NZ's residential property market shifts toward buyers

The latest NZHL Report by Tony Alexander showed active first-home buyers, less investor interest, and a buyer-favouring market with stable pricing trends.

Auction and open home attendance varies

While auction attendance has seen a downturn, open home participation is on the rise, reflecting a nuanced buyer interest in the current housing landscape.

Specifically, only a net 10% of real estate agents have observed an increase in auction attendees – a stark contrast to the 27% reported in late November, marking the weakest performance since July.

In contrast, open home visits have surged, with a net 45% of agents witnessing increased attendance, up from 28% two months prior.

Changing price perceptions

The NZHL survey highlighted a pivotal change in price trends for the first time since late September, with more agents reporting falling rather than rising prices in their operational areas.

This shift to a net 5% negative view on pricing moves away from extreme lows seen in May at -55%, suggesting a stabilisation of property prices in recent months.

First-home buyers and investors show divergent trends

First-home buyers remain a dynamic force in the market, with a slight decrease from 57% to 48% of agents noting increased activity.

Conversely, investor activity continues to weaken, with only a net 12% of agents seeing more investors, a sharp decline from 36% two months earlier.

This trend is influenced by several factors, including tax changes and rising operational costs, which dampen investor enthusiasm for property ventures, NZHL reported.

Offshore enquiries and property appraisals

The NZHL survey also shed light on offshore interest, with more agents reporting a decrease in inquiries from abroad, aligning with a trend that began in early 2021.

Meanwhile, property appraisal requests are on the rise, with a net 65% of agents reporting more inquiries, suggesting a growing interest among homeowners in potentially selling their properties.

Buyer concerns: Finance and employment

Top concerns for buyers include securing finance and maintaining employment.

Concerns about financing have slightly eased since a peak at the end of 2021 but remain high at 48%.

Employment worries have escalated since early 2024, underscoring economic uncertainties affecting potential buyers.

Additionally, while interest rate concerns have diminished following policy adjustments, they still linger for a small percentage of the market.

Investor market dynamics

Investors seem slightly more motivated to enter the market compared to previous months, with a net 23% of agents observing more properties being listed for sale by investors, up slightly from previous figures.

However, the drive to find bargains is becoming less compelling as expectations for price rises wane, indicating a cautious investor stance towards the housing market, the NZHL survey found.

The NZHL Property Report underscored a buyer-friendly shift in New Zealand’s residential property market, driven by varied attendance at auctions and open homes, changing price perceptions, and the evolving motivations of buyers and investors amidst economic uncertainties.

Download the NZHL Property Report here.