Initial thoughts following the Government’s announcement yesterday of integrated measures to build new homes, freeing up land for residential development and infrastructural investment.
First Home Loan & Grant.
Good news that the maximum yearly income for a single person has increased 11.7% to $95,000 and combined maximum incomes increased 13.35% to $150,000.
Price Caps for New Homes:
The First Home Grant can be used to help purchase new builds with the total combined costs for the land purchase and the house construction to be within the relevant house price caps. For Southland the cap is $500,000
New build properties include:
newly built dwellings that received a building code compliance certificate less than 12 months before the date you apply for the First Home Grant
vacant sections that will be built on
house and land packages purchased off the plans
Housing Acceleration Fund:
$3.8 billion to speed up housing developments. To leverage benefits across our region is very much dependent on the supply response from local and regional councils and the private sectors to make available residential land and build opportunities at affordable price points. The Bright-line Test for new builds remaining at 5 years represents a tangible benefit for those seeking a healthy home constructed to the new building code.
Further economic value add for our region derived from a busy construction sector and employment through targeted skills-based training would also sit in the good news column.
Extending the Bright line test from five to ten years for second/ investment properties:
This is where it gets interesting for many people who have saved to have sufficient equity to purchase a second property to reflect their financial position, stage of life or overall financial goals.
Investors will likely not over react, and take time to consult and validate their strategy to buy.
Recalibrating thinking for a longer hold is not all bad, as it’s well know in both property and shares, the long-term investors are the ones who succeed achieving their goals.
Holding rental investments for a minimum ten years would likely create the need for owners to maintain their property asset beyond the base of simply meeting compliance for the five Healthy Homes Standards to rent the property.
Whether or not tenants become unwitting pawns, and left paying the price for these changes we hope does not play out in our region.
From a Government standpoint, you don’t eat the vegetables planted today, so only time will tell how the new measures deliver good news for first home buyer’s and non-owner property occupiers.
Bindi Norwell, Chief Executive at REINZ says: “The unrelenting pace of property sales continued in February, with a 14.6% uplift on sales volumes compared to the same time last year; the highest number of properties sold for the month of February in 14 years.
It’s highly likely that some of this uplift can be attributed to both investors and owner-occupiers looking to purchase ahead of the LVR restrictions coming back into effect in March and the slight uplift in listings we’ve seen over the last couple of months.
“Median house prices in Southland increased 22.5% annually in February from $320,000 in 2020 to $392,000 in 2021. Activity in the region is expected to remain steady with potentially lower levels of investor interest in the coming months as LVRs return.”
The median sell price for Invercargill City last month was $390,000.
Southland -Compared to February 2020
• Median Price up 22.5%
• Sales Count up 15.3%
• The current Days to Sell 23, is much less than the 10-year average
Southland: “Median house prices increased 13.6% year-on-year to $375,000 in December 2020, up from $330,000 in December 2019. The strength of the market locally saw Southland with the highest increase in house price values for the South Island with a 15.7% increase in the HPI year-on-year.
The market has remained relatively steady over the last few months with sales volumes increasing 25.5% year-on-year from 157 in December 2019 to 197 in December 2020 – this is the highest sales count for a December month in 14 years. Listings increased 23.2% annually with 170 new properties coming to the market in December, however recent high sales volumes have resulted in inventory decreasing -19.7% year-on-year to the lowest level on record. Looking forward, we would expect to see the market continue in a similar manner in the coming months.” Bindi Norwell REINZ CEO
The current Days to Sell of 22 days is less than the 10-year average for December which is 32 days.
New Zealand: The highest number of properties sold in NZ in a December month, ever! The number of residential properties sold in December 2020 across New Zealand increased by 36.6% from December 2019 (from 6,543 to 8,935) – the highest number of properties sold in a December month since REINZ records began.
Another four years is usually reserved for rugby teams unsuccessful at Rugby World Cup to get sorted before the next event. In this instance Southland has a further four years to conceive and unleash a credible plan for transition of the Tiwai Point aluminium smelter.
Serve the moment, as hindsight alone lets us know when trends have changed.
Bindi Norwell, Chief Executive at REINZ says “November was an incredible month in terms of the number of properties sold, with just shy of 10,000 properties sold over 30 days (9,885). The last time we saw a similar level of sales volumes was back in March 2007 – 164 months ago – before the national recession and Global Financial Crisis started impacting New Zealand’s property market.”
Highest number of properties sold in NZ for 42 months, according to latest REINZ data The number of residential properties sold in September across New Zealand increased by 37.1% from the same time last year (from 6,112 to 8,377
Bindi Norwell, Chief Executive at REINZ says: “Normally one month out from an election, people start to take a wait and see approach and sales volumes begin easing off. However, 2020 appears to continue in its trend of being an anomaly, with the number of properties since March 2017, when the country was last experiencing such growth.
