Figures released yesterday by Statistics New Zealand shows there was record migration in 2016 – with our population increasing by a massive 70,600.
Juxtapose this information with talk of our property market going into decline, and the two do not marry up.
As we’ve said before, the key forces that have fuelled the market so far – high levels of immigration and low interest rates – remain unchanged.
Immigration is particularly key when you look at the Auckland market. Approximately 60% of migrants stay in Auckland when they arrive in New Zealand. That’s about 42,000 people requiring houses. What that translates to is a need for 14,000 houses a year for an average household occupancy of three. That’s on top of an estimated existing shortage of about 20,000 houses.
At current levels of construction there are no indications that supply will begin to meet that demand, and no sign from the government that immigration will begin to tail off.
It’s important to reiterate it’s not purely immigration fuelling the market around the country. Our economy has grown 17% since 2007 and continues to grow. That in itself generates confidence and activity.
However, we have seen a fall in the number of property investors in the wake of the tougher loan to value ratio (LVR) restrictions introduced in November.
With investment dropping away a little, will the market remain at the same speeds that we have seen in 2015-16?
It has felt like that for much of 2016 market commentators and observers were willing the strong, highly active market to fall over dramatically, particularly in Auckland. At this point, however, that seems unlikely to happen any time soon.
First, it’s important to remember that a market cooling, isn’t the same as saying a bubble is bursting. It’s just merely returning to the healthy activity levels of prior to 2014-15. What we should be left with through this year is a more balanced market across the country that still allows room for growth, but perhaps doesn’t move so far so fast, shutting some out altogether. 2015 was an unusual year and coming back a little from those levels of sales and inflated prices does not mean disaster.
Interest rates are the unknown quantity. Banks are beginning to raise rates and we’re likely to see the Reserve Bank adjust the OCR. Will it be enough of offset the thirst for property still in the market? That is highly doubtful given our net migration levels and resulting demand.
Supplied by Chris Kennedy CEO Harcourts
January was excellent for Twiss-Keir with strong sales and outstanding listings. The market throughout North Canterbury is buoyant with properties further from the main centres showing activity not seen for many months.
Reading an article yesterday confirmed with me this was indeed the case. “As house price growth flattens in Auckland, Christchurch and Hamilton, it appears the new property hotspots are in places that once struggled to sell a house”.
Exciting news for anyone thinking of selling at present. Don’t forget to give us a call.
Harcourts are mostly known for selling real estate – be it residential, commercial or lifestyle. What a lot of people are not aware of is our Property Management services. Property Management has become an essential service within our business and in all our markets we are the largest dedicated Property Management team.
At Twiss-Keir we were early adopters of Property Management as a tool that sat side by side with real estate sales. We understood that Property Management is an obvious essential that many investors would take advantage of if it was offered. Often investors would ask us for rental assessments on properties they may wish to purchase which lead to them asking the simple question – can you manage my property for me.
With extremely high minimum standards, strong work ethics and a principled approach we have grown our Property Management department from one person in 2006 to a team of 10 spread across our four branches. Included in the team are multiple Property Managers, two assistant Property Managers and New Business Manager.
We are unique in North Canterbury not only because we have a standalone Property Management division but that we have more than one person in our team and we have the only New Business Manager in the region. The reason – we are good at it and have a proven track record which creates a continued business relationship with our clients.
We offer a service second to none and in doing so we have seen significant growth in our Property Management division over the years. We pride ourselves on putting the client first and rarely have concerns.
Property Management itself has been slowly adopted by the North Canterbury market. When we first entered the market offering Property Management we saw a strong push back from traditional investors who tended to own one or two properties they managed themselves. Over time as people become more time poor and tenancy legislation becomes more and more difficult to navigate we have seen a trend of traditional landlords coming to us to assist in the management of their investments.
Investing in a Property Manager is the best investment you can make. They take the stress out of managing properties in several ways including giving you anonymity from your tenants, ensuring the property is clean and tidy always, keeps rents a market rates and can navigate through tough situations lay people may never be able to get through. Our experts essentially make your life a lot easier and take the strain out of your life all for a very fair fee.
Personally, I have used Property Managers in all my investments. I believe them to be an essential and whenever I purchase I build their fees into any calculations I make as they are a non-negotiable. If you have an investment property you should be at least talking with one of our award-winning Property Management team to see how we can help you. You will be surprised at the value you receive and the stress that will be released.
I was reading an article in the Central Christchurch Mail this morning that I thought I might share as I found it interesting and also it is one article that is written about our local market rather than the Auckland market that tends to dominate the media in New Zealand.
Christchurch's recent rating revaluations have pushed up selling homeowners' price expectations. The Real Estate Institute's latest report shows the median sale price in the city during November 2015 was $465,500, an annual rise of 4.5 per cent.
Institute director Jim Davis said that in the past fortnight, as happened every three years when new rating valuations were announced, some owners had "got big ideas" about prices. Christchurch City Council revaluations released on November 29 put the average home value at just over $500,000, a rise of 7.3 per cent in three years.
"People think 'My property has jumped up in value'," Davis said. "But that's been happening gradually. The rating valuations are based on sales history, they're catching up to what has already happened with prices." Rating valuations were also a broad-brush measure not intended to give an accurate market value, he said. Davis said real-estate agents "would be having a few of these discussions with sellers" and things would settle down again quickly.
The institute's figures show the city's real estate market is one of the country's steadiest, with post-earthquake housing development putting the brakes on high housing inflation. The November median price was a record, up from a previous high of $459,000 in September.
