The property market remains erratic. Slowly but surely that serious overstocking level is falling. But we wonder if this may be from houses being withdrawn from the market rather than from an increase in sales alone.
Despite falling interest rates there remains a reluctance to buy. First home buyers are active – 36% of Wellington sales, 34% in Hamilton and 28% in both Auckland and Christchurch. Investors are currently strong representing 23% of recent sales. This is the highest share since 2021. However, market conditions still hold many investors back – getting bank finance, falling yields and restrictive tax rules (though these are progressively changing in favour of investors).
What appears to be missing from the market are those buyers and sellers who are trading up or trading down. They seem to be prepared to wait until the market stabilises.
There is an interesting side effect. Talking with retirement home operators they tell us that demand remains high. Offers are being made but clients are withdrawing as either they can’t sell their existing property or they can not get the price they required to make the move.
Commentators feel that activity will be influenced in 2025 by the impact of lower mortgage rates, offset in part by new debt-to-income ratios and changes to bank lending rules. The continued increase in unemployment and people concerns around job-stability will also impact the market.
All of this indicates a continuing demand for rental properties.