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Market Update – December 2024



Shifts, Trends, and Opportunities in the BOP Property Market


A word from our Directors

As we wrap up 2024, we reflect on a year that brought its fair share of challenges but also exciting opportunities for growth and progress. While the government has indicated that we’ve entered a technical recession and the country’s finances are under pressure, we are seeing promising signs of change. The economy is showing resilience, and the property market is gaining momentum, inspiring confidence as we look to the future.


In fact, the trends we’ve observed give us every reason to believe that 2025 will be a year of transformation, opportunity, and growth. Though 2024 tested many industries, including ours, the positive shifts we’ve experienced in recent months have been remarkable. They serve as a reminder of the strength, adaptability, and optimism that drive us forward.


As we close this chapter, we want to extend our heartfelt gratitude for your unwavering support throughout the year. From the entire team at East Realty and East Rentals, and from us personally as Directors, we wish you a safe, joyful, and peaceful Christmas. May your holiday season be filled with happiness, and may the new year bring you success, new opportunities, and shared accomplishments.


Here’s to a bright and exciting 2025—we can’t wait to continue this journey with you!


Trevor & Tracey East – Directors, East Realty & East Rentals

Buyer Activity Surges as BOP Median Price Climbs to $825,000


“First home buyers, owner-occupiers and investors were the most active buyer groups across the region.


Vendors had realistic expectations regarding their asking prices, while those with unrealistic expectations saw properties selling around them and wondered why their own property wasn’t selling. This generally led to a price correction.


Attendance at open homes increased due to lower interest rates and the warmer season. Auction room attendance increased retrospectively, with many properties sold under the hammer, too.


Market sentiment was influenced by increased buyer activity, increased stock, and investors’ return to the market. However, vendors receiving early offers in their campaign were concerned they missed out on better opportunities.


Local agents describe their local market as “positive without panic.” Recent interest rate drops gave many a renewed sense of confidence. Local salespeople predict increased market activity will be in February and March 2025.” Jen Baird- REINZ CEO


BOP Market Stats

The current median Days to Sell of 47 days is more than the 10-year average for November which is 39 days. There were 24 weeks of inventory in November 2024 which is 1 week less than the same time last year.


Compared to November 2023


The Median Price is up 2.8%, the Sales Count is up 11.8% and the Days to Sell is up 3 Days.


Compared to October 2024


The Median Price is up 0.6%, the Sales Count is up 1.4% and the Days to Sell is up 1 Day.



Activity Heats Up While Prices Remain Cool


As we approach summer, market activity is on the rise. In November, the New Zealand property market experienced a wave of confidence, as evidenced by the latest figures from the Real Estate Institute of New Zealand (REINZ).


Buyers are showing increased interest, spurred by the recent reduction in the Official Cash Rate (OCR), prompting more transactions nationwide. At the same time, fewer sellers are bringing their property to market, which is reflected in the nationwide decline in property listings.


“There’s been a shift in market sentiment nationwide in November. After a challenging year, recent data indicates promising signs of increased activity, which we hope will continue into 2025. This is a good time to make transactions, as prices remain stable, and interest rates decrease.” says Jen Baird – REINZ CEO


“November saw more life in the property market. Buyers are benefiting from steady prices and increasing options, while sellers in many areas are seeing stronger interest,” adds Baird.


Overall, listings nationally increased year-on-year by 3.9% from 10,712 to 11,129, and New Zealand (excluding Auckland) increased by 7.8% from 6,901 to 7,437 compared to November 2023. Eleven out of fifteen regions reported increases in listings compared to last year. The regions with the most significant increases were Southland (+14.5%), the Bay of Plenty (+14.1%), and the West Coast (+13.6%).


For the first time this year, the number of listings in the market decreased compared to the previous month, with a nationwide decline of 3.8% compared to October 2024. Additionally, listings across New Zealand, excluding Auckland, decreased by 0.4% Month-on-month.


Inventory levels are rising, with a national increase of 21.3% year-on-year and a 5.1% increase month-on-month, totalling 33,984.


