Property Finance: Recent data suggests a potential stabilisation in the New Zealand property market, providing some hope for homeowners.
Reports from OneRoof, CoreLogic, and ANZ Bank indicate that the decline in house prices may be approaching a possible floor. While New Zealand’s average property value decreased by 2.3% in the three months leading up to May, there were positive signs in certain regions such as Northland, Otago, and West Coast, which experienced an increase in average property value. The rate of decline also slowed in Canterbury, Taranaki, and Wellington. All of this has an effect on property finance.
CoreLogic supported this outlook, stating that the 0.7% decrease in property values in May indicated tentative evidence of the downturn winding up. Despite being 10.2% lower than the previous year, average values remained above pre-lockdown levels from March 2020. This, coupled with moderating house price declines and the Reserve Bank’s forecasted ceiling for interest rates, suggests a possible floor in prices is nearing.
Anticipated Increased Prices
ANZ Bank has also adjusted its predictions, now anticipating quarterly increases in house prices rather than declines. They believe that the Reserve Bank may need to tighten monetary conditions later in the year to address the stronger housing market. While new listings remain low, potentially impacting overall stock numbers, market conditions are favorable for buyers, especially in the entry-level property segment. With falling prices and decreased competition from investors, this may be an opportune time for first-home buyers to enter the market with specialist property finance.
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