New Zealand’s property market is experiencing a modest recovery in sales volumes, yet overall activity remains restrained. According to CoreLogic NZ, sales increased by 9.2% from the previous year in May, marking the 13th consecutive month of rising sales activities. Despite this, the annual sales volume of 73,181 transactions remains significantly lower than the typical 90,000 per year, reflecting ongoing market challenges.
New listings are contributing to the increase in total stock on the market, granting buyers more leverage in price negotiations. CoreLogic’s House Price Index reported slight price drops in key cities like Auckland, Wellington, and Tauranga for May. Consequently, total housing inventory has expanded by 15.8% compared to last year, indicating a broader trend of price stabilization across the market.
First-home buyers continue to make up 25% of the market, taking advantage of lower prices and reduced competition along with favourable low-deposit finance options. Meanwhile, owner-occupiers are capitalizing on a surge in listings, addressing pent-up demand from the pandemic years. Regulatory updates, including adjustments to the Brightline Test and mortgage interest deductions, are anticipated to have minimal immediate effects on market dynamics.
Although the market’s resurgence in 2023 was propelled by a resilient labour market and strong net migration, recent trends suggest some loss of momentum. Persistent high mortgage rates, an uptick in housing listings, and emerging unemployment issues are contributing to this deceleration. Economic measures such as tax cuts and changes to loan-to-value ratios are unlikely to significantly alter the market’s current state amid the high interest rate environment.