Article – Tony Alexander: Don’t bet on ultra-low mortgage rates next year
14. Case Study & Auction Update with Cameron Brain
18.
Our month in Review Top Stories & Events from the City Realty Group
22.
Article – Kelvin Davidson: My house price hunch: Why 2025 could be the ‘year of conflicting forces’
26.
LoanMarket Update: Now at 4.25% this is the lowest the OCR has been since November 2022.
24. Property Management Latest Rental Listings
28.
Our Awards & Accolades Ray White Auckland Central & Wynyard Quarter
Numbers Count.
“The November 27 cut in the OCR was predicted and very welcome,” says Director of City Realty Group, Daniel Horrobin. This marks the third consecutive cut to the OCR since August, which is now at its lowest level since November 2022.
Further good news was reported in the NZ Herald in the days after the cut. “The Reserve Bank has cut the Official Cash Rate by 50 basis points to 4.25% as widely expected, and indicated another 50 basis point cut is coming in February.”
Daniel says: “The RBNZ’s decision in October to cut 50 basis points from the OCR immediately impacted activity levels, property inspections, and auction participation across the country. Sales were 23.2% higher than in November 2023 and the number of sales was also ahead of 2023 by 17%.”
Realestate.co.nz reported buyer enquiry levels jumped following the October OCR cut. “In October, we recorded our highest level of enquiry in the residential for sale category in over two years. This was supported by users hitting an all time high, as well as international traffic to realestate.co.nz continuing to increase. 24% more people visited our site and app compared to last year.”
Daniel says: “Of significant interest is the fact there are 50% more pre-approved buyers than the same period last year. This may have accounted for our city office sales numbers being up 26% compared to the same period last year.”
“What is also interesting is the results of ASB’s latest Housing Confidence Survey survey in Auckland where 29% of respondents were expecting house price increases, up from 13% last quarter.
“Perhaps” says Daniel, “there is a perception for many that the market has turned and a buying decision now might be a wise one.”
Auctioneers are reporting much busier auction rooms with an expectation that will remain the case right up to Christmas. Sam Steele, Ray White’s lead auctioneer, said last year was busy
with numbers up 25% on the year before, and this year was tracking to exceed those numbers.
Daniel says: “Our city office auction room was busy through November with a notable increase in pre-auction offers, which resulted in several auctions brought forward. An increase in multiple offers across the board is a further indication of a lift in buyer activity generally.”
“In fact the last auction day for the month on 28 November featuring 10 properties saw a packed auction room – the busiest attendance we have seen since moving to our new Queen Street premises nearly two years ago.”
“The number of properties available for sale on Trade Me remains steady at a touch over 600, following a solid 5% increase through October.”
“Open home numbers in our apartment market remained healthy with 450 potential buyers visiting across the 520 open homes conducted.”
In the tenancy space, reports are that it is getting busier.
“Looking ahead, December auctions are steadily building with good numbers through to Christmas,” says Daniel.
“Speaking of auctions, we are very excited about big plans we have for January with our ‘Beat the Market’ Auction Event launching early January 2025. Those owners waiting for the New Year to go to market will appreciate the importance of beating the competition timingwise. We have the perfect solution, says Daniel. “So watch this space”.
“Speaking of auctions, we are very excited about big plans we have for January with our ‘Beat the Market’ Auction Event launching early January 2025.”
Total Sales
November 2024
52
November 2023
There was a -56% decrease in the total number of sales year on year.
Total Sales Value Median Sales Price Median Days On Market
November 2024
$18,058,250
November 2023
November 2024
November 2023
120 $52,768,349 $361,000
There was a -65% decrease in the total sales value year on year.
Source: REINZ
There was a -33% decrease in the total median sale price year on year.
November 2024
$238,850 34.5
November 2023
42
There was a -17% decrease in the total median days on market year on year.
Sales.
Recent Sales.
