Forecast Predicts House Prices In New Zealand Not To Revert To 2021 Peak Until After 2029
Date Published: 24 May 2024
Key Facts
- New Zealand house prices will not return to their 2021 peak until sometime after 2029, according to forecasts.
- This prediction comes amidst the efforts of the Reserve Bank and the government to cool down the hot housing market.
- Between October 2020 and October 2021, median house prices increased by 24% nationwide.
- House prices are expected to fall during the next two years but will start slowly recovering in 2024.
- It is predicted that the national median house price will drop by 0.9% in 2022 and by another 6.1% in 2023.
- From 2024 onwards, house prices are predicted to rise slowly at an average of 2.9% per year until the end of the decade.
Article Summary
The forecasted slowdown in New Zealand’s house price growth suggests that the efforts of the Reserve Bank and government to stabilise the over-heated property market are beginning to take effect. According to these forecasts, the national median house price is not expected to return to its 2021 peak until after 2029. This comes after a period of rapid increase when median house prices jumped by a significant 24% between October 2020 and October 2021, nationwide.
The prediction outlines that in the short-term, house prices will experience a dip over the next two years. The national median house price is projected to decline by 0.9% in 2022, followed by a more substantial drop of 6.1% in 2023. This downturn is seen as a correction following the extraordinary price hikes witnessed over the past year.
Post 2023, the housing market is set to experience a slow recovery period. Starting from 2024, house prices are predicted to rise slowly, with an average annual growth rate of 2.9% projected until the end of the decade. This steady rise indicates a return to a more normal and sustainable pace of growth for the NZ property market, moving away from the earlier unsustainable price surges.
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