, the average annual growth rate for New Zealand's HPI has been approximately 4.8%, although it currently sits at 15.4% below its peak in 2021.
The Real Estate Institute of New Zealand (REINZ) has the latest and most accurate real estate data in New Zealand.
REINZ October 2024 data: Spring Sales Surge Around the Country
14 November 2024
14 November 2024
Written by Liz Studholme
October 2024 - The recent OCR cut and easing interest rates appeared to mark a turning point for the New Zealand property market, sparking renewed interest among buyers. Following last month’s OCR drop, buyer enquiries surged, signalling confidence from Kiwis actively looking for new homes.
• Highest October stock levels in a decade, up 26.3% year-on-year
• 22 months of price stability offers rare certainty for buyers and sellers
Yet, high stock levels suggest cautious optimism from buyers prevails. In October, stock levels hit an unusual peak, with over 32,000 properties available nationwide—a 26.3% increase year-on-year and a 7.7% rise from September.
Sarah Wood, CEO of realestate.co.nz, noted that while optimism is creeping back, factors like interest rates and job security are tempering purchase behaviour: “While buyer activity is climbing, economic factors are keeping some would-be buyers on the sidelines.”
Residential sale enquiry increased by 17.1% post the recent OCR announcement vs the period prior (09/10/24 – 27/10/24 vs 20/09/24 – 08/10/24)
October’s housing stock reaches 10-year high: 32,000 homes now on offer
National stock levels were the highest recorded for a month of October in almost a decade. While higher stock levels in October are typical as the spring selling season ramps up, these levels reflect trends we haven’t seen since 2014 and 2015.
“Buyers had more to choose from last month than they’ve had during an October for nearly a decade,” said Wood.
All regions saw positive stock growth both month-on-month and year-on-year, with the majority showing double-digit annual increases. The biggest year-on-year increases in stock were in Gisborne (up 81.2%) and Wellington (up 52.9%). Only Northland, Taranaki, Nelson, and Southland recorded single-digit growth.
According to Wood, early signs of market movement are beginning to show even if stock isn’t selling through yet:
“We can see buyer sentiment changing with the amount of time properties are staying on the site. Properties listed for less than 30 days increased from 23.9% in September to 27.9% in October meaning that stock is moving faster, and interest is warming up.”
Nearly two years of stable prices offer buyers rare predictability
The abundance of stock, along with stable asking prices, is creating favourable conditions for those in a position to buy.
For 22 months, the national average asking price has remained steady, fluctuating only between $850,000 and $890,000, providing rare market predictability. At $856,981, our national average asking price was down 3.0% year-on-year and 1.5% month-on-month during October.
The absence of significant price fluctuations also extended around the country, with most regions seeing changes of less than 10% in their average asking price compared to 2023.
Otago, Southland, and the West Coast were the only regions to see both month-onmonth and year-on-year growth in asking prices. At the other end of the spectrum, Auckland, Bay of Plenty, Central North Island, Hawke’s Bay, Northland, Waikato, and Wairarapa all saw declines over both timeframes.
The West Coast saw the biggest year-on-year increase to its average asking price, up 14.3%, while Wairarapa recorded the steepest decline, down 12.1% compared to last year. “Both are smaller markets and tend to be more prone to fluctuation,” noted Wood.
NZ HedonicHome ValueIndex
EMBARGOED:12:01am,Friday,1October2024
Slowingrateofdeclinesignalspotentialvaluefloor
PropertyvaluesinNewZealandfell-0.5%inOctoberaccordingtoCoreLogic'shedonicHomeValueIndex(HVI) - the eighth dropin a row- takingthe totaldecline in valuessince Februaryto -5.1%.
Aroundthe main centres,Te Whanganui-a-TaraWellington droppedby -1.2%in October,with both Kirikiriroa Hamilton and Tāmaki MakaurauAucklanddownby -0.7%.ŌtepotiDunedin’sfall wasslightly smaller (-0.4%),while Taurangawasflat in October,and ŌtautahiChristchurchedgedupby 0.2%.
AlthoughthepropertymarketremainedrelativelysluggishinOctober,thepaceofdeclinehasroughlyhalvedinthepast coupleofmonthsafteran averagefall of around-0.9%from Mayto August.
““The latestfall in national home valuessuggeststhateventhoughmortgagerateshave already droppedquite sharply,the influence of joblossesandthe widerfeelingsof reducedjobsecurity are playingthe more importantrole atpresent.This was echoedin the latestANZ consumerconfidencesurvey.That said,it’s notall one-waytraffic for propertyvalues,with Ōtautahi Christchurchcontinuingto showrelative resilience amongstthe main centres,alongsideTaurangain October.”
