As the weather cools down, are the residential and lifestyle property markets warming up?

Early autumn showed signs of new shoots of growth for New Zealand’s property market, and while we’re certainly a way off experiencing any kind of peak or boom, there’s evidence of a positive upturn.

It will also be interesting to see what effect the government’s latest announcements, around the reforms of the Credit Contracts and Consumer Finance Act (CCCFA) regulations, will have on lending for home loans.

These changes are set to remove requirements around loan affordability assessments from the regulations, as well as allow lenders to decide when they need to see an applicant's recent transaction history, verify all their sources of income or check how the amount a loan applicant says they spend on food, utilities, etc stacks up against a benchmark.

There’s no question potential home buyers will likely be feeling cheered by this news, with Housing Minister Chris Bishop and Commerce Minister Andrew Bayly promising it’ll soon be easier to get a loan. And as a flow-on effect, bringing more buyers into the market will perhaps provide vendors with greater opportunities to achieve a sale.  

When it comes to recent stats, REINZ figures from March had residential listings increased substantially (up by 23.9% nationally) compared with the same time last year. Chief Executive of REINZ, Jen Baird, says that the market is clearly more active, with higher stock levels, sales counts and median sale prices.

“This reinforces a trend we have seen since the beginning of 2024 with more property coming to market, which means more available properties for sale and more choices for buyers.

“It’s also the second consecutive month recording a year-on-year increase in the median residential house sale prices nationally. This, along with the increased year-on-year levels of sales and listings, suggests that we are past the lowest point of this market cycle.”

This comes as a relief for those looking to sell following a difficult period for sales.

“To be brutally honest, it has been tough for some time,” says Peter Newbold, General Manager of PGG Wrightson Real Estate.

“But, in the last couple of weeks, we’ve just seen some more activity in the market. It’s not booming but there’s definitely more activity.”

However, Newbold has noticed a lot more due diligence was being carried out and as a result of that, vendors need to be realistic about the current status quo, or their properties may not move. And this is a sentiment echoed by those saying it’s still very much a buyer’s market.

"The listings surge has given buyers a chance to pause and gives them more bargaining power than they had six months ago, when much less stock was on the market,” explains Owen Vaughn, editor of Oneroof.

“The swing to a buyer’s market has put the brakes on value growth.”

While a number of catalysts are at play, interest rates and the official cash rate (OCR) are certainly hot topics of conversation amongst those keen to see significant changes over the next six to 12 months.

Independent economist Tony Alexander told OneRoof that until the Reserve Bank (RBNZ) recognises it has over-restricted the economy and makes a move to cut interest rates quickly, the lingering of a flat market is likely to persist.

However, Alexander is quick to point out that ‘flat’ in the context of residential real estate doesn’t mean no change in prices - but rather when looking past the month-to-month fluctuations, there is little evidence of much price gain.

“Does this mean the housing market will be weak well into 2025? Probably not. The scene is slowly being set for some quick interest rate declines – but definitely not in the next few months.”

John Bolton, founder of Squirrel Mortgages, is a little more optimistic in his predictions, noting that while the rhetoric coming out of the RBNZ right now is that it’ll be late 2025 before rates start dropping, he suspects they’ll be singing that tune right up until the moment they announce that first OCR cut.

“From my perspective, I’m still expecting rate falls to start from the middle of this year.”

So what do homeowners and borrowers need to consider when it comes to buying and selling property for the rest of 2024?

Recession or not, people continue to relocate for any number of reasons and what may be true for the general market doesn’t always correlate with what’s happening in various regions around the country - which means those looking to sell shouldn’t feel held back by the present conditions.

This is evident by figures which show the total number of properties sold increased in March - compared to February - by +7.4%, and was up 8% year-on-year. It’s also worth considering that when you sell in a buyer’s market, you soon get to reap the benefits of being a buyer yourself.

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If you want to find out more about what the current market means for selling your provincial residential home, lifestyle block or rural property, please reach out to one of our knowledgeable and experienced agents who can help you with everything you need to know. Our offices are located nationwide.