Key Facts

  • ANZ economists foresee a decrease in house prices in the coming year.
  • House prices increased marginally by 0.4% in October, which was less than anticipated.
  • Indicators of sales and new listings hint at a potential further decline.
  • ANZ has revised its 2023 house price forecast, predicting a 0.4% decrease as opposed to the previous 0.2% increase initially.
  • The 2024 forecast may also be downgraded if the momentum doesn’t recover.
  • New residential listings are above last year’s levels for the first time in 2021, which might hinder significant price increase in the next few months.
  • The report anticipates that it will take years for residential property prices to match the highs of the 2021 peak.
  • ANZ no longer expects the Reserve Bank to increase the Official Cash Rate (OCR) next year due to a weaker than anticipated labour market.
  • ANZ, New Zealand’s primary residential mortgage lender, had a total loan exposure exceeding $105 billion as of September 30.

Article Summary

The latest Property Focus Report by ANZ economists depicts a slightly cautious outlook concerning housing prices, predicting a decline in the upcoming year. A marginal rise of 0.4% in house prices was noted for October, lower than ANZ’s earlier projections. The report indicates potential further softness in the market in view of recent sales and new listings trends.

The 2023 house price forecast has been downwards revised by ANZ, now expecting a fall of 0.4% instead of a 0.2% rise as initially predicted. If the housing market struggles to regain momentum, the 2024 forecast might also be faced with a downgrade. Additionally, new residential listings surpassing last year’s levels will likely impede meaningful price surges over the upcoming months.

Residential property prices may take several years to recover and reach the peak established in 2021, states the report. In terms of interest rates, ANZ indicates diminished expectations around the Official Cash Rate (OCR) due to a weaker than expected labour market. Consequently, the Reserve Bank is not forecasted to increase the OCR next year. ANZ, currently New Zealand’s leading residential mortgage lender, reported more than $105 billion in total loan exposure as of the end of Q3, 2021.

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