The Property Chronicle - November 22

THE PROPERTY CHRONICLE

Home is where theheartis

When you know.youuknow.

LJ

REINZ-PressRelease (link) Page7

REINZ-MonthlyReport (link) Page8

REINZ-MonthlyHousePriceIndex (link) Page9

REINZ-MedianHousePriceChangesMap Page10

15November2022

Hi, Cooler start to the spring property market...

TheusualspringliftwasabsentintheresidentialpropertymarketthisSeptember, accordingtothelatestdatafromtheRealEstateInstituteofNewZealand(REINZ).

Althoughsalepricesaredownfromtheirpeaksduringtherecentrealestatebuying frenzy,month-on-monthperformancehasbeenrelativelystable.ForbothAugustand September,thenumberofhomessoldwasabout5000eachmonth,andthemonthly medianhousepricewassimilar,$800,000inAugustand$811,000inSeptember.

Inthesamereport,agentsreportedmorefirsthomebuyersinthemarketing,andnoted anincreaseatopenhomesandauctionsinsomeregions.

"Followinganexceptionalperiodofgrowthlastyear,spurredbygovernmentstimulusand closedbordersseeingKiwisinvestlocally,thepropertymarketismoderating,"REINZchief executiveJenBairdsaid.

"Owner-occupiersremainastrongbuyerpoolandagentsinsomeareasreportseeing morefirsthomebuyers,enticedbyeasingpricesandlesscompetition.

"Howeverpropertypricesarestillunaffordabletomany,particularlyinlargerhubssuchas AucklandandWellington.”

Basedontheseasonallyadjustedfigures,theSeptemberdatawasweakerthanANZ’s forecast,ANZsenioreconomistMilesWorkmansaid.

Thelargebankpredictsthatpriceswillfall15percentfromtheirpeaktotheirtrough.

continued over...

BrentWorthington

PrincipalandLicenseeAgent

LJHookerDrury&PropertyManagement

1/233GreatSouthroad,Drury 092947500 0292965362

continued...

“Butgiventhe45percentriseover2020/21,evena20percentfallcouldbe considereda‘softlanding’,”hesaid.

“Ahardlandingwouldlikelyrequireanemploymentshockandforcedsales, andwe’renotseeinganyevidenceinthedatatosuggestthisishappening enmasse.Thatsaid,householdswithahighdebt-to-incomeratiowill definitelybefeelingthepinch.”

QV’sHousePriceIndexdataalsoreportedaslipinhomevalues,down2.1 percentnationallyinthe12monthstotheendofSeptember.

"Thismarketcorrection,aspainfulasitisforsome,willhopefullyaffordothers anopportunitytogetintothemarketinthefuture,"QVgeneralmanager DavidNagelsaid.

"Interestraterises,creditconstraints,theincreasingcostofliving-it'sasurefirerecipefordeclininghomevalues.

"Plusthere'sstillnewhousescomingontothemarketupanddownthe country,puttingfurtherdownwardpressureonpricesalmosteverywhere."

PrincipalandLicenseeAgent

LJHookerDrury&PropertyManagement

1/233GreatSouthroad,Drury 092947500 0292965362

Asalways,wetrustyouenjoythismonthspublication. Where

the only result that matters is yours!

BrentWorthington

ExpertHomeRenovationAdvice–MistakestoAvoid

Beforeandafterrenovationphotosarecaptivating.Whethertheyappearonoursocialmedia feeds,orweseetheminmagazines,transformationbetweenthetwosnapsmaketherenovation processlookeasy.Whatweoftendon’tseeisthehardworkthathappenstoreachthefinished result.

IfyouareanavidHGTVwatcher,orhaveexperience thisyourself,youmayalreadyknowthat transformingyourhomemaymeanyouhavetodig deepintoyourwalletwhenyouuncovercostly mistakes.

Therenovationjourneycanbefullofemotionsand unforeseencosts,butitispossibletosaveyourself frommajordisasters.Tohelpyouout,wehave turnedtoourbrandambassadorsShannonVosand GenevaVanderzeiltosharewhattheyhavelearnt fromtheirmanyDIYprojects.

Shouldyouattemptjobsoutsideyourcomfort zone?