STATEMENT:
Ray White repeatedly achieves higher sales prices than other agencies, and it’s not just our claim— here are the facts:
301/83 Halsey Street, ‘Lighter Quay’
1 1 0
SOLD WITH RAY WHITE
Sale Price: $150,000 + GST
($172,500 incl GST)
Sale Date: 24th of October 2024
201/83 Halsey Street, ‘Lighter Quay’
1 1 0
SOLD BY ANOTHER AGENCY
Sale Price: $50,000
Sale Date: 6th November 2024
* IMPORTANT NOTE: Both units are identical with just one floor level separating them, yet Ray White sold for $122,500 more than the other agency.
Request an appraisal today.
Ray White Auckland Central is your home for apartments.
305/8 Ronayne Street, ‘The Landings’
SOLD WITH RAY WHITE
Sale Price: $157,500
Sale Date: 1st August 2024
* IMPORTANT NOTE:
803/8 Ronayne Street, ‘The Landings’
SOLD BY ANOTHER AGENCY
Sale Price: $105,300
Sale Date: 7th August 2024
The unit sold by the other agency included a car park, yet it still sold for $52,200 less than the price Ray White achieved for a property without a car park.
110/8 Ronayne Street, ‘The Landings’
SOLD WITH RAY WHITE
Sale Price: $135,000
Sale Date: 12th September 2024
* IMPORTANT NOTE:
205/8 Ronayne Street, ‘The Landings’
SOLD BY ANOTHER AGENCY
Sale Price: $116,500
Sale Date: 21st August 2024
The unit sold by the other agency included a car park, yet it still sold for $18,500 less than the price Ray White achieved for a property without a car park.
There’s an old saying: “You get what you pay for.”
In these case studies, maybe saving a little on commission upfront led to a significantly higher loss in the end.
List with Ray White for the best results and more money in your pocket. And if fees are a concern for you - let’s talk.
City Realty Group Auction Report.
As we approach the end of another year, it’s time to reflect on the remarkable achievements of the City Realty Group Auction
team in 2024.
While the final hammer has not yet fallen, we can already confirm an extraordinary year of growth and success.
Auction numbers are up an impressive 36.58% compared to 2023, a testament to the dedication of our team and the trust of our valued clients. Our Auctions attracted an incredible 4,473 buyers over the year, accounting for 47.8% of the total number of inspections. This strong buyer interest underscores the effectiveness of our strategies and the desirability of the properties entrusted to us.
In addition to the volume of activity, our Auction Clearance Rate also saw improvement, finishing the year at 67.27%, slightly higher than the previous year. This consistency reflects our commitment to delivering exceptional results for sellers and buyers alike.
Looking ahead, we enter the festive season with great momentum. Our “Beat the Market
Campaigns” are set to kick off 2025 with nearly 40 Auctions scheduled for the 29th and 30th of January. These events promise to continue the energy and enthusiasm that have defined our approach throughout the year.
On behalf of the Ray White City Realty Group, I would like to extend my heartfelt thanks to all our clients for entrusting us with their properties in 2024. Your confidence drives our success and inspires us to reach even greater heights.
As we prepare for a busy 2025, I wish everyone a safe and joyous holiday season. May you have a Merry Christmas and a fantastic New Year filled with health, happiness, and prosperity.
Auction numbers are up an impressive 36.58% compared to 2023 a testament to the dedication of our team and the trust of our valued clients.
Tony Alexander: Don’t bet on ultralow mortgage rates next year
There may be less scope for aggressive cutting in 2025 even if the OCR drops to 3.5%.
ANALYSIS: The Reserve Bank has cut the Official Cash Rate by 1.25% from 5.5% to 4.25% this year and most pundits believe it will reduce the rate further to around 3.5% by the middle of next year. As a result, the wholesale rates at which banks fund their fixed-rate lending have also dropped as have fixed mortgage rates.
