Can Peninsula property remain resilient? – November Property Update

How long can the Peninsula remain resilient? 

Shaun Patterson and Chris Bayley– Directors & Co-Owners of Bayleys Coromandel. 

It is well reported that across the country, property values are falling (REINZ house price index down 11% since the November 2021 peak), with cities feeling the biggest pinch. It is less known that the Coromandel has remained one of the most resilient markets in the country, staying reasonably stable through this period. Queenstown, Coromandel and Marlborough being the most sheltered from the decline surely points to the value people increasingly put on lifestyle and work life balance post pandemic. This makes our slice of paradise all the more appealing! 

With evidence of a correction only arriving this quarter, median prices on the Peninsula remained at $985,000 in September. Interestingly, this is still 11.3% up on the same time last year. 

Headwinds however are not easing, with inflationary pressure continuing to drive interest rates up. A 2 year fixed rate mortgage was 2.85% a year ago. Today, the same would be 6.2%. In cash terms, a gap which many will find difficult to bridge when a re-fix arises. 

Combined with the fact that more than 70% of our buyers come from outside the region, (mainly Auckland, Waikato and BOP), where the sharp end of the correction has been felt, and it is no surprise we are seeing enquiry volume down and the number of homes on the market increasing. 

In real estate, price is just one of the key indicators we track. The others should be looked at just as closely in the current market. 

Median days to sell in September fell at 62 days across the Peninsula. For context, in September last year this was 24 days. 

Quarterly number of sales sits at half of last year and there are 132 properties on the market in Whitianga, compared with approximately 50 at the same time last year. 

Less sales are happening, and they are taking longer. 

These are early indicators for a more pronounced pricing adjustment, however the area’s seasonal boost will also be a key factor in just how resilient our market remains.

November Market Update 

A snapshot of November with Evan Kaska, mortgage adviser with Vega.

It’s fair to say that buying a property is a complicated process. It is also likely to be one of the biggest purchases of your life. If it’s done right it can be the most rewarding experience and you’ll likely thank yourself for it later down the track. 

When it comes to securing finance for a property, there are two main things the banks will look for: 

1. How much deposit/equity you have available; and 
2. Your ability to repay the loan (now and in the future) 

Both of the above are complicated beasts because they are a constantly moving target. But, this is something that a qualified mortgage adviser can help you to understand and explain to the bank. If someone is declined by the bank, it’s by no means the end of the road. You can seek other lenders, but to save yourself time and effort it’s often best to seek advice from a mortgage adviser because they know all of the lenders out there and often it’s not a ‘one size fits all’ scenario – there will likely be a solution out there that fits your needs. If not, you’ll receive feedback on how to get ‘buyer ready’. The best thing is that you can establish an ongoing relationship with your mortgage adviser, and most of the time you won’t pay a cent for the service you receive because they are typically paid in commission from the lender once the loan is approved. 

Disclaimer: This update is not intended as investment advice and every attempt was made to ensure accuracy at the time of writing. 

Information for buying and selling property in Whitianga

If you’d like to discuss or have questions about buying, selling or investing in property in Whitianga then please contact Neill Fawcett or Alana Baker. More about them can be found on their business page linked below.

The Whitianga market – an agent’s perspective. 

Being a real estate agent is quite possibly one of the more rewarding careers one could have chosen. 

It is certainly one of the more intimate when it comes to relationships with buyers and sellers. 

At the initial stage we have access to all manner of people’s homes here in Whitianga, from the classic old baches with generations of history, to the most modern, architecturally designed homes that could grace the pages of any international magazine. 

Some share with us their reasons for selling and these can be as exciting as upgrading to a bigger place, to downsizing as the kids leave home. And the very real, very human stories of bereavements and marriage fails. We witness all these and it affects us as much as anyone. 

In our relationship with buyers we are with them, many from the very first house they view, to the last they eventually buy. A fantastic privilege to be such a vital cog in their journey. 

Today, as we read of the national market’s challenging head winds, of rising interest rates, of ballooning mortgage payments being felt by many, we are all too aware they whilst they may be statistics, to us, every statistic speaks of a Kiwi’s plight. 

Of a real person’s battle to buy that first home; to upgrade to cater for a growing family; or a retired couple desperate to afford an investment for their Golden Years. 

This is our world. 

A world of people. Of emotions. Of elation. And yes, of despair as that offer is superseded at auction. 

Or the sale not quite reaching hoped for levels. And wonderfully, those sale prices well beyond the vendors wildest dreams that change their lives forever. 

We’d not change our jobs for anything. It’s the best one we could have. 

Alana and I welcome all of you to become part of our world by listing your property with us, or calling us now to get us to help you find that dream home. 

You will not be disappointed. 

– Neill Fawcett