August Housing Market Update – Key Insights for New Builds

As we move through August 2024, the latest CoreLogic Housing Chart Pack provides a comprehensive view of New Zealand's housing market, revealing key trends that new build buyers should be aware of.

Market Overview and New Builds Insight:

‍The report indicates that while sales activity picked up in July, overall volumes are still below the seasonal norms due to elevated mortgage rates, which are just beginning to decline. This presents a unique opportunity for buyers looking at new builds. Lower mortgage rates are expected in the coming months, which may ease the financial burden and open doors for new build homebuyers.

High Levels of Listings:

‍One notable trend is the high number of available listings. For new build buyers, this translates into more choices and less pressure when it comes to decision-making. As the market continues to offer a broader selection, buyers can afford to be more selective and find the new build that best suits their needs.

Why Now Is a Good Time for New Builds:

• Mortgage Rate Cuts: With the Reserve Bank of New Zealand recently reducing the OCR to 5.25%, future rate cuts are anticipated, potentially bringing typical mortgage rates down to around 5.5% by the end of 2025. This is a positive sign for those considering a new build, as reduced rates will lower the overall cost of borrowing.
• Government Incentives for New Builds: New builds continue to benefit from favourable lending conditions, with banks being more flexible about loan-to-value ratio (LVR) requirements for new build properties. This means that first-time homebuyers can often secure financing with a lower deposit, making new builds a more accessible option.
• Long-Term Value: With less competition from investors and stretched affordability for existing properties, new builds represent a stable and potentially more lucrative investment. They are likely to see greater demand as buyers look for well-designed, energy-efficient, and low-maintenance homes.

In conclusion, while the housing market remains relatively subdued, the focus on new builds is growing, thanks to lower mortgage rates, attractive financing options, and a wider range of choices. For new build buyers, this could be the perfect time to explore the market and make a strategic move.

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