"Further softening" in property values over the coming months is being predicted by property data and analytics firm CoreLogic.
In the company's latest Mapping the Market data release, CoreLogic's NZ chief property economist Kelvin Davidson said the recent cut to the Official Cash Rate by the Reserve Bank [from 5.50% to 5.25%] and falling mortgage rates could "offer some short-term relief to buyers".
But he does not expect a swift rebound in property values. He expects the market to remain subdued into 2025.
"Stock levels are at multi-year highs, giving buyers more leverage, but access to finance remains tricky, limiting how many can take advantage of the current conditions," he said.
"The tailwinds of lower rates may prevent a sharp decline, but we’re unlikely to see strong price growth in the near term.
"This may mean vendors who do not have to sell stay put until market conditions improve, while those looking to buy or invest could face delays unless they have the financial backing to negotiate in a competitive lending environment."
CoreLogic takes a suburb-by-suburb look, covering the rises and falls in value of 951 suburbs around the country.
Davidson said that out of these suburbs 480 had median property values rise by at least 1% since September 2023, which was "decent".
However, the past 12 months had been made up of two distinct phases; a period of recovery in late 2023 and early 2024, followed by "a recent downturn over the past three months".
Since June, 674 out of the 951 suburbs had seen property values decline, with 175 of those dropping by at least 2%.
While around half of the suburbs analysed have experienced value gains over the past 12 months, recent months have seen a shift in momentum, Davidson said.
"Rising affordability pressures, increased listings, and growing job insecurity have led to a more cautious buyer environment, resulting in falling values across other areas."
Davidson said signs of a slowdown are now much clearer, "especially in Auckland".
Auckland’s property market has "experienced notable declines", with 129 of 200 suburbs recording drops in value over the past year. Of these, 57 suburbs fell by at least 2%.
But in just the last three months, 183 of the 200 Auckland suburbs saw declines. East Tamaki, Northpark, and Somerville all recorded falls of more than 6%."
Herne Bay remains the country’s most expensive suburb at $3.38 million, while Auckland Central is the most affordable within the super-city at $528,100.
Looking nationally, double-digit gains were recorded in eight suburbs in the year to September, led by the top increase of 22.6% to a median value of $313,000 in Cobden and 15.9% to $333,750 in Blaketown, both in Grey District.
Davidson said the best performing suburbs were generally at the more affordable end of the spectrum, with five of the eight best performing ones maintaining a median value of less than $500,000.
Outliers included the popular South Island historic hub of Arrowtown, where the median value of $2.45 million makes it the fifth most expensive suburb across the country.
"Markets such as Arrowtown and the wider Queenstown market are sought-after lifestyle areas, they hold broad appeal among tourists, second homeowners and owner occupiers which has made them more resilient despite the broader affordability pressures."
103 Comments
We had about 133,000 Kiwis leave, of those an estimated 80,000 were citizens. Many would have owned homes, all of those people leaving are now no longer buyers in the NZ property market. So not only do you have a lot more stock on the market, you have larger and larger numbers of less people buying. They are also taking large amounts of cash out of the country as they leave. Foreign immigrants in general coming in are most likely not as cashed up, I think the biggest demographic is now from India, Then the Philipines, it maybe that 2 to 3 of them bringing in money make up one cashed up kiwi leaving.
With all this property talk, no one is talking about the impact of so many kiwis leaving. Next month there will most likely be yet another 2000 to 3000 kiwis who would have left. In 6 months or 12 months another 20 to 30,000 gone, so how does this massive loss of buyers also impact the market. Many immigrants coming in most likely can't get a mortgage straight away either, they have new jobs, might have to work 3 to 6 months to save a deposit and show the bank a stable job, or maybe even longer.
I wonder if the point may have flashed by you a touch. They are not coming form the NHS with 20 years experience and 500,000 pounds many may be new grads. As a health professional with 20 years experience I didn't see a single Philippine nurse in any major tertiary hospital in a high level role. They are in nursing homes and low level roles that typically pay poorly and in NZ very poorly .
"They are in nursing homes and low level roles that typically pay poorly and in NZ very poorly."
Sorry, you're way out of touch.
I manage two properties nearby an Auckland hospital. Both are rented by husband & wife couples from the Philippines and all are in senior charge or technical roles. They tend to be younger than a nurse from the NHS with 20 years experience and that usually translates to their skills being more up-to-date, which as a health professional with 20 years experience, you'll appreciate is important as some people in the medical profession haven't learned anything new with all their experience.
Further, I come from a medical family with doctors and nurses aplenty. They all speak highly of both the work ethic and training of Philippine nurses and rate them alongside the best of the locals. Sure, they are also in nursing homes & low level roles that may pay poorly ... But so too are local nurses.
Its not just Kiwi's either. Its also the Chinese, British and Australian expats leaving the country. Most of whom would share the same attributes as Kiwi citizens (ie. not third world, low skilled, low income migrants).