Regardless of the excitement over revaluations, Davis said the market was well balanced between buyers and sellers. Homes were selling well and there were plenty for sale, he said. First-home buyers were becoming more active as they understood lending rules reworked by the Reserve Bank earlier this year.
The institute's report said the median November sales price for Canterbury Westland was also a record at $440,000, up 4.5 per cent in a year. Median prices within the region included North Canterbury country $390,000, Mid-Canterbury $326,500, Timaru $353,350, South Canterbury country $297,000, and West Coast $170,000.
The number of sales in both Christchurch and the region were down slightly from a year ago. Listings were already slowing in the lead-up to Christmas and he expected house-hunting to slow down next week. The market would likely pick up again quickly between early and mid-January.The report showed homes in the region were taking an average of 32 days to sell.
Many parts of the country recorded annual price rises in double figures with the Queenstown Lakes area showing the biggest jump. The national median sales price in November was $520,000.
I love Christmas – it’s a great time of year. Having two small children (5 and 3) it is a fun time in my house. Being so keen on Christmas the tree in our house was up and decorated on the 27th of November – with presents wrapped and placed. What a mistake – the following day presents were distributed all over the house by Florence our 3-year-old who thought every present was for her. Sure enough there were words - mostly along the lines of if you do that again you won’t be on Santa’s good list and he won’t give you any presents. Yes, you feel bad but as someone said to me if you have not been using Santa as an excuse, to get the kids to do something, at least 6 times a day you are not a good parent.
The advent calendar this year is Lego at our house because last year we needed two calendars and chocolate was not always good for two-year-old at 6.30 in the morning. This year the calendar is great as they want to open it to make the little Lego toy rather than just hoover down chocolate. Ah Christmas it is so fun!
Candy canes hanging on the tree are one of my wife’s favourites – not exactly sure why as the kids think they are theirs and tend to eat them for breakfast. What happens over time is the candy canes migrate up the tree out of reach of little hands. Same for the breakable decorations – every year we must break at least two decorations before we end up putting them all on the top branches. You can imagine by Christmas day we have a tree essentially nude from half way down with all the decoration crammed into the top half.
It is a time for enjoying with the kids, they are so excited, Poppy is wanting roller skates and Florence is after a set of pink headphones – not sure why as she has nothing to play on them. They are naive and wonderful and really do make your Christmas. How else would you have it – excited smiling, laughing kids are truly special and it is lovely to be able to spoil them once a year.
Have a Merry Christmas, happy New Year and keep safe.
Harcourts is proud to be part of the Hanmer community. Over the past twenty years we have been the number one real estate company in Hanmer. We would like to thank all those clients who have supported us and we look forward to continuing the wonderful relationship we have had for many more years.
Our mission is simple: to deliver exceptional, personal service and the best possible outcomes for every client we work with. At Harcourts Twiss-Keir, we like setting and achieving exceptionally high standards.
Thinking of selling, buying or renting, call one of our local consultants today 03 315 7084.
The earthquake on Monday morning brought back memories of the Christchurch earthquakes in 2010 and 2011, but this time we have not been so heavily impacted. What is difficult is knowing what those poor people in and around the Kaikoura coast are going through, their isolation is something we didn’t have to contend with and would certainly add to the pressure.
I assume we, in areas not impacted, are feeling what other parts of New Zealand must have felt after the Christchurch quakes. It is a feeling of knowing people are in stress and wanting to help but not knowing how. It feels like we are operating in a bubble with one eye on the news and one eye on our own lives.
I do know the initial impacts are greatest but the clean-up of lives and the physical environment takes years and the support needs to continue through this. There are plenty of ways to help – donating time and resources or calling affected friends. I remember myself feeling moved by all the calls from not only around the country but around the world when the quakes hit. It gives you a sense of support that gets you through.
From our side the quake has had a long ranging effect – we have people in our business and family with property in the area. We have parents of staff who live in the area and we have business associates with business interests in the area. All of these people need our support and we are here to offer it no matter how small. It is important to keep focus on the things that matter and right now people’s lives matter more than jobs and by keeping that in mind we will do the right thing.
Twiss Keir Realty wishes all the best to all the people in Kaikoura and look forward to being able to assist in some way.
Hanmer Springs is a hidden gem on our doorstep. We are lucky to have such a great holiday destination only 1.5 hours from Christchurch. As a town it is the perfect getaway for the family, offering great activities for the kids and plenty of great places to eat and drink for the adults. As I have discovered on numerous occasions the weather is often much better than the Garden City.
The real estate market in Hanmer has been extremely active over the past twelve months with visitor numbers at all-time highs. The commercial centre of Hanmer is flying, we have seen a number of commercial developments under construction. Those that are completed have generally sold or leased prior to completion. In addition, residential housing on the market today offers extremely good value with most properties offering positive returns for those willing to buy and rent through the local holiday letting services.
Throw in the easy drive to Hanmer and you have a brilliant place to buy both commercial and residential properties. With strong returns, potential for capital gains I can only see the values increasing in Hanmer. Demand for good homes particularly close into the centre of the township is not subsiding and won’t for some time.
There are still some key elements required for the town to offer a full spectrum of activities with cinema being an obvious requirement, but given Hanmer has around 1000 permanent residents the town is extremely well equipped. With record immigration numbers looking likely to increase over the next few years one can Hanmer Springs appeal only increasing and along with it house prices.
If you are heading to Hanmer please do drop in to say hi to Jackie and the team at Harcourts and get their take on the exciting town of Hanmer Springs. It will be well worth your while.
Licensed Business Owner of Harcourts Twiss-Keir Realty
Licensed Business Owner of Harcourts Twiss-Keir Realty