“It’shardto provecategorically, butthere’scertainly a‘vibe’ outthere thatThe Garden City is still consideredan attractive place for people outsidethe areato relocateto, driven by both lifestyle andaffordability.”
“There hasalso been achangein the on-the-groundmoodaround AotearoaNZ’swiderproperty marketin the pastfewweeks.That shifthasbeenseen acrossa range of segments,from propertyvaluers to individual investors,to developersandconstruction industryconsultants.”
“Rising sentimentmaytake some time to hit the ‘harddata’,but there’sasensethatthe endcould be in sightfor the recentdownturn.”
“For propertyinvestorsin particular the falls in mortgageratesare key, flowingdirectly throughto better cashflowon atypical rental purchase- or in otherwords reducedlosses–andsmaller topupsfrom otherincome.Increased interestdeductibility supportsthat effecttoo.”
CoreLogic HVI – Main Centres
IndexresultsforOctober2024–nationalandmaincentres
Ōtepoti
NZ Hedonic Home Value Index
TāmakiMakaurauAuckland
Each of Tamaki MakaurauAuckland’ssub-marketssawpropertyvaluesdecline in October,althoughthe falls in PapakuraandFranklin were marginal (-0.1%).Elsewhere,the falls rangedfrom -0.4%in Rodney,up to -0.8%in Auckland City and-0.9%in Manukau.
Generally speaking,valuesacrossTamakiMakaurauAucklandare still around21-24%lowerthanthe post-COVIDpeak (apartfrom a dropof closerto 26% in Waitakere),while the falls since the more recent‘mini peak’atthe startof this yearhavetypically beenbetween-7%and-9%.
MrDavidsonadded:“Auckland’sproperty marketcontinuesto be weigheddownby abundantsupply,both in termsof existing propertieslisted forsale aswell asthe continuedpipeline ofnew-buildsbeingcompleted.However,thereare signs in amarketsuch asPapakurathatvalueshavestartedto flatten outto some degree,so it’ll be interestingto see if the falls also lessenor stopaltogetherin otherpartsof the super-cityin the nextfew monthstoo.”
Te Raki Paewhenua
TeWhanganui-a-TaraWellington
The wider Te Whanganui-a-TaraWellington areaunderperformedin October,with Poriruadown by -0.5%,andthen the falls increasingto -0.7%to -0.8% in the HuttValley, andto morethan1% in both Kapiti CoastandWellington City itself. Poriruahasbeenslightly more resilient thanelsewhereoverawiderthree-monthhorizon –while acrossthe restof Wellington, valuesare downby close to 3% or more since July.
"Wellington looksto be agoodexample of wherejobinsecurity is outweighingthe benefitsto sentimentand households’financesof lowermortgagerates.This couldalso makeit aninterestingtestcasefor property values,in termsof the strengthof any recoveryin 2025amidstthe backdropof labour marketweakness.”
Te Awa Kairangi ki Uta
Te Awa Kairangi ki Tai
Regionalresults
Reflectingthe counteractinginfluencesof lowermortgageratesandjoblosses,propertyvalue trendsacrossmany of the provincial marketsremainedpatchyin October.Nelson,Whanganui,Rotorua,andGisborne all edgedhigher, while Queenstownwasstable.Butvalue falls of -0.7%or more wereseenin Invercargill, Whangarei,andNapier.
“Puttingaside the normalmonthly variability thatyou seein any partof the cycle, it’sinterestingto note the recent divergencesoverthe yearasa whole,” MrDavidsonnoted,pointing to areassuchasNapierandWhangareiwhichwere downby -7% to -9% since the latestmini-peak,comparedto WhanganuiandInvercargill, which weredownby -1to2%.
“Lowerhousepricesin the latter two areasmay havegiven their marketssome insulation.Ofcourse,the affordability argumentcertainly doesn’tapply in somewherelike Queenstown,wherethe markethasonly fallen slightly in 2024 despite amedian value of $1.5m.”
NZ Hedonic Home Value Index
Te Papa-i-Oea
Propertymarketoutlook
Lookingahead,although the recentdownturnin propertyvaluesacrossmanyparts ofthe countryseemsto be slowing andcouldbe almostover,the chancesofa sharporsuddenboom still seemrelatively low, accordingtoMrDavidson.
“In addition, the stockofavailable listings on the marketremains atmulti-yearhighs,andthis will takesometime to dissipate,especially with asolid numberof new-buildsstill being completed.”