Renovationprojectsaroundthehousecanrequire certainskills,andaYouTubetutorialmaynotbe goodenoughtomasteraproject,andevena seasonedDIYexpertlikeGenevaagreessomejobs shouldbelefttotheexperts.

WhenGenevaandherpartnerBenrenovatedtheir home,theyrealisedhowmuchtheycoulddo themselves,andcalledinthecontractorsforthe morecomplextasks.Theyturnedtotheexpectsto draftplans,makestructuralupdates,for complicatedtiling,plumbingandlighting.

"ThereareYouTubevideosforjustabouteverything, butwhileitis'possible'todoeverythingyourself, unlessyou'reseriouslytalented,it'snotalways advisable,"Genevasaid."Youwanttomakesureany updatesaredoneproperlytoincreasethevalueand functionalityofyourspace.Thiswillalsosavehaving togetitredone."

Forfirst-timerenovators,itmaybebesttorestrain yourselftothemorebasicprojects,suchaspainting, layingflooringandmaybealittleplastering.

"Startsmall,soyoucanworkonyourconfidenceand buildyourskillset,"saidShannon,whohasjust finishedhisfourthhomerenovation."Thereareafew

questionablebrick-layingjobsI'vedone–luckily nothingstructural–butitisoneofthosejobsI've turnedmyhandtothatIdiscoveredisreallyhard."

Althoughhomerenovatorsarelegallyabletodotheir ownwaterproofing,theworkneedstomeettheNZ BuildingCode.Ifitisnotdoneright,itcouldproveto beanexpensiverenovationmistake.Whenindoubt, callinaprofessionaltoavoidanycostlyand dangerousdecisions.

"Youshouldneverbeplayingwithelectricityunless youareanelectrician,"Shannonwarns.

Hurryingthejobalong Renovationsareadisruptiveprocess,yourhomeis constantlymessyandthesightofunfinishedwork canbetormenting.Tomakesureyoudon’tcut cornersonquality,avoidtryingtogetitallcompleted inahurry.

Shannonknowsfirsthandthepressurethatcomes withalarge-scalerenovation,havingbeena contestantandwinnerofTheBlockAustralia.Hismost recentrenovationprojecttooktwoyearstocomplete, andhelivedinthathousewithhiswifeandtwo youngsonsthroughout.

Insteadoftakingonabigrenovationprojectat once,completingtheworkinstagescanbea betteroption.Taketimetoworkoutyourpriorities andthenslowlymakeyourwaythroughwhatis likelytobealonglistofjobs.

"Youdon'twanttodoashonkyjobbyrushingitall, solittlebylittlecanbethebestapproach,"Shannon said.

Ifyoucanlivesomewhereelseduringthe renovation,Genevasuggestsnotgoingon-site everyday.Itcanbecomealittleoverwhelmingif yougotoooften.

"Obviously,whenyoudogo,it'simportanttocheck thingstomakesuretheyareright,butdailychecks arejustgoingtodriveyouandyourcontractors crazy,"shesaid.

Tightbudget

Unforeseencostsarepartofpracticallyevery renovation,soyouneedtobepreparedifyour costsblowout.Evenifyoubudgetdowntothelast cent,stillexpecttheunexpected.

FromShannon’sexperience,herecommendsadd anextra30percentasacontingency.Withthis extracashallowance,itcouldbeusedtofixup nastysurprisesalongthewaycauseyoudon’tknow whatyouaregoingtofindinthewalls.

"Itisabitlikethehousingmarket.Youcan'tjustgo allinandmaxoutbuyingthebiggesthouseyou canaffordona5.5percentinterestratewithout factoringinanyrateincreases.Youalwaysneedto haveabuffer,"hesaid.

Ifyouneedtoreduceexpenses,considercutting thebigticketitems,suchasaddingapoolandnot thefinishedelementslikeplasteringandtiling.

"Thesearethethingsthatpeoplesee,andtheywill bethethingsthatirkyouwhenyoufeeladrummy tileorseeadodgypaintingjob.Itisabig renovationmistaketocutcornersonthefinished trades,"Shannonsaid.

Beforeyoustartyourrenovation,mentallyprepare forafewhurdlestoavoidfeelingoverwhelmed mid-project.

