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- Real estate markets set to spring into action
A negligible fall in national property values in July, and even some increases in some parts of New Zealand, all but confirm the good times for real estate are around the corner.
According to CoreLogic’s House Price Index (HPI), there was a wafer-thin 0.4% drop in July that also happens to be the smallest monthly decline since January, demonstrating a significant deceleration from the previous month's 1.2% fall[i].
Kelvin Davidson, Chief Property Economist at CoreLogic NZ, pointed out that there were promising signs in key regions, with prices stabilising or even increasing.
He highlighted that in five of Auckland's seven main sub-markets, values were either flat or higher in July, while most other main centres experienced only a marginal decline of 0.2% or 0.3% during the month.
Additionally, the wider Wellington market saw an increase of 0.3%, marking the city's first rise since February 2022.
Kelvin Davidson acknowledged that market indicators started looking stronger in June and that positive momentum has continued in July, and that several key factors were pointing to a trough for property prices. These factors include a broad peak for mortgage rates, albeit some further tweaks by the banks can’t be ruled out, an easing in the Credit Contracts and Consumer Finance (CCCA) and Loan to Valuation (LVR) rules, still-high employment, and solid net migration flows.
“The easing in LVR policy has already helped more low deposit investors into the market, such as those with 35-40% deposits who were previously locked out,” Kelvin said.
“We’ve also seen a pick-up in the volume of sales, stock on the market is dropping, and this is likely starting to result in the re-emergence of competitive price pressures.”
Keith Niederer, General Manager NZ, Raine & Horne, remarked, "The current market indicators, along with the positive trends witnessed in June and July, point towards a trough for house prices.
“While we cannot completely rule out minor adjustments in mortgage rates or banking policies, it seems that New Zealand’s property market is entering a phase of relative stability and possible growth as the spring months approach.”
If you’re looking to buy or sell a property, con tact your local Raine & Horne estate agent today.