“Ontop ofthat, the weaknessof the underlyingeconomysuggeststhatthelabourmarketmaynot bottomoutfor a while yet,continuingto dampen the influence oflowermortgagerates.Although banks’serviceability testratesmay well continueto trenddownwards–which wouldraise households’borrowingcapacity– the counteractingforce of debt-to-incomeratio limits couldalso becomeamore noteworthyfactorin 2025.”
Putsimply, amodestupturn forpropertysales andvaluesacrossAotearoaNZ looksfairly likely in the next 12-18months, while somethingakin to the post-COVIDboomisn’ta plausible centralscenarioat thisstage.
For more property market news and insights:www.corelogic.co.nz/news-research
CoreLogic is the largest independent provider of property information, analytics and property-related risk management services in Australia and New Zealand.
Methodology
The CoreLogicHedonicHome Value Index (HVI) is calculatedusinga hedonicregressionmethodologythat addressesthe issueofcompositionalbias associatedwith median price andothermeasures.In simple terms, the index is calculatedusingrecentsales datacombinedwith information aboutthe attributes ofindividual propertiessuchas the numberofbedroomsandbathrooms,landareaandgeographicalcontextofthe dwelling.By separatingeach propertyinto its variousformationalandlocational attributes,observedsales valuesfor eachpropertycan be distinguishedbetweenthoseattributedto the property’sattributesandthose resultingfrom changesin the underlyingresidentialproperty market.Additionally, by understandingthe value associatedwith eachattribute of agiven property,this methodologycan be usedto estimatethe value of dwellings with knowncharacteristicsfor whichthere is no recentsales price by observingthe characteristicsand sales pricesof otherdwellings whichhave recentlytransacted.It then follows thatchangesin the marketvalue ofthe entire residentialproperty stockcan be accuratelytrackedthrough time.
The detailed‘frequentlyaskedquestions’andmethodologicalinformationcanbe foundat: https://www.corelogic.co.nz/our-data/hedonic-index
CoreLogicis able to produceaconsistentlyaccurateandrobustHedonic Index due to its extensiveproperty relateddatabase,which includes transactiondataforeveryhome sale in everyregion andterritorial authority. CoreLogicaugmentsthis datawith recentsalesadvice from real estateindustryprofessionals,listings information andattribute data collectedfrom avariety ofsources.
The resultscan be shownin index form andas a median dollar value.The median value is themiddle estimated value ofall residential propertiesderivedthroughthe hedonic regressionmethodologythatunderlies the CoreLogicHedonic HomeValue Index.
Town&Country
Country Update
September 2024: REINZ Reports Lifestyle Property Market on the Rise 30 October 2024
Data released rcenlty by the Real Estate Institute of New Zealand (REINZ) shows that in the three months ending September 2024, there were 1,400 lifestyle property sales, an increase of 45 sales or 3.3% compared to the previous three months. This represents an 11.8% rise from 1,252 sales during the same period in 2023.
Over the year leading up to September 2024, 5,699 lifestyle properties were sold, 234 more than the year ending September 2023, marking a 4.3% increase. The total sales value of these properties sold was $6.34 billion.
The median price for all lifestyle properties sold in the three months leading up to September 2024 was $945,000, an increase of $35,000 compared to the same period in 2023, or 3.8%. The median price for Bareland lifestyle properties was $450,000, a slight increase of $500 or 0.1% compared to 2023.
Similarly, for Farmlet lifestyle properties, the median price in the three months leading up to September 2024 was $1,050,000, showing an increase of $27,196 compared to 2023, a 2.7% rise.
“The September sales results reflect a continuation of the positive momentum in the market as we approach spring. The recent reduction in interest rates and indications of further decreases are boosting buyer confidence. This positive trend is expected to persist throughout the spring and summer selling season, leading up to Christmas,” commented REINZ Rural Spokesperson Shane O’Brien.
Seven regions recorded an increase in sales compared to September 2023, with Northland (+63 sales) and Waikato (+42 sales) observing the biggest increases. Taranaki (-18 sales) and Bay of Plenty (-8 sales) recorded the biggest decreases in sales in the three months to September 2024 compared to the three months to September 2023. Compared to the three months to August 2024, 8 regions recorded increased sales.
Ten regions saw the median price of lifestyle blocks increase between the three months ending September 2023 and the three months ending September 2024. The most notable examples were in the West Coast (+74.3%) and Taranaki (+21.2%), with the most significant decreases being in Auckland (-4.5%) and Nelson/Marlborough/Tasman (-2.7%).