The common rate for a one-year fixed rate loan has declined around 1.5% to near 5.8%; the three-year fixed rate has dropped about 1.4% to almost 5.6%, and the fiveyear rate has fallen around 1% to the same level.
It seems reasonable to expect that by mid2025, when there is a strong chance that the easing cycle will reach its end point,
the one-year fixed rate will be just above 5%. The three- and five-year rates probably won’t go that low and will bottom out maybe near 5.3% - if borrowers are lucky.
Even if we ignore the silly period from 2019 to 2022 when interest rates were pushed to unusually low levels by a) deflation fears and then b) the pandemic, some of these low points for mortgage rates in 2025 may seem high.
The average one-year fixed rate over 201718 was 4.4%; the three-year rate was 4.9%; and the five-year rate was 6%. It’s worth remembering that the cash rate was around 1.75% over the same period, so the scope for current fixed mortgage rates to fall all that much in 2025 when the cash rate may
Falling interest rates have boosted the housing market, but house price gains next year are likely to be muted. Photo / Alex Burton
only be sitting at a low of 3.5% is a lot less than what I have indicated here.
The bulk of the removal of monetary policy restraint on the economy which the Reserve Bank is seeking to achieve is already in train. Does this mean the upturn in the housing market seen in REINZ sales and price data will stall given that people seem optimistic rates will fall a lot further?
Probably not, but the strength of the upward leg of the housing cycle this time is likely to be very muted compared with other cycles over the past three to four decades. Restraint on the upturn will not just come from the limited nature of interest rate declines. Gaining access to credit is harder than it used to be. Banks have to apply more rules set by the Reserve Bank, the newest being the debt-to-income ratio limits.
Restraint on the price upturn will also come from the much higher number of new dwellings being built than in the past. Even after the economy’s dire period over the past couple of years, the number of
consents issued for the construction of new dwellings has only fallen to just below the 34,000 number seen the last time numbers boomed heading into 2004.
Growth in dwelling supply has been good and while the outlook for townhouse construction looks negative, there are signs of a stirring in the standalone house sector.
Now add in rule changes freeing up more land for development and allowing greater housing density and we get a different supply versus demand dynamic than over the past few decades.
House prices over the next three to four years will likely rise but the annual gains will be in the 5%-10% range rather than the 10%+ we have often seen before.
Having said that, with all of the rapidly changing elements in the global economic and geopolitical environment alongside the unpredictability of migration flows in and out of New Zealand, anything is possible.
- Tony Alexander is an independent economics commentator. Additional commentary from him can be found at www.tonyalexander.nz
@raywhiteaucklandcentral
@raywhitewynyardquarter
@raywhitesandringham
@raywhite.mtroskill
Morning Tea Fundraiser!
This year, Ray White Auckland Central and Wynyard Quarter teamed up to spread some serious festive cheer as part of our Little Ray of Giving campaign! We hosted a morning tea to support the incredible work of Women’s Refuge. Together, we’ve already gathered a fantastic collection of household goods to help women and families in need this holiday season. Also donating towards a safe night.
But the giving doesn’t stop here! If you’d like to be part of the magic, we’d love for you to donate household essentials. Just drop them off at Level 3, 246 Queen Street, and we’ll make sure they get to the Women’s Refuge to bring comfort and care to those who need it most.
Let’s make this Christmas brighter for everyone!
Our Sandringham Street Festival Winners!
We announced our winners from the recent Sandringham Street Festival. It was wonderful to connect with so many of you at this amazing community event!
A huge well done to Marissa, the winner of our Jelly Bean guessing competition! Thank you to everyone who joined in the fun!
Congratulations to Iva, another lucky winner of a fabulous hamper
A big shoutout to 3-year-old Bailey, the winner of our colouring competition! Bailey wowed us with his amazing colour work and creativity, earning himself a $100 movie voucher! Thank you to everyone who participated – we loved seeing all the incredible artwork!