"Sometimesitjustiswhatitis–youhavetobeable todealwithit,"Shannonsaid."Learntoletgoand justfocusonwhatisinfrontofyouinsteadoftrying tomakeeverythingperfect."

Avoidspendingmoneyinareasthatdon’t matter

Stickingtothebudget,particularlywhendecorating, isdefinitelyoneofthehardestpartsofarenovation. Butdon'taddtothestressbyoverspendingon thingsthatwon'tmakeabigdifferencetothe overalllook.

"Itissoeasytogetcompletelycaughtupwithwhat youseeonline,andmakeamillionmoodboards withallyourdifferentideas,andnotreallyconsider howmucheverythingisgoingtocost,"Genevasaid. "Oftenwhatyou'reseeingwasbuiltwithouta budgetorupperlimit."

Itispossiblethatacompromisecanturnoutbetter thanyouroriginalplan.Forexample,Genevahadto swapmarblecountertopsinherkitchenrenofora moreaffordabletimberfinish,whichshediscovered shelikesmore.

Itisalsoeasytoforgetabouttheimportanceof naturallightinaspace,sokeeplightinginmind. Thiscanbeachievedbyskylights,windowsand repaintingtoensuretheinteriorisfreshandbright.

Knowwhatyouwant

Beforeyoustartanyrenovation,knowwhatyou wanttoachieve.Thegoldenruleisthatonceyou havechosensomething,stickwithit.

"Itishardwhenyoudoacomplete180ondesign andmaterials;Iknowthisfeelingeversowell," Genevasaid."Changeisdefinitelynotagoodidea whenitcomestorenovatingbecausethat'swhen thecostandtimeblowout.Sopicksomethingand moveon!"

Yoursuccesswilldependonhoworganisedyou are,ifyoufailtoplanproperlyyouwillinevitably causemajorheadachesduringconstruction.You don’twanttohavestartedyourrenovationand discoveryouforgottobuythebathroomtapsor kitchensinkyouwanted.Toavoidtheseheadaches andanydelays,haveeverythingorderedand deliveredon-sitebeforeyoubeginthework.

"Ifeverythingisready,thenyourrenovationswillflow muchmoresmoothly,"Shannonsaid.

Mosthomemakeoversaregoingtohavetheirfair shareofhiccupsalongtheway.Beopentoadvice fromothersandlearnfromtheirrenovation mistakestohelpyoukeepontrack.Let’shopeyou getluckandhavetheperfecthomeDIYexperience.

Theinformationcontainedinthispublicationisgeneralinnatureandisnotintendedtobepersonalisedrealestateadvice. Beforemakinganydecisions,youshouldconsultalegalor professionaladvisor.LJHookerNewZealandLtdbelievestheinformationinthispublicationiscorrect,andithasreasonablegroundsforanyopinionorrecommendationcontainedinthis publicationonthedateofthispublication. Nothinginthispublicationis,orshouldbetakenas,anoffer,invitationorrecommendation.LJHookerNewZealandLtdacceptsnoresponsibilityfor anylosscausedasaresultofanypersonrelyingonanyinformationinthispublication. ThispublicationisfortheuseofpersonsinNewZealandonly.Copyrightinthispublicationisownedby LJHookerNewZealandLtd. Youmustnotreproduceordistributecontentfromthispublicationoranypartofitwithoutpriorpermission.

REINZ October data: buyer interest increases, but not reflected in market activity

Highlights

• The median price for residential property in Aotearoa New Zealand decreased 7.5% annually, from $892,000 to $825,000 in October 2022.

• There was a monthly uptick of 1.9% in the national median price (September 2022: $810,000).

• New Zealand excluding Auckland recorded a 3.4% decrease in annual median price movement.

• There was one record median price: Marlborough saw a 20.7% annual increase, up to $781,000.

• Sales activity is down 34.7% — from 7,486 to 4,892.

• Annual comparisons reflect a month when lockdown Alert Level 3 restrictions were eased (6 October) in Auckland, which saw a significant uptick in transactional volume.

• Nationally, the housing market value — measured by the REINZ House Price Index — dropped 10.9% annually and is down 12.4% from its peak in November 2021.

• Rising interest rates and changes to tax legislation and property regulation are affecting the market — salespeople report hesitancy amongst buyers and concern amongst vendors that the value of their property will decline.

