NZ housing market sees increased activity as buyers eye 2025 recovery
The New Zealand property market showed signs of recovery in November, with increased buyer activity and stable prices, according to the Real Estate Institute of New Zealand (REINZ).
Nationwide sales grew by 10.8% year-on-year, reflecting improving sentiment following a challenging year.
Despite this positive momentum, experts from Westpac and ASB noted that the recovery remains gradual, influenced by economic headwinds and an oversupply of housing stock.
Sales and prices: A mixed picture
REINZ data highlighted a 10.8% rise in nationwide sales compared to November 2023, driven by gains outside Auckland, where activity climbed by 12.9%. Notable surges occurred in Gisborne (+55.6%), Hawke’s Bay (+34.4%), and Wellington (+32.3%).
Median prices remained stable at $795,000, unchanged year-on-year. Southland led regional price growth, hitting a record median of $518,000 – a 17.7% annual increase.
“November marks the first month in a while that we have seen an increase in demand and a slight reduction in new property coming to market,” said REINZ CEO Jen Baird (pictured above left). “We expect the summer months to bring the usual upswing in sales activity across the market, this year with both buyers and sellers feeling a little more confident.”
However, house price performance remains uneven.
“House prices in the upper North Island were falling earlier in the year but have steadied in recent months. In contrast, Canterbury and Otago, which had been seeing gains, have now softened,” said Westpac’s Matthew Hassan (pictured above center).
Challenges remain despite improved sentiment
ASB chief economist Nick Tuffley (pictured above right) emphasised mixed signals in November’s REINZ data, with seasonally adjusted house sales dipping 2% month-on-month despite earlier upward revisions for October.
New listings fell for the first time in four months, yet inventory levels remained near eight-year highs.
“House prices experienced a modest gain, rising 0.2% month-on-month, but remain down 1.4% annually,” Tuffley said.
He added that while regions like Gisborne and Taranaki posted monthly price gains, Auckland prices rose modestly by 0.6% after October’s decline.
Looking ahead to 2025
Experts agree that the housing market is poised for gradual improvement heading into 2025. Lower mortgage rates, alongside anticipated OCR cuts, are expected to support recovery.
ASB predicts an additional 100bps of OCR cuts next year, with mortgage interest rates continuing to trend downward.
“We expect the housing market to shift from a buyers’ to a sellers’ market in 2025 as the stock overhang clears and lower interest rates lift sentiment,” Tuffley said.
Hassan echoed this sentiment, stating, “As the backlog of housing supply begins to clear, we expect to see stronger support for prices over 2025.”
While economic challenges like rising unemployment and slower wage growth remain hurdles, both Westpac and ASB point to increasing optimism in housing market surveys.
Positive buyer sentiment and expectations for lower rates suggest a stronger recovery may build momentum in the months ahead.
For now, stable prices and improving activity indicate a more balanced property market as summer approaches, with conditions set to brighten further in 2025.
To access the full REINZ report, see this LinkedIn post. You can also download the report here. Read the Westpac insights here and the ASB commentary here.
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