The median number of days to sell for lifestyle properties was 18 days more in the three months to September 2024 than in the three months to September 2023, sitting at 95 days. West Coast (65 days) recorded the shortest number of days to sell in September 2024. Auckland (114 days) recorded the longest number of days to sell.
“Buyers have access to a good selection of listings across all markets, and the upward trend in median sale prices for both Farmlets and Bareland is encouraging. However, the increase in the average days on the market suggests that buyers are still cautious when purchasing,” comments O’Brien.
Real Estate Institute of New Zealand 25 November 2024
Median Prices Climb as Lifestyle Property Sales Increase
The latest data from the Real Estate Institute of New Zealand (REINZ) highlights notable trends in the lifestyle property market. In the three months ending October 2024, 1,360 lifestyle properties were sold—an increase of 13.8% compared to the same period in 2023 but a slight dip of 4.2% from the preceding three months ending September 2024.
Year-on-year, the growth in sales is significant. Over the year to October 2024, 5,787 lifestyle properties changed hands, a 6.3% rise compared to the year ending October 2023. The total value of these transactions reached an impressive $6.45 billion, underlining the continued appeal of lifestyle properties.
The market has also shown resilience when it comes to prices. The median price for all lifestyle properties sold in the three months to October 2024 climbed to $960,000—a 3.2% increase from the same period in 2023. For specific property types, the trends were similar. Bare land lifestyle properties recorded a median price of $450,000, up by 2.9%, while Farmlet properties surged to $1,080,000, reflecting a 3.3% rise.
Shane O’Brien, Rural Spokesman at REINZ, commented, “The lifestyle market has been active across most regions as we approach the summer selling season in the lead-up to Christmas. Agents are reporting strong enquiries with good numbers at open homes, with many also noting multiple offers at auctions or when sales close. Buyers generally have a good selection of properties, with strong listing numbers available Additionally, agents report continued interest in some regions from buyers from Auckland and Wellington.”
Eight regions experienced an uptick in sales compared to the three months ending October 2023, with Northland and Waikato leading the way, reporting 69 and 57 additional sales, respectively. On the flip side, the West Coast and Taranaki saw the sharpest declines, with sales down by 11 and 8, respectively.
The median price for lifestyle blocks surged in 10 regions between the three months ending October 2023 and the three months ending October 2024, with Nelson/Marlborough/Tasman seeing a remarkable 12.9% increase and Manawatu-Whanganui close behind at 12.8%. However, not all regions shared in the gains; the West Coast and Otago saw prices drop by 15.0% and 10.7%, respectively.
The pace of sales has slowed compared to last year. The median number of days to sell a lifestyle property now stands at 98 days—20 days longer than in the three months to October 2023. Canterbury remains the fastestmoving market, with properties selling in just 71 days, while Nelson/Marlborough/Tasman recorded the longest time at 134 days.
“The Canterbury markets are continuing to expand with available land, which mirrors the ongoing urban growth in the Waimakariri and Selwyn districts. Strong interest from outside the province continue to help drive sales activity in this area. However, this is not unique to Canterbury at this time, with areas such as Hawke’s Bay, Nelson, and Central Otago also reporting promising enquiries, but this has yet to materialise into confirmed sales,” concludes O’Brien.
Despite regional variations and extended selling periods, New Zealand’s lifestyle property market remains a dynamic sector, showing steady value growth and resilience in the face of shifting conditions.
Town&Country
Finance & Lending
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Consumer Spending Plans Improve
My monthly survey of people’s plans for spending more or less on “stuff” over the next 3-6 months has just produced its strongest result since the end of 2021. A net 0% exactly of the 672 respondents in this month’s survey have said they plan spendingmore.Last month this wasa net5% planning to spend less and back in June a net 42% planned to cut back on their expenditure.
As this first graph shows we are not back into the positive territory of 2020-21. But the improving trend over the past five months is impressive and illustrates the way that Kiwis are highly sensitive to changes in interest rate expectations.
In fact, the gross proportion of people saying they will cut spending because they want to get their debt levels down has fallen to just 17% from 29% in June. This result suggests an acceleration in household debt growth lies just ahead and that would gel with data showing the residential real estate sector picking up.
14 November 2024
A few more people this month have reported that theyarespendinglessbecauseof job worries. But in line with the results from my real estate survey when I ask agents about the things people are concerned about, this result shows the peak in employment worries happened 3-4 months ago.
A net 5% of people now expect their wealth levels to rise in the next 3-6 months.
And confidence about the future is up.
With regard to the individual areas of spending we get the following net % spending intentions.
A net 13% of respondents expect to spend more on home renovations. This is the best result since the step down in home reno plans in February 2022. This is an important result because renovating one’s home is an expensive business and something which people will only seriously consider when they are confident about their financial position.