• Properties are staying on the market longer; the national median days to sell was 44 in October, an annual increase of 10 days — but down from 47 in September.

• Stock levels were up 74.7% compared to October 2021; listings were down 4.0% compared to the same period last year.

• With all regions seeing more property for sale, buyers have greater choice.

While October sees an increase in enquiry and open home attendance in some regions, rising interest rates have caused hesitancy amongst buyers across Aotearoa New Zealand. The national median price showed improvement on September. Still, prices continue to ease, sales activity remains down and properties are taking longer to sell than in October 2021, according to the latest data and insights from the Real Estate Institute of New Zealand (REINZ), home of the most complete, accurate and up to date real estate data in New Zealand.

MONTHLY HOUSE PRICE INDEX REPORT.

Property Management

On the following pages you will find our Property Management Newsletter.

on’t hesitate to contact Debbie Harrison who can ably assist you with any Property Management issues you may have or if you have any questions about anything in the Newsletter or property management in general

Email: debbie.harrison@ljhooker.co.nz Phone: 021 303 864

Governmentabandonsschemetofillghosthomes

Thegovernmenthasmoveditsfocusawayfromfillingvacantpropertiesaftera$500,000 investigationandtrial.

Vacantproperties,alsoknownasghosthomes,are oftenlookedatasasolutionforeasingthepressure ontherentalmarket.However,theresultsofatrialin Hamiltondidnotfindfavourableresults.

Thegovernmentturnedtocommunityorganisation WiseGrouptoinvestigatethenumberofghost homes,whytheywereemptyandtorunatrialtotry fillthemwithtenants.ItsworkbeganbackinMarch 2021anditproducedanationalschemefollowingits investigation.

Resultsfromtheinvestigationfoundtheprocessof workingwithownersofemptypropertiestofind tenantswastoocomplex,andthenumberoftrue ghosthomeswasfoundtoberelativelysmall.

Thecommunityorganisationdrewon2018Census dataandfoundtherewerenearly95,000empty dwellingsacrossNewZealand.However,asurveyof emptyhomesownerssuggestedonly10percentof thosepropertieswereintentionallykeptvacant.

Whenbreakingdownthenumbers,thevastmajority ofemptyhomeswereholidayhomes,secondhomes, orwerevacantrentalpropertiesorunderrenovation. “Long-termvacantdwellingsmakeuponlya proportionofunoccupieddwellings,”aMinistryof HousingandUrbanDevelopmentspokespersonsaid.

Thespokesmansaidthestudyindicatedtherewere no“low-hangingfruit”tomakeemptyhomes availableasrentalproperties.

DespitetheMinistry’sdecision,WiseGroupboard chairJulieNelsonbelievesanyprogrammeto increasehousingavailabilityisworththeinvestment.

“Weknowthatinnovationprojectsofthisnature needtimetobecomewell-establishedandachieve desiredreturns,”Nelsonsaid.

Theministryspokespersonsaidtheschemewasstill worthwhiletobetterunderstandtheextentof,and reasonfor,propertiesbeingkeptvacant.

“Theprojectgaveusagreaterunderstandingofthe barrierstofindsuitableemptyhomesforhousing marketrenewalandthesupportandsolutions neededtobringthembackintothehousingsupply, withintheNewZealandcontext.”

ThetrialinHamiltonfocusedoneightvacant properties,andresultedinfivebeingreturnedtothe market.

“Itisgenerallyacceptedgloballythat asmallpercentageofhomeswill naturally,duetoarangeoffactors,be unoccupiedatanyonepointintime.”

MistakesToAvoidWhenInvestingInProperty

Investinginpropertyisadreamformany.Itisaninvestmentthatyouphysicallyown,and likeformerUSPresidentFranklinD.Rooseveltsaid:“Realestatecannotbelostorstolen,nor canitbecarriedaway.Purchasedwithcommonsense,paidforinfull,andmanagedwith reasonablecare,itisaboutthesafestinvestmentintheworld”.

Whendoneright,apropertyinvestmentcansetyou upwithacomfortablenesteggtosupportyouand yourfamilythroughlife’sadventures,andinto retirement.However,likeeveryinvestment,thereare risksinvolved,especiallyifyoudonotknowwhatto lookoutfor.

