Premium brands always do well in market downturns – and that’s true for the “dress circle” properties in the Queenstown area.
The value growth down south has been stellar while other areas of New Zealand – most noticeably Auckland and Wellington – continue to feel the impact of high mortgage costs.
The announcement of a 0.5% cut in the Official Cash Rate (OCR) will likely turn the tide for both cities in the next few months.
Kiwi buyers said they wanted to see the colour of the Reserve Bank’s money before re-evaluating their cautious approach to buying property – and now they have their wish.
Our interest rate has now been trimmed by a full 1% to 4.75%. Historically that is sufficient to get the market moving again.
So, now is a great time to enter the market because momentum will start to swing back to value growth.
For September, the national median value dropped 1.1% to $957,000, according to the latest OneRoof-Valocity Housing Index. It stood at $968,000 in June.
On an annual basis, property values are stuck, down just 0.1%.
The out-performers were Dunedin and Queenstown-Lakes, the latter seeing its quarterly value rise another 1.5% to $2.05m. Arrowtown is also buoyant. Its dining precinct of Ayrburn recorded a 5.7% jump in values—$688,000 higher than five years ago.
Nearby Lake Hayes is 4.7% higher (+$125,000) and enjoys an average price of $2.791m.
These are relatively small markets. Bellwether areas are having a different experience.
Auckland suffered a quarterly drop of $22,000 (-1.1%). It’s down 2.4% ($32,000) year-on-year. Wellington is at a one-year low with a median price of $950,000, down 2.8% ($28,000) in the 12 weeks to the end of September.
Despite this, Kiwis can see a light at the end of the tunnel.
OneRoof released a survey of its readers, and the results signal a change in mood is coming:
- 40% predict economic improvement.
- 41% say property affordability will improve.
- 54% believe lower rates will have a beneficial personal impact.
- 21% say lower rates will encourage them to enter the market.
We share the positive market response to the latest interest rate cut and believe we’re on the edge of a rebound.
Prices are beginning to stabilise and we’ll see growth in 2025 and beyond.
The biggest impact will be on the buy side. Cheaper and larger loans will quickly increase competition for property.
If you’re planning to purchase – either as an upgrader, investor, or first-time buyer – making your move now will beat the pressure of increased competition and higher prices down the track.
For upgraders, it’s a smart move to begin preparing your homes for sale and talking to a trusted agent. We’d be delighted to help you.
While national value averages are informative, it’s important to understand the price trends and buyer demands in your area. A great agent will help you with that information.