Highlighting just how much sales volumes around the country continue to defy expectations, 13 regions had annual sales volumes increases in excess of 20% and 10 regions had increases in excess of 30% – the highest number of regions with this level of sales volume increase since April 2015,” continues Norwell.
Let’s face it, we all hate going to the clothing store only to find the size range depleted, especially when it comes to the one size, you’re after. Same in property when you procrastinate by not making a move, and when you do choice is not what you hoped for. Worse still the advice your receiving is low stock availability is unlikely to change in the immediate future.
In real estate the service obligation and expectation requires the sales agent be in regular communication with clients. My advice would be buyers also need to be proactive to expedite regular contact with their go to sales agents to be first in the know. To be passive and wait for email alerts, Facebook posts to update on the latest listing is all well and good, except for the fact the buyer pool in your area are also receiving the same property push updates.
First day of spring, and it will be interesting to report back in 30-days if the historical lift in property stock has occurred in 2020. Historical trends would suggest we should be able to report back in the affirmative, however in these times past performance is no longer the yardstick to predict what will likely play out this month.
The following showcases dwellings (excluding land) available to purchase on Trademe over the past two months in my city. July 1st to September 1st there has been a -24% shift in available stock of dwellings (all types). Waiting for reemergence based on past indicators especially if one is in the market to purchase right now, may end in disappointment unless you are confident you are market ready.
Do yourself a favour to stop, take five and read your real estate bio on the companies ‘our team’ page. Yesterday’s performance in some instances may not correlate to how you are travelling today.
I’m currently undertaking some prospect research across multiple brands to build and information asset to support my new BDM role. Following are some observations.
I felt truly inspired and in awe of many award-winning salespersons, that year after year have consistently achieved high performance rankings for their brand. They clearly possess talent, skills, and leverage a systemised approach to their business, being the busy people. In many cases they have layered up with PA’s and or sales associates forming a team to create market momentum. A quick look at their current listings and they are well stocked and their bio’s match reality as high performers focused on positive outcomes.
There are other bio’s with salespeople promoting historical agency awards from 5 years and longer ago, yet today they sit on one and often no listings at all. The reality is these agents need to think like a start up to reignite their careers. Hopefully their sales managers are having upfront discussions, offering guidance and support to stop further regression. Their bios should be reviewed and dialled back to reflect reality as the embellished wordsmith spin needs to be earnt to be credible. The public can quickly assimilate how the salesperson is travelling and their sometimes-negative perception can be hard to shift. Bio content that’s clearly passed it’s used by date is neither helpful nor credible.
There was clearly a strong intake of new salesperson’s back in February and March looking at their licence issue dates. Naturally they haven’t been active long enough to be recognised by the company and peers at annual awards. Reading their personal and career pathways highlights just how deep the talent pool is from which the sector draws new people to a real estate career. What staggers me is their agency company will hang them out in the public domain with no listings against their name. Some agencies attempt to mask reality by assigning the one property listing across multiple salespersons to show they have stock to sell. Why onboard new salesperson’s if they can’t be actively coached to consistently carry 1-2 exclusive listings. I hope next time I review these bios there are happy vendor testimonials dominating the script and listing levels have moved up.
Prospective vendors just like me research, and bios need to be kept fresh, current and credible.
I’m getting good at reading the individuals bio first, then clicking their ‘latest listings’ button only to find my perception is more accurate and a mismatch to the words of their bio.
Maybe the sales manager at every performance review meeting could start by passing over a copy of the salespersons bio and asking them what needs changed (if anything). Things just got real in this scenario and that’s not a bad thing unless that conversation is handled poorly.
10am -11am today, a rollercoaster hour packed with some really good stuff—-
Just off a great Zoom event along with colleagues from across the Professionals group with one of Australasia’s best real estate luminaries Mr. Lee Woodward presenting and sharing.
Here are some random take-outs.
New is great, and do not expect to revert back to the old default way of doing business.
Salespeople consider connecting with fewer people for better reasons
Delete ‘buyers’ from one’s vocab and substitute with ‘purchaser community’ and connect with continuous planned marketing.
Communication styles have changed. The goal now is to be connected with the right people at the right time, with the right info.
There is a powerful difference between a client being known to us versus a new client. Existing client’s needs and wants should be known and can acted upon real time, versus the time required to truly discover and validate new client needs.
Watching the half-time huddle at the rugby in the weekend made me think about who supports and trains the captain and the senior leadership players. Like their teammates they have been in the thick of the game, yet it is all eyes and ears on them for what needs done or improved upon before the whistle blows game on again.
In real estate, the agency principal and branch manager are key leadership roles. The Professionals board recognise this and convene a ‘huddle’ for the leadership team to gather from across the country to connect and share. The really smart aspect of this event is an invitation is extended to a select number of future leaders from within the group. Recalling my first attendance at the 2019 event, the chatter was constant over the two days; so, bring on Rotorua 2020.