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Market Update – November 2024



Bay of Plenty Property Market: Strengthening Demand and Optimism for 2025


The median price for the Bay of Plenty increased by 0.6% to $830,000


“Owner-occupiers and first-home buyers were the most active buyer groups, with growing interest from investors as there was further market confidence since the declines in interest rates. Local agents report no declines in buyer pools; in October, they only increased.


Most vendors had realistic expectations regarding asking prices, and as they received genuine informed feedback, they saw the reality of where their property sits on the market. Attendance at open homes was fairly good, especially for new listings, but it still tended to drop after the first couple of weeks.


Auction room attendance levels increased weekly with active bidders, although properties sold well under the hammer if the price expectation was realistic.


Factors like lower stock levels, a decline in interest rates, and further confidence in both buyers and sellers influenced the slight market sentiment shift. However, finance was still challenging to obtain.


Local agents cautiously predict that 2025 will be a good year, with greater turnover, further drops in interest rates and perhaps steady gains in prices and sales, too.” Jen Baird REINZ CEO


In October 2024, the property market saw a slight increase in activity and pricing compared to last year and the previous month. The median days to sell increased to 47, which is higher than the 10-year October average of 40 days. Inventory remained steady at 24 weeks, matching October 2023 levels. Year-over-year, the median price rose by 0.6%, and the sales count surged by 26.8%, though the days to sell increased by 6 days.


Compared to September 2024, the median price went up by 5.1%, the sales count increased by 5.8%, and the days to sell decreased by 3 days.


Read the full report HERE


 

Message from Our Directors


The property market is showing continued strength, with increased buyer interest and multiple offer scenarios becoming more common. Driving around the city, it’s encouraging to see sold signs appearing more frequently—a sign of a vibrant market. At East Realty, we offer unique advantages when you list your property with us. One of the standout benefits is our commitment to collaboration: every real estate company in town has the opportunity to introduce potential buyers to your property, ensuring maximum exposure.


Our approach includes comprehensive digital and offline marketing strategies. We’ll feature your property on all major real estate websites to reach a broad audience of prospective buyers. This wide-reaching approach means that your property receives unparalleled visibility, increasing the likelihood of connecting with the right buyer quickly and at the best possible price.


At East Realty, we’re dedicated to maximising your property’s market presence and achieving the results you deserve.


Trevor & Tracey East – Directors of East Realty



Tauranga Rental market Sentiment


INCREASED LISTINGS OFFER TENANTS MORE OPTIONS AMID STRONG DEMAND


In October 2024, Tauranga’s rental market in the Bay of Plenty experienced a significant 51% rise in available listings compared to October 2023, creating more choice for prospective tenants. The current rental price index has reached $675 per week, a 4% increase year-over-year. However, the median time to rent a property has grown to 19 days, up 27% from last year, reflecting a more balanced market where tenants can take their time selecting properties.


Despite the increased supply, Tauranga’s rental market remains competitive, fuelled by demand from new residents and seasonal workers. Rental prices are holding firm, though they remain high compared to national averages. Landlords are increasingly flexible on lease terms, particularly for long-term tenancies, as they respond to a stabilising economy and mortgage rates. While the supply of rentals is on the rise, driven in part by homeowners shifting towards rental income, availability is still tight for well-maintained, centrally located properties. Prospective renters should expect some choice but be prepared for competitive conditions, especially in desirable areas.


Check out TradeMe’s Rental Insights for October HERE




CoreLogic X Loan Market Report

In September, property sales activity rose by 8% compared to the same month last year, marking the 16th increase in 17 months, but volumes remain 10-15% below typical seasonal levels. Ample listings allow buyers with secure jobs and financing to negotiate favourable deals. Property values continue to decline, with the CoreLogic Home Value Index dropping another 0.5% in September, marking a nearly 5% fall since February’s peak. Auckland and Wellington have seen notable declines, while Christchurch and Dunedin remain steadier.


First-home buyers (FHBs) are active, making up 26% of purchases in September, supported by access to KiwiSaver and low-deposit lending options. Mortgaged multiple property owners (MPOs) remain quiet, though some are cautiously returning due to lower mortgage rates and changes in interest deductibility and deposit requirements. Investors are expected to be a significant group to watch in 2025, with the potential for growth if mortgage rates stabilize around 5.5%.


Economic activity is generally subdued, and inflation is now within the 1-3% target range, suggesting possible future OCR and mortgage rate cuts. While falling mortgage rates may stabilise property values, a new boom appears unlikely due to affordability issues, abundant listings, a softening labour market, and upcoming debt-to-income (DTI) limits.


NATIONAL RENTAL RATES & YIELDS


Rental growth has now clearly settled into a more subdued phase and was only 1.2% in the year to September on the Stats NZ flow/new tenancy measure. That’s comfortably below the long-term average of 3.2%. Rents are already high in relation to household incomes, so a slowdown was always likely at some stage. But subdued rental demand [from slowing net migration] and more available listings on the market are also adding to the slowdown too.


Over the past 2-3 years, gross rental yields have been trending slowly higher, as values have weakened and rents have risen. From a floor of 2.8% in late 2021, they now stand at 3.9%, which is the highest level since early 2016. Auckland and Wellington City are hovering in the 3 3.5% range, with Hamilton and Tauranga closer to 4%, and Christchurch and Dunedin a bit above 4%. Even though rental yields have trended higher, they’re still quite low compared to mortgage rates, so no doubt some would-be property investors are watching and waiting for interest rates to start falling to a more favourable level. Download the latest CoreLogic X Loan Market report HERE or watch the video below.


To speak to a finance professional, get in touch with Deryn Coldstream HERE




New Zealand's Property Market


REINZ REPORTS GROWING STABILITY AND CONFIDENCE IN NZ’S REAL ESTATE MARKET


Spring has officially arrived and has brought a wave of positivity and optimism to New Zealand’s property market, the latest figures from the Real Estate Institute of New Zealand (REINZ) reveal.


As we recover from a subdued market, October proved to be a more positive month, with increases in sales and ever so slight increases in median prices.


“There seems to be light at the end of the tunnel. Although challenges like the cost of living remain, positive signs are emerging. Falling interest rates, increased inventory in the market, and greater activity during open home events are all reflected in the data for October, ” explains REINZ CEO Jen Baird.


PLANNING TO BUILD A NEW HOME?


New government proposals could make it easier and more affordable. The Government is exploring significant reforms to the building consent system, aiming to improve efficiency and consistency across New Zealand.


Find out more about the proposal HERE



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