Is The Kiwi Property Market On The Turn?

The Real Estate Institute of New Zealand’s (REINZ) House Price Index (HPI) reported a 16.7% decline nationally from the market peak reached in 2021. This has taken real inflation-adjusted house prices back to their pre-pandemic level at the start of 2020.

But in August the Reserve Bank of New Zealand cut the official cash rate by 0.25% and has signalled that significant further cuts would be made over the next 18 month. Business confidence took a leg up, bouncing to a net 51% positive from just 6% in response, banking on the end of the recession which has gripped the country.

Net Migration is also falling away rapidly, according to statistics New Zealand, and we are seeing more property coming on market with inventories up by 30% compared with last year, while sales volumes are down compared with last year and more property being subsequently withdrawn from market failing to find a buyer at their desired asking price.

So net net, it seems likely that as we go into spring and summer in New Zealand, demand might be higher thanks to lower rates but offset by lower migration, while supply is higher but transaction volumes are lower. Which begs the question, are we seeing the property market turning?

Well, the latest report, or should that be marketing document from the REINZ for August shows “signs of increased confidence, optimism and activity compared to the previous year. While the overall sales volume slightly declined, several regions reported notable increases in activity, and year-on-year listing numbers continue to rise”.

All up, its probably too soon to talk about an uptick in property values, but there may well be more property coming on to the market, and an uptick in sales to boot. Further rate cuts will help, and of course the loser regulations on investment property may also assist, but migration driven demand is falling.

Its probably way too early to declare victory, for now. REINZ Chief Executive Jen Baird said August provided a sense of confidence and positivity to the property market. I would remain more cautious. Auckland still seems to be more exposed while some South Island markets though smaller are more positive. And there is considerable uncertainty ahead.

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[LilyWhiteAkAConspiracyRealist]

Not wanting to wish ill on anyone, but I am eager for such falls in costs and migration to show up here!

[CA]

you should do another video with that guy from Ireland you interviewed a few years ago.

[williamcrossan]

Those prices are not cheap vs the wages in NZ.

[tonykennedy]

Here in Canada, the Trudeau regime raised the national mortgage insurance ceiling price to 1.5 million (or close to that) for a single family home to prop up the failing property markets. Thereby taking risk for the lenders. The problem is, jobs are declining. Who's buying homes?

[mylimomelbourne]

The poor old New Zealander getting squeezed out off existence, is it raining or is the a.b.c taking a leak in their pockets like us

[grizzz]

my rate's have gone up by 13 %, but its not inflation . so we might the test bed to tax people off the land . but that is all tax deductable for investers

[redsed]

how the gumboot sales going? baaa baaaa

[modvs]

Who gives a shit. We don't live NZ.