Sales rise, but buyers cautious
With spring on the horizon, New Zealand’s property market shows steady growth, though buyers maintain control.
CoreLogic’s September Housing Chart Pack revealed that property sales in August increased by 1.6% compared to the same time last year. This marks the 15th rise since April 2023, despite a dip in June.
However, sales volumes remain 15% below the 10-year average for August.
Listings on the rise
While sales volumes are climbing, total property listings have surged by 13% compared to last year, reaching the highest September levels in six years.
CoreLogic NZ chief property economist Kelvin Davidson (pictured above) attributed the higher number of listings to cautious buyers.
“Lower mortgage rates are boosting sentiment, but reduced job security is dampening buyers’ confidence,” Davidson said.
Buyer’s market in key regions
Davidson noted that buyers, especially first-time homeowners, now have the advantage in regions like Wellington, Auckland, Bay of Plenty, and Otago, where stock levels have risen by 20-25%.
“Those confident in their job security can take their time to secure a deal,” he said.
Affordability remains a challenge
Despite the potential for further cuts to mortgage rates, Davidson cautioned that affordability remains stretched.
While the Reserve Bank’s likely OCR cuts could improve conditions, Davidson warned that the benefits might take time to materialise.
“As mortgage rates fall, more buyers will enter the market, but high listings and cautious sentiment mean a price surge is unlikely,” he said.
Outlook for the property market
Although a cash rate cut in October seems certain, Davidson expects a slow recovery.
“A fresh property boom is unlikely with stretched affordability, abundant listings, and a weakening labour market,” the CoreLogic economist said.
In the meantime, buyers are likely to continue benefiting from favourable market conditions.
Access the monthly CoreLogic Housing Chart Pack.
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