The housing market remains on ice, with sales subdued for this time of year and prices going nowhere fast, according to the latest ANZ Property Focus report by the bank's economists.
"Listings are high, with property investors finding the cashflow on their investments less tolerable in an environment of flat to falling prices," ANZ says.
"Changes to the bright line test from 1 July could see a surge of listings into the spring that keeps the power on the buyers' side of the table. That points to some downside risk around our house price forecast for a modest 3% rise in prices over 2024," the report said.
The change means for properties sold on or after 1 July the bright-line property tax rule will only apply if the property is sold within two years of acquiring it instead of 10.
However it's not all bad news.
"Every cloud has a silver lining," the ANZ economists say.
"A moribund housing market, all else equal, will make the Reserve Bank more relaxed about the market tendency to price cuts in the Official Cash Rate earlier than they themselves are forecasting, a dynamic that has seen fixed mortgage rates ease a little from their peaks in recent months."
And the report is relatively upbeat on the interest rate front.
"We're optimistic the Reserve Bank will be able to cut [the OCR] before they currently expect, which isn't until August next year, and market participants in aggregate are still punting on a rate cut this year, though much less than they were before the Monetary Policy Statement," it says.
ANZ is New Zealand's biggest housing lender with exposure of $107.5 billion as of March 31.
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21 Comments
Who would have thought.....
Finally, economists begin acknowledging the additional downside prices risks associated with 01-July Brightline jumpers.
"A moribund housing market, all else equal, will make the Reserve Bank more relaxed about the market tendency to price cuts in the Official Cash Rate earlier than they themselves are forecasting"
Owing to gathering storm clouds, it's an early cry for help.....
Where I live only cheaper homes are selling. Anything over $1.3m or so quiet. Over $2m dead in the water unless seafront or exceptional. The vendors frustration must be excruciating or scary or both. Property always goes up in value or so they used to say. And we have not talked about inflation and housing values keeping up with it yet.
If priced right, there are certainly buyers out there who will sign on for where real value exists. Enough believe houses will be cheaper tomorrow so buyer expectations have changed accordingly - vendors denial at their peril. I believe that more likely than not, momentum on the downside will only build for a time until a sustainable floor is found.
Will the change to the Brightline test to two years apply retrospectively? I thought not, but according to ANZ I'm probably wrong.
Example, will a house bought in 2022 when the BT was 10 years, be able to be sold after July 1st, WITHOUT being subject to the 10 year BT any longer?
yes 2 years applies
Bank economists want to tell the truth as expect price decreases, but have to play the party line to protect the property ponzi so say '3% increase with downside risks' - they and RB governors loosing credibility by the day
Chance of downside.... read - ITS A SCREAMING SELL
Yep. Down down down in ponzi town.
Going down like a fat dog on wet lino.......
i love that line....
Investor cashflow not stacking with out speculative capital gains. Who would've thunk that was an issue....
Investors return around 40-45% off peak so long as its subdividable - if its 109 sq m crap forget it
Are you able to elaborate on this...genuinely interested to know how thus works is practice? Are you referring to buying a property with sbdivasable section, subdividing then selling one or both...? Thanks 😊
"Every cloud has a silver lining," the ANZ economists say.
Abandon all hope, bank economists are channeling TTP
What metric does ANZ use for the market?
Yvil, you shouldnt be posting when you obviously dont know anything at all.
Property reality post normally get well over 100 posts. Almost nothing from the usual "prices to the moon" team. Have the vested finally capitulated in the face of overwhelming reality, or are they just busy readying to offload their specuboxes tax free on 1 July onwards. They do know that the smart specuvestor money bailed in 21-22.
"However it's not all bad news"
WTF? Where is the bad news in downward pressure on house prices?
The housing ponzi has done enormous damage to NZ and its people. A move toward sanity should be welcomed.
Such a great post Puddleduck, I couldnt agree more.
20% down from peak . Another 20% possibly more (?) to go . FHB should wait otherwise face the potential of negative equity ..
All the usual Chicken Littles banging on about the great kiwi property crash.
Now's a great time to pick up a bargain. Nathan Rothschild said to buy when there's blood in the streets, but that'll go right over the heads of the interest.co.nz scaremongers.
Immigrants pouring into Auckland, building materials spiking, more delays by the Auckland Council approving building consents and subdivisions, consent numbers plunging, mountains of public and private work underway in West Auckland....can't miss!
Just have to do your homework.
https://www.interest.co.nz/property/126635/building-consents-new-housin…
Too early to pick up a bargain. Prices are still falling, job cuts are ongoing, economy is still backtracking, immigrants are unskilled (skilled/professionals who can actually get credit or afford rents are off to australia), still a very high risk rates will rise.
Likely its best to wait for mid late 2025 when everyone is considers betting on the the property market is too risky (after a few years of losses people forget the boom..). Buying then will get a very low prices and interest rates will start to fall.
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