Auction Action.
Huge congratulations to Tracey Potter and Yuhei on the successful sale of Mt Pleasant under the hammer!
With 9 registered bidders and 35 bids, it was an outstanding auction. A big congratulations to our new homeowners. Here’s to exciting new beginnings in your beautiful new home!
Community Spirit in Sandringham.
Big thank you to Rosa Solano for giving back to our community by donating a wonderful hamper to our local Sandringham kindergarten. Your generosity and care make a real difference!
Congratulations Habeeb!
A huge congratulations to Habeeb on being awarded Premier 23-24. Top 11% of all sales agents in the Ray White Network.
Merry Christmas from Ray White Sandringham!
We wrapped up the year in true festive spirit with a wonderful BBQ dinner at Ivan’s house.
Here’s to celebrating the wins of 2024 and looking forward to an even brighter 2025!
Celebrating 2024 with Ray White Mt Roskill.
We are so proud of what we have achieved in the last year and can’t wait to see what 2025 has in store.
A morning full of festive cheer, great company, and holiday spirit. Finishing off with a charity auction for the Woman’s refuge!
Hello Yell w.
Available now for a limited time. SIZZLING SUMMER DEALS ARE HERE!
Summer is here, which means so are our seasonal property marketing specials.
Get in touch with your preferred sales agent today to find out more.
Kelvin Davidson: My house price hunch: Why 2025 could
be the ‘year of
conflicting forces’
The five things you need to know about the housing market this week.
1. Another variable year in suburbia
Our annual deep-dive into suburblevel data showed a continuation of the patchiness in the property market that’s now been in play ever since the downturn started in early 2022. For example, seven suburbs recorded double-digit gains in median values in 2024, including: Blaketown and Cobden, in Grey District; Kaikoura, in Canterbury; Fernhill, in Queenstown; and Otautau, in Southland. But areas such as Mataura, in Gore, and Pipitea, in Wellington, both declined by around 10%. To be fair, you also tend to see quite a bit of variability across suburbs even in an overall market that’s booming. But the variability seen in 2024 certainly fits with the continued challenges that the property market has faced, including the weakening labour market.
2. 2025 could be the ‘year of conflicting forces’
It’s also that time again when thoughts start turning to what might lie ahead next year, and my hunch is that we’ll largely see a continuation of a market being pushed in opposite directions by a range of different forces. On the one hand, the falls in mortgage rates will tend to support house sales activity and property values, especially as existing borrowers increasingly roll off their current payments and onto the new lower rates. However, (un-)affordability is still a significant challenge, listings remain abundant, and jobs are still being lost. Debt-to-income ratio restrictions aren’t binding right now, but they are also likely to become a greater consideration in 2025. I anticipate house prices will rise in 2025, but perhaps by only 5-7%. That’s great for
Lower interest rates will likely support house price growth next year, but other economic factors could pull the market in the opposite direction. Photo / Fiona Goodall
those who own property, but it’s still only a modest rise compared to the early stages of past upturns.
The theme of trade-offs or conflicting forces may be relevant for other aspects of the property market too. Investors, for example, lower mortgage rates will make the cashflow for a typical rental purchase look more appealing. But DTIs may make it a little more difficult to get finance in the first place. Meanwhile, people choosing a mortgage rate must decide between fixing short or returning to longer terms again.
3. The economy remains lacklustre
Another reason to take a relatively cautious view about the housing market’s performance in 2025 is that the economy remains subdued, and may not kick into gear again for a while yet. The latest soggy results came from November’s electronic card spending (core retail activity up by only 0.1% from October) and the BNZBusinessNZ manufacturing indicator, which was in shrinking territory for the 21st month in a row.
4. Rental market still looks subdued
This week, Stats NZ will publish its rental price data for November, and there’s every chance we’ll see another subdued result. After all, net migration continues to drop –which is slowing overall property demand growth – and the stock of available rental listings has also risen; up by 17% year on year, and essentially the highest level for this time of year since 2020.
