Market Update July 2020
Prices up, sales up. That was the market in July for residential property in New Zealand. National median house prices were up 3.4% since last month, an increase of $22,000. That gives 14.8% in the last 12 months, up $85,000 from July 2019.
Every region in the country recorded record price increases in the last 12 months. The lowest percentage increase was Canterbury at 6.7% where the median price increased by $39,000.
The highest percentage increase was in the Gisborne region at 36%, where the median prices increased by $84,900. Even Queenstown – Lakes which was predicted to hit hard due to the lack of international tourists enjoyed a record median price in July up $20,000 to $1,100,000.
Rotorua was the same story where median prices rose 1.7% and took 6 days less to sell than the month before. Nationally the number of properties for sale dropped for the 13th month in a row. The time to sell was down 7 days compared to the same month last year and now takes 34 days on average to sell.
Buying and Selling Older Houses
For the purposes of our article we will define older as houses built before the 1940’s. The Villa was the most common house style built from the 1880’s to the 1920’s. Next came the bungalow (with some transitional style) followed by the Art Deco style in the 1930’s and onwards.
These older houses have a lot of architectural appeal to many buyers. Another appealing aspect is often the prime location where those houses were built. The well proven real estate investment rule is location, location, location and this certainly applies to most older “character” homes. They all however present a range of problems and maintenance issues that modern homes don’t have.
Prior to the Hawkes Bay earthquake of 1931 there was largely no building standards. That devastating 7.8 magnitude destroyed most of central Napier and Hastings and killed 256 people. Everything changed after that. In 1935 the first set of standards came into effect. Today these character homes are now 80 – 140 years old. Although they were mostly built by craftsmen using Kauri, Rimu, Totara and other native hardwoods, the passage of time takes it’s toll.
A list of key components that require careful inspection include:
- *Wooden piles – rotting, splitting, sinking.
Unlevel floors – often caused by sinking piles.
- Rusted roofing – due to lack of maintenance.
- *Skim and sarking – a fire risk.
- *Electric wiring – perished old rubber insulation.
- Asbestos – asbestos cement for roofing, weatherboards and floor
- No insulation – most had no insulation. Wall insulation is hard to install; ceiling and underfloor is easier.
- *Insurance – companies often won’t insure houses unless these are
Buying an older house may mean setting aside a significant amount of money for restorations. Selling will not be possible if a mortgage is required as banks won’t lend without insurance – see in the above list*. There is a strong market for older houses.
Buyers fall in love with their character and location. Always have a professional home inspection so the ownership dream does not become a financial nightmare.