The average price of a home in New Zealand is on the rise, and the latest 0.5% cut in the Official Cash Rate (OCR) is likely to add to the momentum of the real estate recovery.
Even before the Reserve Bank of New Zealand got out its knife to reduce rates for the fourth time since last August, average property values had increased 1.1% to $969,000.
The latest figures from the OneRoof-Valocity House Value Index also report that buyer activity is increasing because rates have fallen from 5.5% to 3.75%.
Auckland, the bellwether market, led the positive trend with its average property price jumping 2% in the past three months to $1.307 million, a gain of $26,000.
There is good news for first-home buyers and those in more affordable regions, too. Prices in the country’s cheapest region, West Coast, rose 2.2% to $486,000 (up $11,000).
Further boosting the market, listings are up. Auckland saw a significant increase in listings, up 17%. However, it was outstripped by Canterbury (up 20%) and Wellington (up 18%).
As an experienced agency, we saw a similar surge in listings in the autumn, following a strong sales trend in January and February. However, the market dynamics are more optimistic this year, especially with interest rates at 3.75%, compared to 5.25% some 12 months ago.
This, along with continuing pent-up demand, is generating a new wave of buyers that we didn’t see in 2024.
Despite the economic challenges facing New Zealand, our agents are receiving an increasing number of enquiries from potential upgraders, downsizers, first-home buyers and investors.
This trend is further underlined by the increasing number of valuation requests we’re receiving from homeowners considering upsizing or downsizing.
Here are seven tips for buyers trying to navigate the current market as it continues its recovery:
Research Carefully: Don’t just look at national averages. Property markets are local. Research specific suburbs you’re interested in. Are prices rising? How quickly are properties selling?
Talk to Agents: Get the inside scoop from local real estate agents. Ask about recent sales, buyer activity and their outlook for the area. We’d be delighted to help you.
Budget: Create a detailed budget that includes all housing costs, not just the mortgage. Can you comfortably afford the repayments even if rates go up in the next few years, or your income decreases?
Consider a Fixed Rate: Locking in a fixed rate for a period (e.g., 2-5 years) provides certainty in your repayments and protects you from potential rate rises in the short term.
Be Prepared to Negotiate: With more listings, you have more power. Don’t be afraid to negotiate.
Job Security: Given the current economic climate, carefully assess your employment situation before committing to a significant purchase.
Don’t Rush: Be patient, do your due diligence and make a decision that’s right for you, regardless of what the market might do in the short term.