Domestic travel plans are trending upward and so are international ravel plans though to a lesser degree.
Interest in purchasing a vehicle and furniture remains low.
Plans for spendingon groceries have interestingly firmed over the past couple of months and it is difficult to put this move down to higher prices as was the case for the sharp rise over 2022-23. But outside of such a factor one would not generally expect this measure to change all that much.
The area of spending to show the biggest improvement since the depths of despair in June has been eating out. Only a net 10% of people plan cutting back now as compared with 42% in June.
With regard to the two housing measures I gather from this survey we have further evidence to justify a view that the housing market improvement is not anywhere near qualifying as a frenzy. The net proportion of people thinking about buying a property to live in has risen from9.8% in June to -3.9% now. This is down from3.5% a month ago.
Similarly, while net buying intentions for an investment property have improved to -7% from18.7% in June, the latest result is a move down slightly from -6.2% in October.
Net plans for buying shares have remained in positive territory.
Overall, the survey results tell us that the winter situation for retailers was poor, and we are now heading into territory which is less bad. But I wouldn’t talks in terms of outright spending strength except maybe for home renovations.
One thing the survey tells us is that there is no need for any superchargingof the monetarypolicy easing cycle in order to get the economy set for a turnaround. That process is already underway and if anything the Reserve Bank needs to be getting more cautious in light of
• the developments in the United States,
• persistent strength of underlying inflation in Australia,
• extremely tight margins in NZ risking a price surge once consumer demand gets greater upward momentum, and
• increases in residential construction costs (including council levies) occurring alongside recovering house prices.
If I were a borrower, what would I do?
Wholesale interest rates in many countries have been increasing in recent weeks for a variety of reasons. These include better than expected economic data in the likes of Australia and the United States, anticipation of a slight lift in inflation due to Mr Trump’s election victory in the US, and locally a pulling back from rate cut hopes which I always considered overly bullish.
The cost to an NZ bank of borrowing money at a fixed interest rate for one year in order to lend out at a fixed mortgage rate for one year (the swap rate) has risen to near 3.98% from 3.92% a month ago. This is at least down from 4.17% two months ago.
But the three year swap rate (relevant to three year fixed mortgage rates) has risen to 3.88% this week from 3.77% last week, 3.56% four weeks back, and 3.48% two months ago. The ten year rate (of interest mainly to farmers and commercial property owners) has risen to near 4.31% from 4.25% last week, 4.03% a month ago, and 3.79% two months ago – a rise since mid-September of about 0.5%.
Few analysts now seem to expect that the Reserve Bank will cut the cash rate to 2.5% and there is strong consensus almost that the cut on November 27 to the cash rate will be 0.5% and not the 0.75% some panicking pundits are pleading for.
In the talks I am delivering around the country at the moment I continue to point out the half century peak in business margin compression implied by cost and price expectations readings in the NZIER’s Quarterly Survey of Business Opinion. I also point out the still well above average and rising pricing intentions for 12 months out contained in the ANZ’s Business Outlook Survey.
Add in expected rises in council rates, electricity bills, climate change-related costs, the effect of oligopolies in many NZ sectors and the need for many businesses to rebuild margins and inflation risks from the second half of 2025 lie on the upside.
This suggests that while extra cuts in the 3-5 year fixed mortgage rates are likely, they might not be all that great. Maybe 5% at best for fixing two years, 5.25% three years. Those rates generally now are around 5.65%.
These three graphs show levels of the one, three, and five year fixed mortgage rates over the past few years excluding the 2019-21 period when rates were absurdly low because of worries about deflation and then the effects of the pandemic.
This graph shows how current rates compare with averages from 2009-19.
This graph shows how current rates compare with
If I were borrowing at the moment, I would be happy to fix for just six months in anticipation of switching to a longer rate at some point from mid-2025 onwards.
To see the interest rates currently charged by major lenders go to www.mortgages.co.nz
Nothing I write here or anywhere else in this publication is intended to be personal advice. You should discuss your financing options with a professional.
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It’s rare in life that we get something for nothing with no strings attached, especially if it genuinely adds value. Nevertheless, that’s precisely I will give you. Expert home loan advice which has reliably proven to offer significant long-term financial advantage. I keep strict tabs on the country’s largest network of banks plus numerous smaller and second-tier lenders, so you don’t have to. What’s more, this comes at no cost to you because your chosen bank pays for the privilege. You have nothing to lose, yet have a higher chance of securing better terms. Rest assured - if there’s a superior deal out there for you, I’ll find it.
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