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Market Update – October 2024



Optimism Grows: How the Latest OCR Change is impacting Buyers and Sellers


The recent OCR announcement, with a 50 basis point adjustment to 4.75%, has sparked a noticeable surge in market activity. We’ve seen a significant increase in calls and inquiries, signalling that many are viewing this change as a potential opportunity, fostering a wave of optimism among both investors and buyers.


As the OCR impacts borrowing costs, individuals and businesses are reassessing their financial plans, from exploring refinancing options to considering new investments. While the immediate response is encouraging, it will be crucial to monitor how the market evolves in the coming weeks.


With falling interest rates and stable prices, this moment may offer a unique opportunity. History has shown that when rates decline, property prices tend to rise – making now a potentially ideal time to act.


Trevor & Tracey East – Directors of East Realty




BOP Market Sentiment


The median price for Bay of Plenty decreased 1.3% year-on-year to $790,000.


“Owner-occupiers and first home buyers were the most active buyer groups, with early enquiry from investors and retirees in Tauranga.


Most vendor expectations were realistic and willing to meet market expectations. Others were still a bit optimistic and hoped for higher prices. Attendance at open homes improved, as those attending were well-researched buyers ready to transact as interest rates declined and the weather improved.


Auction activity varied across the region. Most auctions saw increased attendance and buyers more willing to make an offer. Post-auction activity was strong, too.


Market sentiment was influenced by factors such as buyers assuming they would lose out to other buyers, vendors shifting to false market impressions, declining interest rates, and increased buyer activity.” Jen Baird-REINZ CEO


Bay Of Plenty’s September median sale price has increased by 1.3%, along with a decrease of -6.5% in the number of sales compared to the previous month, August 2024.




Tauranga Rental Market Sentiment


The rental market in Tauranga is currently experiencing a shift, with fewer tenants actively searching and a surplus of available properties. This shift has led to landlords needing to adjust their rent expectations, reducing rates from previously higher figures. Affordability is the primary factor behind the decline in tenant demand, as many tenants prefer to stay in their current homes rather than risk moving and facing higher rents.


In response, some landlords are offering rent reductions to retain good tenants who are considering moving due to affordability issues. By making these adjustments, landlords are aiming to maintain occupancy and avoid prolonged vacancies in an increasingly competitive market, says Karen Cooper – East Realty Senior Property Manager


In September, Bay Of Plenty had 574 new listings come to the market, which is an increase of 39% compared to September 2023, with an average of 31 days to rent, an increase of 40% compared to September 2023. The average rental price in Bay Of Plenty in September was $680 per week, down -4% compared to September 2023.


The top 5 locations for renters watchlisting properties on Trade Me in this market are:


  • Tauranga – 35%

  • Rotorua – 13.3%

  • Mount Maunganui – 5.9%

  • Hamilton – 4.1%

  • Papamoa – 3.8%



Loan Market X CoreLogic Report

There are plenty of listings available on the market, so the relatively low levels of sales are more about buyers – those who still feel confident about their jobs and can get the finance are in a position to take their time and secure a deal in their favour.


That said, as mortgage rates drop, the pool of willing and able buyers will start to grow again, and slowly erode that high level of listings – resulting in more competition and some upward price pressure. This might not happen overnight, however, given that interest rates are still relatively high, and existing mortgage borrowers on pre-agreed fixed rates won’t see the benefits of any cuts straightaway either.


Turning to property values, the CoreLogic Home Value Index (HVI) fell by a further 0.5% in August, the sixth decline in a row, taking the drop from February’s ‘mini peak’ to 3.7%. Auckland fell again in August, and is now down by 6.0% from the peak. By contrast, however, an area such as Christchurch has proved to be more resilient.


Of course, weaker property values will tend to benefit some groups over others, and first home buyers (FHBs) certainly remain a strong presence, accounting for 27% of property purchases in August. Access to KiwiSaver for at least part of the deposit and making strong use of the low deposit lending allowances at the banks are also supports for FHBs at present. Mortgaged multiple property owners remain quieter than normal, but there are now tentative hints that some are starting to return.


The economic activity data has remained pretty sluggish in recent weeks and inflation pressures continue to ease. As such, another official cash rate cut seems all-but certain on 9th October, helping mortgage rates to fall further too. But although property values may not fall much further, a fresh boom seems unlikely when affordability remains stretched, listings abundant, and the labour market weakening.


This month, the focus is naturally on interest rates, given the fall in the official cash rate last month, as well as property prices and residential construction. This comprehensive resource offers you the latest insights and trends in the New Zealand housing market—perfect for keeping you ahead of the curve.


Click HERE to download the latest Loan Market X CoreLogic Property Market Report.


To Speak to a trusted finance professional – get in touch with Deryn Coldstream.



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