Togetthebestreturnonyourinvestment,thereare severalcommonmistakesyoumaywanttoavoid. Hereissomeadvicetohelpyouavoidthose mistakes.

Haveasolidplan

Justlikeallgreatthingsinlife,aplaniswhathelps yougetahead.Oneofthebiggestmistakespeople makewheninvestinginpropertyisfailingtoseta specificgoalfromthebeginning.Itisimportantthat beforeyouinvestinapropertyyouknowhowitwill generateanincome.

Fromthebeginning,consideryourproperty investmentstrategybeforeyougetcaughtupinthe propertybuyingfrenzy.Afewquestionyoumay wanttoconsiderinclude:WhattypeofhouseamI lookingfor?Whereismytargetlocation?DoIwant torentmypropertyorflippropertiesforprofit?What willhappenifthemarketsours?

Whiletheanswerstothesequestionsarejustthe beginning,yourplanshouldbefullofdetails.Thisis agoodstartingpointforyourplanningprocess.

Putyourmindoveremotions

Manyofusareguiltyofthinkingwiththeirheartand nottheirhead,andwhenitcomestoaninvestment youneedtobeanalyticalwithyourdecisions.

Beinganalyticalandobjectiveisthenameofthe gamewhenbuyinganinvestmentproperty.Ifyou seeapropertythattakesyourfancy,sleeponit andgainmoreinsightintothecapitalgrowthand rentalyieldpriortomakinganyrashdecisions.

Research,research,research

Findingtherightinvestmentpropertyisnot somethingthatisgoingtohappenovernight,itcan betediouswork.Attimes,itmaybetemptingto skipalltheresearchandgostraighttopurchasing, butthatwouldbeavitalmistake.Ifyoudonottake thetimetodoyourresearchfirst,youcanendup withapropertythatfailstogiveyouthereturnyou want.

Somehelpfulresearchtipsforpropertyinvesting include:

Avoidbasingimportantdecisionsoffthe recommendationoffriendsandfamily.While well-meaning,thosewithoutexpertiseinthe fieldcanhinderratherthanhelpyour investmentplan.

Doyourhomeworkonthelocalarea:whatare themarkettrends?Demographic?Demand andsupply?

What’stheconditionoftheproperty?Willit requiremajorrenovationsormaintenance? Doesitmeetthehealthyhomesstandards? Doesthepropertyalignwithyourtarget tenantswantsandneeds?Forexample,doesit havethefeaturesandamenitiesthattenants wantinthatlocation?

Decisionsmadeusingtheheartstringsplaya significantroleininvestmentmistakes.Itis importantthatyouapproachyourinvestment propertyasabusinessandputyouremotionsto onesidewhenmakingcriticaldecisions.Thismeans thatyoushouldnotfallinlovewithyourpropertyso muchthatyoubeginlookingatitfromtheviewpoint ofahomeownerratherthanapropertymanager.

Doingyourresearchwillensureyouarewellinformedaboutthepropertyandcanmakebetter realestateinvestmentdecisions-avoidingcostly mistakes.

Dothemaths

Itisimportantthatyouarefamiliarwiththenumbers beforeyoucommittoaninvestmentproperty.You needtomakesureyouareontopofyourmortgage repayments,aswellasothercosts,suchas maintenance,ratesandinsurances.

Tomakesureyouarepreparedforanyadditional costs,itisagoodideatocreateamaximumlimit andtosetasideanemergencyfundforany unexpectedcostsorissuesthatcropupfrom managingaproperty.

Ontopofthis,alwaysmakesurethatyour investmentisfinanciallysound.Makesureyouhave enoughmoneystowedawaytoputdownadecent propertydepositandhaveenoughtopayback thosemonthlyloanrepayments.Agoodruleof thumbistohave2-4monthsofrentalincome savedupasafinancialbuffertoavoidbeingina constantstateoffinancialstress.

Don’tsettleforthewrongproperty

Withanumberofdifferentpropertiestopickfrom,it iseasyforfirst-timeinvestorstojumponthefirst propertythatbecomesavailable.Awordofadvice? Holdyourhorses.Ifyouwanttoavoidbuyingthe wrongpropertythenkeepaneyeoutforthe following:

Isitaninvestment-gradeproperty?

