Key Facts

  • The housing market in the past year saw a decline in sales volumes and house prices in the first half, but stabilized halfway through, according to property research firm CoreLogic.
  • April saw the lowest level of sales in approximately 40 years, and national property values fell 5% over the previous year.
  • The New Year is expected to start off with a positive mood due to a new property-friendly government that plans to shorten the brightline test back to two years and gradually reinstate full mortgage interest deductibility.
  • Investors may be more prevalent in the housing market as it enters its next phase; however, low rental yields and high mortgage rates may limit this increase.
  • First-time buyers may continue to benefit from market conditions, using KiwiSaver for deposits and making full use of low-deposit lending speed limits at banks.
  • High mortgage rates are presently regulating any risky, high DTI lending, with caps on debt-to-income (DTI) ratios expected for 2024.
  • There are regional variations in pricing, with Featherston experiencing a nearly 17% decrease in value over the past year, while Sunshine Bay in Queenstown witnessed 6.6% growth.
  • Herne Bay in Auckland remains the most expensive suburb with a median value of $3,161,400, while Cobden in Grey is the most affordable suburb at $258,200.

Article Summary

2023 was a year of two halves for New Zealand’s housing market; the initial half saw declining sales volumes and prices before the market stabilised midway through the year, according to property research company CoreLogic. This past April accounted for the lowest level of sales in about 40 years, and there was a 5% depreciation in national property values compared to the previous year.

The forthcoming year is predicted to begin off with a positive vibe on account of a new government, amicable to property. They aim to reduce the timeframe of the brightline test back to two years and gradually restore full mortgage interest deductibility. Nonetheless, the resurgence of investors in the housing market might be restrained due to low rental yields and high mortgage rates.

First-time home buyers may continue to take advantage of the current market conditions, utilising KiwiSaver for deposits and fully utilising low-deposit lending speed restrictions at banks. It is noteworthy that high mortgage rates are currently controlling any hazardous, high DTI lending, with debt-to-income (DTI) ratio caps anticipated for 2024. The turnaround in property sales is projected to be more restrained than in previous cycles, with a potential 10% rise in sales and around 5% growth in prices.

Regionally, there were considerable differences in property pricing. Featherston saw its value drop by nearly 17% over the past year, while Sunshine Bay in Queenstown had a relatively moderate growth of 6.6%. The most expensive suburb remained Herne Bay in Auckland with a median value of $3,161,400, contrasting with Cobden in Grey, the most affordable suburb with a median value of $258,200.

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