With interest rates in full retreat, Kiwi confidence in the property market grows stronger with every month that passes.
The number of successful sales has increased 3.4% on last year’s numbers, and the average value rose 0.4% in the three months to March.
The average property in New Zealand is now worth $970,000.
Our property prices have been climbing for five months, and they’re likely to be further powered by the decision of the Bank of New Zealand to cut interest rates from 3.75% to 3.5%.
Our Official Cash Rate (OCR) has dropped from a high of 5.5% last July and been cut five times since last August.
The only caution in the wind is economic.
While economic performance generally has been improving, there’s now elevated caution because of American tariffs and its emerging trade war with China.
Some 13% of our exports go to the US and 27% are destined for China. So, it’s unlikely our economy will escape unscathed if the world’s biggest economies go toe-to-toe.
However, we’re yet to see whether the US holds its line on tariffs to the extent it might hurt our economy.
Consequently, optimistic homebuyers have been plundering an abundance of properties for sale. At more than 40,000, the number of homes on the market is near historic levels.
The significant stock levels have also persuaded sellers that they’re not going to get the boom prices that were demanded during the pandemic.
In our bellwether market of Auckland, prices are up 1% and the average value is still $1.4 million, according to the latest OneRoof-Valocity housing report.
One of the biggest jumps in value was recorded in Dunedin, up 1.2% to an average price of $680,000.
Gisborne (+1.8%) and Otago (+1.4%) were two other big gainers.
Otago’s home values are now at a record level of $1.005 million. It has become NZ’s fifth region to average more than $1 million per property. That has been thanks to significant deals in the prestigious area of Queenstown-Lakes, which now has an average deal price of $2.07m.