Scarcity:investinginanewbuildpropertywithin anewresidentialestatemaynothavethe investmentpotentialasanolderhome.

Whatisthelandvalue?

Whatisthepastsaleshistoryoftheproperty? Considertheproperty’sproximitytoshopping centre,hospitals,schools,arterialroadsandso forth.

Whenindoubt,alwaysconsultwithaproperty managerforprofessionaladvicetoavoid investmentmistakes.

Thinklong-term Realestateneedstimetogrowinvalue.Thelonger youowntheproperty,thehighyourreturnwillbe whenitistimetosell.Ifyouarehopingtogeta goodreturnonyourinvestment,thenavoidmaking themistakeofinvestingshort-term.Sure,itmay provideinvestorswithahigherrateofreturns,but italsocomeswithahigherrisk.Remember,asa first-timeinvestor,slowandsteadywinstherace.

Consideryourtenants

Ifyouhavedecidedtohaveaninvestment propertyyoucanrent,keepyourpotentialtenants inmind.Manyfirst-timeinvestorsonlytakein accounttheirneedswhenpurchasingaproperty, andfailtonoticewhatwillandwon’tworkfor potentialtenantswhomaycallyourinvestment propertytheirhome.

Trytomatchyourinvestmentpropertywiththe typesoftenantsmostlikelytorentinthatarea.For example,familieswillwantasafeneighbourhood andproximitytogoodschools.Singlesorseniors maywantaccesstopublictransportand shoppingcomplexes.Ifyourpropertyistobea vacationrental,makesureitisnearbylocal attractions.

LocatedinhighlydesirableStonefields,commutingto Auckland'sCBDtakesapproximately20minuteswhile theInternational/DomesticAirportsareaneasy30 minutedriveoutsidepeakcommutingtimes.The primaryschoolatStonefieldsoffersconvenienceto parentswithchildrenwhileanumberofAuckland's prestigiousprivateschoolsarelocatedinthe surroundingarea.

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Lina Roban

Licensee Salesperson

Priortoenteringtheworldofrealestate,drivenbyherloveof meetingandhelpingpeople,Linahadanimpressive20year careerinsalesandmarketingrolesinthetelecommunications andcorporatemarketingindustrieswhere herexpertisein communicationandnegotiationalwaysresultedinthedeliveryof superiorcustomerservicetoherclients.

OriginallyfromFiji,Linaepitomisesenergy,passionintegrityand hardworkineverythingsheturnsherhandto.

Whennotdeliveringsuperiorservicetoherclients,Linaloves spendingtimewithherfamilyandisapassionatecyclist,owning bothroadandmountainbikes.Withherthreechildrenallhaving "flownthecoop",Linaandherhusbandalsohaveplentyoftimeto enjoytheirloveoftravelandsomeoftheirmorememorable adventuresincludeextensivejourneysthroughoutSouthEastAsia, theUSAandtheSouthPacific.

Fivetoptipstohelpbuyersrealisetheir

dreams:

Keep your eye on the prize - when saving, believe that the end goal is going to be worth it and all the sacrifices you make are worthwhile

Use a mortgage broker - a mortgage broker is critical to providing in depth knowledge about the housing market, the loan options available and/or how to reach your deposit goals. They also have access to multiple lenders and can provide offers that may not be available to direct customers

Create a checklist of "must haves", "nice to haves" and "bonus points" – the Walkers then attached a score of 3, 2 and 1 respectively to each category and marked each house like this. That way you can be realistic about every house and they are all on an even playfield to score. Things like the weather, the agent's personality and how you feel on the day won't affect your actual score of the house

Be open - in today's market we all know how difficult it is to get your foot in the door of a home, especially your first home. Your first home doesn't have to be absolutely perfect. Chances are it will not be your "forever home", so be flexible and perhaps sacrifice that large bathroom you wanted, or the distance to the local school may not be as close as you would like

Due diligence - do your homework. The simple stuff everyone should do before buying a home. Before putting in an offer make sure you look at the home's history, such as the sales history and property inspection report (using a qualified property inspector ), including a LIM and building report. Talk to the agent and find out as much as possible about the property. Research the suburb. Be nosey and check out the neighbours. Invite a friend or family member to the open home or to a private inspection for another opinion.

Whenyouknow,youknow.™