The latest data from the Real Estate Institute of New Zealand (REINZ) shows the national median house prices rose 3.2% year-on-year to $795,000 (as at end of February) with some areas such as Auckland, Canterbury, and Waikato having their highest February sales counts since 2021.
Otago led the country with a 13.2% increase in median house price, reaching $755,000 but in contrast, Northland continues to feel some downward pressure following recent severe weather and flooding. Prices are still lower than a year ago across much of the North Island, including falls of 3.6 percent per annum in Gisborne and 2.9 percent in Wellington. Tasman is the only South Island region currently showing an annual price fall, while Southland has the strong price growth at 7 percent.
Overall this latest data reinforces house prices are on a path of gradual recovery.
The increases that we expected to see is actually happening.
House prices might be slowly increasing, but the number of sales happening are still quite flat.
We have seen the interest rates having stabilised and there’s a general feeling among buyers and sellers that it’s probably still a good time to buy, but that window might be closing and so it’s a good idea to start looking before they rise.
First Home Buyers of Investors?
First home buyers remain some of the more active in the market and while there appears to be a bit more interest from investors there is certainly no flood of new investors. It appears that many are still nervous about the election and the risk that tax rules could change again if there is a Labour led Government.
First home buyers are benefiting from the lower home loan interest rates and the lower house prices. Of course buying your first home is never easy and the banks policies can make it harder than it needs to be, but get a good mortgage adviser to help and they can iron out a lot of those bumps.
Seasoned property investors have continued to show confidence in the market as they are able to get some well priced properties and lock in the low interest rates too. They know the market has cycles and are willing to invest while the house prices are lower than normal. There are also some new property investors looking at entering the market and seeing the market stabilise and start to increase might be just what they need to give them a bit of confidence.
World Unrest & the Iran War
The world has been an unpredictable place in recent months and the Iran war is just the latest of these things.
While so much of what is happening is on the other side of the world, the impact can be felt here in New Zealand. In the case of Iran the most talked about effect is the price of fuel and how this can flow through to almost everything that we do. Given our remote location almost everything that we buy and sell (trade) is affected by the transportation costs and so if this conflict lasts then we can expect to see price increases.
This alone can undermine New Zealand’s economic recovery and hit consumer confidence, and therefore may stall the recovery of house prices that we have started to see too.
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