With just 84 sales for the first month of 2021, this must be one of the lowest ever recorded months. The corresponding time last year saw 105 sales. This could be a reflection of the somewhat extended holiday period with most families only returning from the break around mid-January, leaving only a couple of weeks left for the month.
Our January median sale price took a big jump up to $618,000, a rise of over 12% based on last year’s figure of $548,000 and in comparison, to the median for December 2020 of $589,000.
Days to sell for the month pushed out to 30, again a possible reflection from the extended Dec/Jan holiday period.
Major lenders while lowering interest rates to a low of 2.29% for a year also have/are implementing new restrictions around the LVR and changing requirements for deposits. Remember to get in early with your preferred lender, we have noted that some lenders are backlogged with applications so the timeline for finance to be confirmed is starting to stretch out.
As always if you are thinking anything about real estate give us a call here at Cutlers, we would love to help whether it is advice or more options for going to the market. It is a fantastic time to sell.
The majority of the RTA Amendment Act 2020 came into effect last week and it remains to be seen just how much effect it will have on the Dunedin rental market, particularly the student market.
Main thing that people are concerned about is the uncertainty around fixed term leases automatically becoming periodic and how this will affect the way we go about advertising flats in the future. We have amended our tenancy agreements without contracting outside of the Act but we won’t know exactly how the tribunal will view it until it has been tested.
Notice periods for periodic tenancies have now changed. The ‘3 strike rule’ is now to be implemented. Basically it’s near impossible to remove unwanted tenants unless you decide to sell, renovate or move in yourself. Our advice is to keep rents at a reasonable level to increase the pool of applicants and reduce the risk of ending up with tenants that will cause unnecessary trouble.
Tenants are now also allowed to make ‘minor’ alterations. The term ‘minor’ is open to interpretation but the simplest way to determine if a change is minor or not is to ask whether things can easily be changed back to the way they were at the start as the tenant vacates. If the answer is ‘no’ then it’s not a reasonable request.
Things are always hectic through January and February as we manage large numbers of incoming and outgoing tenants at the same time but things have started to quiet down. Getting each property compliant with the healthy homes regulations is the next major task and this will be our main priority through March and April.
The simplest way to describe the university investment market at the moment is that you have a pendulum sitting at 5.5%. Variables such as location, age, cladding/ materials, types of tenants, room for rent increases etc will determine whether that pendulum swings towards 5% or 6%. Near new or completely renovated properties in great locations are likely to sell at close to 5% while older properties that haven’t been well maintained are likely to sell closer to 6%.
There is still a lack of supply of student rental properties so we expect rents to increase for 2022. Problem is that if you’re looking to buy, there’s not a lot for sale which (along with low interest rates) is driving prices up.
We’re looking forward to what will be yet another interesting year and hopefully it isn’t interrupted by another level 4 lockdown.