Dunedin Market Report May 2023

Another month with the median value at $570,000, making it 3 months in a row at this level. Increased buyer activity has been matched by increased choice of property, however, listing volumes are starting to decline which is often the way during Winter. There was a total of 127 sales in April compared with 125 the year previous. Median days on the market was 44, similar to last month and considerably shorter than February which was 62 days.

All of this points to renewed confidence in the Dunedin market, and a belief that we may have seen the worst of the financial cycle and mortgage rate rises. Recent news such as lower long-term mortgage rates, an easing in the LVR (lending to value ratio), and adjusted rules around assessing a borrower’s expenditure have helped bolster activity.

However, property still remains very price sensitive, and presentation matched with the right selling strategy, or correct list price is key to getting sold.

There is increased pressure on rental property supply and rents are rising as a result. Investors are starting to take interest again, so right now there is a window of opportunity for first-home buyers to act with less competition. For anyone looking to sell and upgrade the relative price difference is likely the lowest it will be, so we urge you to act now.

Homes that present well in the Winter months with good sunshine hours will attract interest, and those sellers will be faced with less competition from other listings.

Changes to Kainga Ora First Home Loan Scheme

During Budget 2022 the Government announced some changes to the Kainga Ora First Home Loan Scheme (you may know this as the 5% deposit loan scheme) effective 1 June 2022. Why is this important? Because right now every single bank (with the exception of Westpac) has tough restrictions on lending to anyone without a 20% deposit, meaning many first home buyers in particular are locked out of the property market.

Summary of the changes.

Increases to the house cap for the First Home Loan Grant: The First Home Loan Grant is effectively free money the Government will give first home loan buyers (joint borrowers buying a new house, and in some cases buying land, can get up to $20k and up to $10k for an existing property. Here are the price caps for our Region:

Removal of the First Home Loan house price caps altogether: Some banks (such as Westpac, SBS, CO-OP etc) have partnered with Kainga Ora to offer low deposit loans (think loans for as low as 5% deposit here). Previously you only qualified for these loans if you met a regional house cap (eg $425k in Dunedin and $600k in Queenstown). This effectively meant that unless you were purchasing a dog kennel you didn’t qualify for this loan product. Well, the good news is that these caps are no more! In simple terms if you can afford to service it then you can borrow it…

With house price caps removed the market for first time buyers suddenly got a whole lot more realistic (and I have 4 clients who couldn’t get a loan two weeks ago who can now buy a house).

Here’s what you need to know:

• Clients only need a minimum 5% deposit

• Have an income of less than $95,000 for an individual borrower or $150,000 for an individual borrower with dependents

• Have an income of less than $150,000 for two or more borrowers

• Are a first home buyer or second-chance buyer

• Are a New Zealand Citizen, Permanent Resident or a Resident Visa holder who is 'ordinarily resident in New Zealand

• Have been in the same employment for 12 months or the same industry for two years.

I’ve tried to keep a slightly complicated process as simple as possible, so if you have any more questions and would like to know what these changes mean for you call into Harcourts and have a chat with Ken Cochrane from Mortgage Express. You may be in a position to shoot a bit higher for your next home.

Staging your home, yourself

It’s time to sell your home, and you’ve decided to stage the place yourself for potential buyers. That’s an excellent choice – not only does staging tend to facilitate sales, but it can increase the amount of money you get for your property. In fact, some professional stagers estimate that their services boost their clients’ bottom line by up to 10%.

You can try your hand at staging to reap the same financial benefits when selling your home. To make the process a bit easier, here are seven areas to focus on when sprucing up your space:

1. The Living Room
People coming to view your home want to know that they can live comfortably in the living room. If the area is empty, it’s hard for them to visualise their own furniture fitting within the room’s parameters. On the other hand, a cluttered room will feel cramped and tiny, which is not what anyone wants while relaxing in the den.
So, focus on emptying the excess – everything from overloaded bookshelves to coffee tables covered in magazines. You can leave a few knickknacks behind to make the living room look, well, lived-in. Just be sure that the final product looks like an intimate, comfortable conversation space. Use just enough to show the space’s potential without overdoing it.

2. Kitchen
According to both buyers and sellers, the second most important space to stage is the kitchen. It might be an odd choice, because it doesn’t house nearly as much furniture as other rooms. But the kitchen is a huge selling point in your home, and it should be showcased as the best version of itself.

So, once again, remove any clutter from your countertops. Instead, showcase up to three small appliances on your countertops. You can keep an accessory or two alongside these items, too — for example,

3. Master Bedroom
For the next owner of your home, the master bedroom will become their retreat. Therefore, you don’t want the space to look too personalised to you. You probably painted the area or chose a duvet cover that you love. But if these items are brightly coloured or boldly printed, other buyers won’t be able to picture themselves living there.
So, replace any bright colours with a look that’s more neutral. Re-paint the walls and replace the linens if necessary. Once again, be sure to clear any clutter away - this is especially true if you have extra-large furniture that makes your master feel smaller than it is — keep the basics only, and the bedroom will appear spacious.

4. Bathrooms
Another huge selling point for your home — the bathrooms. Whether you have one or ten, each one should be staged with care to show them off as luxurious retreats, which is what buyers are looking for. Once again, you’ll start by removing clutter from countertops and organising your bathroom bottles so that storage seems sufficient. Then, you could make a few swaps to make the space appear swanky. New towels and updated cabinet hardware won’t break the bank, but they’ll make a huge difference in the eyes of potential buyers.

5. Dining Room
An empty dining room will look dark and unwelcoming. On the other hand, a simply staged space will show it off as a comfortable place for friends and family to gather. Start by ensuring you have the right-sized dining table — something too big will make the space look extra-small. But you don’t want the room’s dimensions to dwarf your table either, so add a leaf or pop a new tabletop over your piece’s base to make it proportional.

Finish the project by either setting the table or placing a centrepiece on it. No matter what you do, make sure the final look is inviting. Otherwise, potential buyers won’t be able to envision themselves enjoying meals within your dining room.

6. Additional Bedrooms
The master bedroom should get the most attention, but the rest of your bedrooms will need attention pre-sale. Start in the closets to reorganise clothes and remove any clutter — every storage place should appear to have ample space. Then, you’ll want to neutralise the decor again. And, if you’re using extra bedrooms as catch-all rooms without an intended purpose, give them one while staging. For example, put a desk in one guest room, so it shows as an office, or rebuild your child’s crib to present a smaller space as a nursery.

7. Exterior Spaces
Finally, don’t forget your home’s outdoor spaces — the first that potential buyers will see is the front of your property, after all. An easy way to figure out how to improve your kerb appeal is to park your car where realtors will. Get out of the vehicle and scrutinise the appearance of your place.

From there, you’ll be able to pinpoint what needs to be done. For many buyers, a power wash is in order to make the home’s facade, the driveway or both appear to be sparkling. Weeding garden beds and adding some greens could further beautify your abode. There are so many ways to improve your property’s kerb appeal — choose a few and revolutionise the look of your home from the outside in.

No matter how you choose to stage your place, the effort is always worth it. So, take the time to de-clutter and lightly decorate, and you’ll see just how many rewards — and how much of a profit — you can reap from the process.