During the past two years, the New Zealand property market has experienced a slowdown due to rising interest rates, stricter lending rules, and a general reduction in economic confidence in New Zealand.
In the lead-up to the 2023 election, both the National and Act parties proposed policy reforms around tax and housing, such as reducing the Brightline test, changes to interest deductibility for rental properties, and alterations to the 90-day notice period for tenants. With the National-led coalition government now in power, these pledged reforms are being translated into actionable policies for the coming years.
In this blog, we focus on some of these recent policy changes related to the housing market.
An Increase in Listings
There has been a notable increase in property listings across the country. REINZ Chief Executive Jen Baird says with the combination of high listing numbers, elevated stock and shifts in the median sale price we are seeing increased activity. All regions, except for the West Coast saw an increase in activity in February 2024. In the majority of regions, the sales count year-on-year has increased by more than 20%. New Zealand’s inventory levels have increased by 8.1% from 29,083 to 31,424 properties year on year.
The uptick in property listings presents unique challenges and opportunities for both buyers and sellers within New Zealand’s real estate market. For buyers, the increased inventory signals a diverse range of housing options, potentially easing the competitive pressures and offering more leverage in negotiations. Having a wider selection of houses to choose from empowers buyers to be more selective, prioritising their needs and preferences in their search for the perfect home.
Conversely, sellers are now tasked with distinguishing their property in a more saturated market. This necessitates an innovative marketing approach to attract attention and secure a favourable sale. Engaging with a real estate specialist becomes crucial in this environment, as they can offer tailored advice and strategies to effectively respond to the evolving market conditions.
House Prices are on the Move
Alongside the increase in sales, the REINZ data shows property prices have increased in New Zealand overall. The median sale price nationwide has risen by 3.1% year-on-year, climbing from $766,000 to $790,000. Excluding Auckland, New Zealand saw a year-on-year increase of 2.6%, up from $692,000 to $710,000.
Looking specifically at our region, the Bay of Plenty, the data from REINZ shows the Bay of Plenty’s median price was $820,000, a rise compared to last month’s $785,000 price. The number of house sales in the region also improved, in February there were 367 sales, compared to January’s 223 sold.
In the case of rising prices, both buyers and sellers must adapt their strategies to remain agile. Buyers should prepare for rapid decision-making as attractive listings might not stay on the market for long. This preparation includes having financing arrangements in place and understanding their must-have features versus nice-to-haves, enabling them to make swift, informed decisions. Sellers, on the other hand, should focus on realistic pricing that reflects the current market conditions. Overpriced homes may languish, missing the peak interest periods immediately following listing. It’s advantageous for sellers to work closely with real estate specialists who can conduct a comparative market analysis to set competitive prices and suggest home improvements that could increase property appeal and value.
Summary
For both buyers and sellers, maintaining a keen eye on current market trends and economic indicators is essential. Engaging with experienced real estate specialists, who offer invaluable insights into when to make a move or adjust a listing price, can make a significant difference. At East Realty, our experienced team ensures that our clients are well-prepared to navigate the complexities of the New Zealand real estate market, making informed decisions that are tailored to their unique circumstances.
