If you’re considering whether to enter the property market to upgrade or purchase your first home, it’s a valuable exercise to study the key market factors that could be working in your favour.
Across NZ, listings are hitting record numbers while the cost of cash – the Official Cash Rate (OCR) – has dropped to 4.25% from its 5.25% high in July.
The aggressive rate-cutting by the Reserve Bank of New Zealand has put many desirable properties back within reach of aspiring buyers.
As an experienced real estate agency, we believe we’re seeing the market at a turning point.
The frustration that many upgraders and first homebuyers have experienced in the past two years is starting to dissipate.
We’re already seeing transaction activity increase.
Industry figures suggest deals in November were 9% higher than in the corresponding period in 2023.
Whether you’re looking at national or local data, it’s clear sales activity and seller optimism is on the rise.
Better still for buyers, the number of homes available has surpassed recent levels. According to industry researcher CoreLogic, there were more than 30,000 homes on the market as we closed out 2024. That’s 25% higher than the five-year average.
This supply saw average property prices edge down just 0.4% in November.
Since February, when there was a mini bounce-back, values have actually dropped 5%.
We don’t believe these favourable buyer dynamics will last forever.
Cheaper loans potentially encourage buyer exuberance. CoreLogic predicts values will rise 5% this year.
And while it says this is a “muted” recovery, that’s a lot of money if you’re buying a high-six-figure property or negotiating a million-dollar-plus deal.
For upgraders, the upside is significant.
While you might not achieve your original price expectation for your existing home, your next and bigger purchase should more than make up the difference.
For investors whose portfolio covers multiple urban centres, the picture is a little complex. However, many are making their move and now represent 23% of all buyers.
Cities like Wellington, Auckland, and Hamilton are struggling to find momentum, and therefore present good buying right now.
One reason for their flat performance is the high number of properties on the market now. For example, there’s a 10% increase in the number of homes being sold in Auckland compared with this time last year.
Christchurch and Dunedin are leading the price recovery and their values may accelerate in the coming months.
If you’re in the market to sell your existing home for something larger, this is a great time to make your move.