Photo: RNZ
New Zealand's property market is readying for a rebound, data firm CoreLogic says.
Its latest statistics showed national values dropped 0.1 percent in January, the fifth month of very little movement.
After a cumulative decline of 4.1 percent between March and August 2024, there had only been a fall of 0.4 percent since, which economist Kelvin Davidson said was a sign that a rebound could be looming.
The national median property value was now $803,819, 17.5 percent lower than the Covid peak but 16.3 percent above the pre-Covid level, he said.
"Since the 'mini downturn' seen through the middle part of last year petered out in August, national property values have been in a holding pattern - not moving clearly in either direction.
"But with mortgage rates having dropped significantly from their peaks, property sales volumes have continued to rise in recent months and may well start to reduce the available stock of listings on the market in the near term.
"That would create more competitive pressure amongst buyers, and it wouldn't be a surprise to see property values start to rise again shortly."
Wellington's prices were down the furthest from their peak, having fallen 25.1 percent. Auckland's were down 22.1 percent.
"There are still parts of the country that are doing a bit better and some doing worse," Davidson said.
Job losses and uncertainty were likely to be weighing on Wellington, he said.
"In the rest of the country, there's evidence that the bottom of the market has been reached. The question is what happens next."
Lower mortgage rates would boost the market, he said, but listings were "abundant" and the job market was still soft.
Slower population growth from immigration would also dampen demand.
"Even so, the tax rules have become more favourable for mortgaged investors again, and of course lower interest rates are shrinking the top-ups from other income that are typically required to sustain rental property cashflows.
"Some extra demand from investors this year is firmly on the cards, although the debt to income ratio rules will be something this group may have to weigh up too."
It was likely that the recovery would be slower than had been experienced after past downturns, Davidson said.
"Even in an upturn, not everything moves at the same pace, there can be regional discrepancies.
"House prices nationally might go up 5 percent but it wouldn't be surprising if Wellington underperformed and in provincial areas, where affordability is better and the rural economy is doing well, they could be up 10 percent."
He said conditions were likely to remain favourable for first-home buyers, who have been active in the market for a while.
"Lower mortgage rates will help, and low-deposit lending allowances at banks. First-home buyers will see opportunities - there are plenty of listings out there."
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