Signs of an immediate uplift in the momentum of the New Zealand property market have emerged following the Reserve Bank of New Zealand’s decision to cut the Official Cash Rate (OCR) by 0.25%.
Taking the OCR to 5.25%, the mid-August move by the Reserve Bank was the first rate cut in more than four years.
Agents across the country are reporting waves of buyer interest. According to data from the property portal OneRoof, buyer enquiries in August increased 49% compared with 12 months ago.
Mortgage rates are expected to drop below 6% by the end of the year, and many buyers want to act quickly before prices rise.
Confidence is most resurgent in regions such as Marlborough, Nelson, and the Bay of Plenty, with inquiries increasing by 64%, 36%, and 25% respectively.
Tauranga has seen an impressive 107% rise in buyer interest, according to OneRoof.
There’s also good news for those considering holiday properties and beach homes.
Waiheke Island and Thames Coromandel, both popular holiday destinations, have experienced dramatic spikes in buyer interest, up by 123% and 113%, respectively.
Despite broader market fluctuations, lifestyle properties remain in demand.
If you’re considering purchasing a holiday home, it may be wise to act sooner rather than later.
On the pricing front, there are signs that the New Zealand property market may have bottomed out. The average property value fell by -1.7% to $956,000 in the three months to the end of August. However, the decline is slowing.
Our biggest market, Auckland, is a significant drag on this median price, where the average property value has dropped $50,000 over the last six months.
For first-home buyer especially, it could be the optimum time to buy in Auckland as these prices levels are unlikely to remain low for long now that mortgage costs are beginning to fall.
Auckland is not the only region to see declines. Wellington, Northland, and Hawke’s Bay have seen values drop 3% or more in recent months. Again, making your move now could be your best strategy.
Overall, the recent rate cut is the beginning of a rebalancing of the NZ market. With record number of homes for sale, momentum resets with the buyers. However, this won’t last forever. Whether you’re looking for a holiday home, a primary residence, or an investment property, the current market represents as window of opportunity.