House prices are slowly rising but the national price index is still behind on the same time last year. Across all regions in New Zealand, new property listings are up to levels not seen since 2015. And Government policy changes impacting landlords, including the reinstatement of tax deductibility and changes to tenancy laws, could spur the market. As always, staying informed, adapting strategies, and getting professional mortgage advice are essential for navigating New Zealand’s dynamic property market.
Stable House Prices
Across New Zealand, House prices have remained relatively stable in the first quarter of 2024, with a 2.2 per cent rise in the national average home value, according to QV House Price Index for March 2024.
QV operations manager James Wilson said he expects little change over the winter months, given high interest rates and stretched household budgets. “‘Flat’ remains the word of the year so far when it comes to the current state of New Zealand’s residential property market,” he said.
“We’re seeing only modest movement across the nation – mostly up, but some down – which is a fair reflection of a housing market that is continuing to find its footing again amidst some pretty strong economic headwinds.
Stable house prices offer first home buyers a more predictable and consistent market, making it easier to budget and plan for home ownership without the fear of escalating prices pushing their dream home out of reach. And with house prices still relatively low, there are opportunities for more affordable entry into the housing market.
More Listings for Sale
Latest figures from realestate.co.nz show new listings were up year-on-year by 23.9 per cent in March in all regions except Nelson & Bays and the West Coast, back to levels not seen since 2015.
Relative price stability and higher listings are a good indication of market resilience, said Sarah Wood, CEO of realestate.co.nz. And the increase in listings in the first quarter has helped to take the heat out of price increases.
A glut in listings presents a favourable environment for prospective home buyers, offering greater choice and less pressure to rush into buying a home. For homeowners looking to sell, more listings and more competition means pricing realistically to attract buyers and sell successfully.
Government Policy Changes for Landlords
Policy changes designed to encourage landlords back to the rental property market came into effect this month.
From 1 April 2024, landlords are able to write off 80 per cent of their mortgage interest, and that will rise to 100 percent from April 2025. The deduction scheme was removed by the previous government, and is being reinstated as part of the coalition agreement between National and Act.
While this policy change is unlikely to decrease rent prices, it could slow their growth. Property Investors Federation president Sue Harrison said it would be about two years until the benefits of interest deductibility began to trickle down - and whether rent increased, depended on interest rates.
Other changes include an update to the Residential Tenancies Act which could improve outcomes for landlords and make property investment more desirable, potentially leading to an increased supply of rental properties and applying downward pressure to rents.
Navigate NZ’s Property Market With Ease
Are you ready to navigate New Zealand’s ever-evolving property market landscape? Whether you're an existing homeowner, a first home buyer, or property investor, it's vital you stay informed and prepared.
Contact a Mortgage Express branded mortgage adviser today to discuss how the latest property market trends could impact your home ownership journey and get tailored solutions to achieve your goals in the current market environment.
