Optimism for a big rebound in New Zealand property prices have increased with a third successive cut in interest rates.
Our Official Cash Rate (OCR) has dropped a further 0.5% to 4.25% – the third successive reduction by the Reserve Bank of New Zealand.
While it’s too soon to see evidence of the latest cut, the first two decisions have made an impact.
Anecdotal evidence from real estate agents suggests the increasingly favourable interest rate environment has sparked more inquiries and higher attendances at open houses and auctions.
New Zealand’s top property site, OneRoof, says inquiries generated on its own site have risen by 20% in the past few weeks.
You can add to this evidence the survey findings of the Real Estate Institute of New Zealand (REINZ) that found values have turned the corner, moving up 1% across the country in the quarter to October.
The average price of a home in New Zealand is now $957,000, according to the latest OneRoof-Valocity Price Report.
The report’s authors even suggested the NZ market has finally found its floor.
Looking at sales results over the three months to October, it found prices had dipped 0.7% compared to a loss of -1.1% in the previous quarter.
Better times appear to be ahead for property owners, but much will depend on our economic recovery, of course.
Positive sentiment hinges on our confidence in the economy and our own job security.
The other influencing factors, of course, are the interest rate, affordability, price trends and the supply of homes coming onto the market.
The OneRoof-Valocity House Value Index indicates that a recovery is on the way.
It has found that six regions recorded quarterly value growth in the last quarter, including Canterbury, our second largest market for sales.
The average price in Canterbury edged higher to $782,000.
While REINZ’s survey found growth returning to Auckland, the Valocity index returned a different result. Values dipped 0.8% ($10,000) but average prices are still an eye-watering $1.279 million.
Average values grew in a third of the metro suburbs covered by the index, up from 25% in the previous quarterly report.
It is only a matter of time before upgraders will recognise the favourable balance between selling and buying their next property.
You don’t want to get caught in that tsunami.
Instead, you should talk to your trusted real estate agent today about the optimum time to beat the rush and find the best path forward for your property ambitions.