5. Another recession?
Finally, we’ll sign off 2024 (in terms of headline economic data) with the Q3 GDP figures from Stats NZ on Thursday. The expectation is that GDP will have fallen by perhaps 0.3-0.4%, which means another technical recession, after the drop in Q2. But as always, remember these figures for July-September are already a bit old (we’re in December), and the timelier measures suggest that Q4 probably hasn’t been as bad, albeit not great either.
CoreLogic chief economist Kelvin Davidson: “I anticipate house prices will rise in 2025, but perhaps by only 5-7%.” Photo / Peter Meecham
Merry Christmas from the team at SuperCity Property Management.
As the holiday season approaches, we would like to take this opportunity to wish you all a very Merry Christmas and a Happy New Year! Thank you for your continued trust and support throughout the year, and we look forward to working together in the coming year.
The Residential Tenancies Amendment Bill has passed its third reading..
Delivering on the coalition Government’s commitment to deliver sensible changes to tenancy laws, after announcement from Housing Minister Chris Bishop.
The key changes in the Bill include:
• Reintroducing 90-day notice ‘no cause’ terminations for periodic tenancies, meaning landlords can end a periodic tenancy without requiring a specific reason.
• Reducing landlords’ notice periods for ending a periodic tenancy to 42 days in specific circumstances.
• Reducing tenants’ notice periods for ending a periodic tenancy from 28 to 21 days.
• Reintroducing landlords’ ability to give notice to end a fixed-term tenancy at the end of its term without requiring a specific reason.
• Allowing landlords to require a pet bond alongside the introduction of new pet consent and damage liability rules.
Changes will be introduced starting in early 2025. The new rules for ending tenancies can be used from 30 January, while pet-related changes including the option to charge pet bonds, are likely to be introduced in late 2025. Guidance on what the changes mean for landlords and tenants will be available from the Ministry of Business, Innovation and Employment’s Tenancy Services website.
Jamie Maclennan
027 742 5227
jamie.maclennan@loanmarket.co.nz
Now at 4.25% this is the lowest the OCR has been since November 2022.
The question we get asked almost everyday is how much will interest rates come down?
There’s a lot of excitement out there amongst borrowers, particularly those with mortgage renewals coming up.
Whilst optimism is justified some caution applies as well. If you’re in a midst of a refixing decision, there are a couple of important points to be aware of:
There are a number of things that affect interest rates, not just the OCR:
• Term deposit rates
• Wholesale rates
• OCR cuts are also priced in before the announcements are made, so often you will see the bank lower their rates before the announcement.
Rates have already dropped from over 7% to mid 5% since August, which is a lot considering up until today we had only seen a -0.75%
reduction in the OCR.
The projections are now that rates will continue to drop throughout 2025, but there is a big gap between now and the next announcement on February 19th, 2025. I would like to think that we will see something starting with a 4 at some stage, but we certainly don’t expect to go back to the 2% range in this interest rate cycle. A 4% interest rate will rely quite heavily on overseas impacts, and the
now infamous Trump effect.
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 mid2025 onwards.
The other advice we are giving, is don’t wait too long before you lock some lending in for a longer term, as once everyone starts fixing for 2-5 years, we might see these rates increasing again.
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SALES TEAM - AUCKLAND CENTRAL OFFICE
Daniel Horrobin
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Dusan Valenta
Habeeb Urrahman
Carlos Del la Varis
Chris Cairns
Grant Elliott
Judi Yurak
Keisha Gutierrez Krister Samuel
Jeong Lee
Chris Guilford
Danika Ansley
Derek Yin
Sales Manager
Wynyard Quarter, Sandringham & Mount Roskill
Belinda Henson
Casey Chen
Kristine Liu
Leo Zhang Lecta Chanthawong Business Manager
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Neil Dayal
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