Throughout this exceptional year, Bayleys salespeople across the nation have worked tirelessly to help thousands of Kiwis secure their dream homes.
Now, as the holiday season approaches, there will be many more looking to secure their next home. The market is responding with a fresh influx of listings, and a sense of urgency to secure property before the holiday season kicks in.
Let's take a closer look at the current state of the housing market.
Sales activity began recovering this Spring
In October 2023, approximately 5,600 homes were sold across New Zealand. This figure stands somewhere between last year's sluggish market and a typical pre-pandemic year, showcasing a healthy increase in sales activity.
Supply of homes for sale is tightening
Currently, there are 25,600 homes for sale across New Zealand, reflecting a decrease in supply compared to the previous year. The supply of new listings remains below typical pre-pandemic levels, indicating a competitive market for prospective buyers.
House prices are rising
The New Zealand house price index has been steadily rising for the past four months with prices now four percent above the low point from May 2023 and the median house price is now at $795,000.
Regional results generally positive
Prices in most regions have experienced slight increases over recent months, with Auckland and Wellington showing the most pronounced upward trends.
Outlook for the market
The New Zealand housing market has undergone substantial changes over the past year. Just 12 months ago, we faced uncertain interest rates and declining prices. However, the current landscape presents a different picture.
Interest rates likely at peak
Economists are generally predicting that interest rates have reached or are near their peak. The latest inflation data shows inflation tracking downwards and commentators are becoming less concerned about the risk of the Reserve Bank of New Zealand (RBNZ) further increasing the official cash rate (OCR). Overall, there is a sense that interest rates are becoming more stable, although a significant drop in the short-term is unlikely.
Looking forward there are several factors are likely to shape the housing market in the coming months.
Record migration and rental pressure
The past 12 months have witnessed a net gain of 118,800 migrants. While the foreign buyer ban means these new migrants are unlikely to immediately buy a home, this surge in population is putting pressure on the rental market. Rental growth is at near-historic highs, likely prompting increased activity from both investors and first-time home buyers.
Government policies and market impact
The new coalition government has introduced policies aimed at boosting the housing market. The government has indicated it will progressively restore mortgage interest deductibility for rental homes over the next three years. This is expected to boost demand from property investors, who were until recently in a holding pattern. In conclusion, while uncertainties have characterised the New Zealand housing market in recent years, the current landscape suggests a more stable and optimistic outlook. Record migration, government policies, and increased market activity are likely to contribute to continued, albeit gradual, price rises.
As we enter the holiday season and send-off 2023, Bayleys would like to express its heartfelt gratitude to our nationwide network of clients and customers for their unwavering support. So, let's raise our glasses and say, "Cheers, New Zealand!" Here's to an Altogether Better holiday season.