Baird notes, “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. 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”


Landlords Respond to Demand: Rental Listings Surge by 36% in BOP


The rental market in Tauranga and the wider Bay of Plenty region has shown some interesting shifts in November 2024, as indicated by the latest data from Trade Me. While there was a slight dip in rental property searches, with 301,000 searches recorded—a decrease of 8% compared to November 2023—there has been a notable increase in the supply of rental properties. A total of 619 new properties were listed for rent in November, marking a 36% rise from the previous year. This uptick in listings is significant, suggesting that landlords may be responding to an increased demand for rental accommodation.


However, despite the growing supply, rental prices are still on the rise. The average rent for a property in the Bay of Plenty is now $675 per week, which is a 4% increase compared to November 2023. This increase in rental prices could be a sign that demand is still strong, particularly in desirable areas like Tauranga. The continued upward pressure on rent might be driven by factors such as the region’s popularity with both local residents and newcomers.


Another noteworthy statistic is the rise in the average number of days properties are staying on the market, now at 18 days—a 29% increase year-on-year. This could suggest a shift towards a more competitive rental market, where landlords may be adjusting their expectations, or tenants are taking a bit longer to decide. Alternatively, it may also reflect the broader economic trends, with renters potentially being more cautious due to rising living costs.


The Year in Rentals: Falling Rents, New Arrivals, and Renewed Investor Optimism


The past 12 months have brought significant changes to the rental market, particularly in Tauranga. Rents have decreased across the board, with some areas seeing reductions of up to $100 per week. As a result, properties are sitting vacant for longer periods, and tenants now have more options to choose from. Despite the ongoing rental shortage, it’s clear that affordability has become a key factor. Many good landlords are opting for stable tenants over holding out for the highest possible rent.


Additionally, a notable number of tenants have left New Zealand due to high rental costs. However, the good news is that the Bay of Plenty is seeing an influx of people moving from overseas, many of whom are renting homes at more affordable rates.


Investor confidence is also on the rise, with more individuals returning to the market to expand their portfolios. This is a positive sign for the overall property market. Looking ahead, 2025 appears to be shaping up to be a more optimistic year for the property market across the board.


Massive GDP fall: NZ in deep recession


New Zealand’s GDP declined by 1% in the September 2024 quarter, following a 1.1% decrease in the June quarter, marking the nation’s deepest recession since the COVID-related slump in 2020. This decline was significantly worse than economists’ predictions of a 0.4% fall. The New Zealand dollar weakened further, reflecting the economy’s instability.


The decline affected 11 of 16 industries, with manufacturing, business services, and construction experiencing the largest drops. However, there were gains in rental, hiring, real estate services, and agriculture, led by dairy farming and related exports.


Despite a prolonged per capita recession over the past two years due to high population growth, economists suggest the third quarter may represent the lowest point of this economic cycle. Lower interest rates and easing credit conditions are expected to pave the way for recovery.


Effects on the NZ Housing Market


Potential Decline in Property Demand: Economic uncertainty and job losses in key industries like manufacturing and construction may dampen demand for housing, particularly in urban areas. Lower consumer confidence could lead to fewer homebuyers entering the market.


Pressure on Property Prices: The recession may put downward pressure on property prices as buyers negotiate harder and sellers adjust to slower sales.


Increased Activity in Rental Market: Growth in the rental and real estate services sectors indicates that more people may opt for renting over buying in the current economic climate.


Easing Mortgage Rates: With the Reserve Bank cutting rates and easing credit conditions, borrowing becomes cheaper. This could eventually stimulate demand in the housing market, particularly among first-home buyers.


Shift in Regional Dynamics: Gains in agriculture suggest potential resilience in rural housing markets tied to farming communities.


Investment Opportunities: Falling property prices and lower interest rates may attract investors looking for long-term gains, particularly in the rental sector.


Impact on Construction Sector: A decline in construction activity could exacerbate New Zealand’s existing housing shortage, particularly in high-demand areas.


Outlook: While the short-term impact of the recession may slow the housing market, easing monetary conditions and a gradual economic recovery could stabilise and possibly revitalise the market in the coming quarters.

Read the full article HERE from NZ Herald.


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