Following a period of moderate decline, figures released by CoreLogic indicate a stabilisation in property prices. The market has shown minimal movement with only a 0.4 per cent decline since March and August 2024. The market experienced a drop of 4/1 per cent between these dates.
CoreLogic economist Kelvin Davidson suggests this might be the beginning of an upward trend. The national median property value is now $803,819, 17.5 per cent below its Covid-era peak. The figure is also 16.3 per cent higher than pre-pandemic levels.
Property values have remained relatively steady since the slight downturn in mid-2024. However, mortgage rates have eased from previous highs and more properties are being sold. This increasing demand could begin to shrink availability, potentially creating a more competitive market where property values start rising again.
While national figures suggest a stabilisation, regional trends are more varied. For example, Wellington has seen a substantial price drop to 25.1 per cent from their peak and Auckland has seen a fall of 22.1 per cent. Falling house prices in Wellington are thought to be down to job losses and economic uncertainty.
Lower mortgage rates are expected to support the recovery but abundant vacancies and a soft job market could limit a rebound. Slower immigration rates may also decrease demand, preventing a sharp upturn in property values.
Despite these challenges, changes to tax policies have become more favourable for property investors. This is especially the case for people with existing mortgages. With interest rates falling, rental property cashflows are becoming more manageable, making property investment more appealing. However, Davidson notes that upcoming debt-to-income ratio regulations could deter some investors.
The pace of the property market’s recovery is likely to be slower than in previous cycles. Not all regions will experience growth at the same rate, with some areas potentially outperforming others. While a nationwide price increase of around 5 per cent is possible, Wellington may continue to lag. Meanwhile, regions with stronger economies could see increases of up to 10 per cent.
Favourable conditions continue for first-home buyers who have already been active in the market. For example, lower mortgage rates and low-deposit lending requirements from banks will provide a window of opportunity for many. With availability still high, aspiring homeowners may find attractive deals before the market gains momentum again.
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