September 26, 2024
As we enter the final quarter of 2024, the New Zealand property market continues to adjust in response to changing economic conditions. Recent data from CoreLogic reveals key trends that every buyer, seller, and investor should be aware of as we move into the latter months of the year.
The Reserve Bank’s recent decision to cut the Official Cash Rate (OCR) has led to a slow but positive increase in property sales, with August seeing a 1.6% rise in activity compared to the previous year. Despite this, sales volumes remain about 15% below normal levels, largely due to buyers taking their time amidst relatively high mortgage rates. It’s expected that as mortgage rates continue to fall, we’ll see more buyers re-enter the market, slowly increasing competition and applying upward pressure on prices.
Property values continued to experience slight declines in August, with a national drop of 0.5%—the sixth consecutive monthly decline. Auckland was hit particularly hard, with prices falling 6% from their February mini-peak. In contrast, Christchurch has shown more resilience, with values holding steady. First-home buyers remain active, accounting for 27% of the market in August, supported by lower house prices and favourable financing options.
While interest rate cuts will likely fuel further activity, a fresh housing boom is unlikely. With high levels of listings, affordability issues, and a weakening labor market, buyers and investors are expected to remain cautious. This means a period of relative stability with only modest price growth anticipated over the next 12 months.
For anyone looking to buy or invest, this stabilising market presents an opportunity to secure properties at competitive prices, but it’s essential to keep a close eye on economic factors and how they might influence demand.
Source:
KEY2 Real Estate and Core Logic
