The New Zealand property market is showing signs of a resurgence with a return to positive price trends and a greater volume of homes coming onto the market.
Three key factors powering predictions for 2024 include speed of the market downturn, immigration numbers and the possibility that interest rates have peaked.
The bottom of the property downturn was hit faster than most predicted and many forecasters had expected values to fall further.
Considering interest rates, the Official Cash Rate (OCR) has been at 5.5% since August, ending a 20-month drive of hikes to quell inflation. Most believe the OCR will continue to ease across 2024.
Meanwhile, immigration will likely see an extra 90,000 people living in New Zealand by the end of the year.
This surprise factor has seen many banks upgrade their property price predictions for 2024 and many industry leaders are confident about market prospects during the next 12 months.
- A Reuters poll of 11 property market analysts predicted 5% and 6% increases in 2024 and 2025.
- Westpac believes inflation will remain above 3% this year and thinks one more hike is possible. However, it’s bullish on property prices, forecasting an 8% rise.
- ANZ has reversed its views after predicting a 1.3% fall in house prices. It now expects a rise of 2-3% in 2024.
- Economists at ASB have been on a similar journey, reversing their 2.6% drop to a 7% rise. It says net migration is the driver for this change.
- Bank of New Zealand is another that predicts a 7% rise this year.
- Kiwibank is a little more cautious, forecasting a 5% rise.