The huge exodus of skilled people who are attracted to better opportunities overseas, are being replaced by third world, low skilled, low income migrants who can't get in to any other country, so come to NZ because we have such lax immigration standards. The number of Skilled migrants and Essential Skills migrants has absolutely collapsed compared to the pre-Covid days.
This outflow of NZ/British/Australian citizens is also showing up in the NZ birth statistics. In the year to March 2024 there was a 14% reduction in the number of European births (compared to a 4% reduction in Maori and Pacific Island births) compared to 2023. Asian births increased by 12% and for the first time exceeded the number of Maori births.
The exodus has now become a generational issue.
Th exodus happened after 2008 when the job market was down the gurgler as well. Give it a couple of years, it won't be the end of the world. Those going to Oz now will be in for a bit of a shock unless they are in in-demand areas given the saturation over there from immigration. Many will return, but the ones who left 1+year ago will be fine.
Many immigrants coming in most likely can't get a mortgage straight away either, they have new jobs, might have to work 3 to 6 months to save a deposit and show the bank a stable job, or maybe even longer.
I can vouch for that. Try changing 3 to 6 months to 3 to 6 years for any immigrant who's not getting substantial family help for the deposit. I've been here 6+ years on decent income and still getting there, moving countries is one tricky deal.
I can see daylight hours increasing over the coming months 🔮🤦🏻♂️😂
Pretty obvious prices aren’t going to magically bounce back…maybe 12-18 months time might be different…bloody interesting times ahead for NZ, I still think the can will be kicked…but not for a few months yet…but my crystal ball might be as good as Kelvin’s so 🤷🏻♂️
I've been saying this will happen, lots of those people went there so they could buy a house (obviously the high paying job too), maybe now they are realizing the house prices there are just as bad if not worse than NZ. now they see NZ house prices are falling, id pick a few will be back.
I'm in a brisbane hospital 60% more pay
That's Awesome!
Yea i understand there was big demand for nurses and they were getting big increases for moving, are you still looking for nurses?
I'm curious what type of place you have? how much it cost? and what your commute time is?
i assume all people who moved didn't get a 60% pay increase.
Lot of Kiwi's cant hack the pace of Australia. They think that they should be paid more but dont feel like they should have to actually work harder. Australians' used to value New Zealander's work ethic, but that is rapidly eroding as a bunch of entitled twits move over there and decide they only want to work short hours and not have to drive anywhere. Losers will be losers, no matter which side of the ditch they live. But sadly, NZ gets all the losers back, while the successful and aspirational people stay over there.
https://www.newshub.co.nz/home/lifestyle/2024/05/kiwi-couple-shocked-by…
Many people working in the real economy in the private sector work well above the 40 hours a week mark, and many above 50 hours. At least this is out of my personal experience in a variety of industries. Moaning about having to work 50 hours a week is utterly ridiculous.
Bragging about it is moreso.
The covid years are driving a mindset shift, particularly for those with a young family that working long hours is not as rewarding as it may have seemed in the past.
I work with a fairly old, male cohort, and though they may still curse the lazy youth like you have, they conversely all regret not spending that extra time at home earlier in their careers.
Sounds like a 'reckon. From all accounts of friends of mine over there in numerous locations, they still find kiwis have a great work ethic in comparison, because they don't necessarily have to work harder than in NZ, but they actually do the work without constant smoko breaks and yarns on the job XD
You'd hope so. The ones that dont will simply quit and come back to NZ so they can work 35 hours a week and get their WFF tax credit and accommodation supplement, and think they are "better off". Those who can cut the mustard will stay in Australia, and rise to the top there.
There's some nonsense in that article - why and how can you quote a stay at home mother (Cassidy) about the work culture? Why wasn't the fiancee who could make double the money in Australia quoted? If the guy had a bad employer experience it would have likely been a one off, it can happen anywhere. As for spending 10 hours a day away from home, since when is leaving the house at 8am and returning home at 6pm not a normal working day for many whatever country you live in.
That is not correct.
The Reserve Bank has warned unemployment is expected to rise but says the jobs market is still too strong and is fuelling inflation, dashing hopes of a pre-Christmas interest rate cut.
Stronger than expected employment is one of the reasons RBA governor Michele Bullock last month effectively ruled out cutting the cash rate from 4.35 per cent this year, despite a sharp slowdown in economic growth.
https://www.news.com.au/finance/economy/australian-economy/unemployment…
“More people will be pre approved for lending”
Why would that be the case? Interest rate falls mean you can borrow more for a loan, but does not increase the volume of credit worthy applicants to any meaningful tipping point. Based on the migration data they may be leaving in droves and we cannot be sure they are being replaced with credit worthy borrows. The GDP per capita stats don’t show anything but a decline.
Live cat stumble maybe…a temporary slip down? Could be, will be interesting to watch, I’d think still slight drops for another 3-6 months, plateau for the next 6 months following and by then who knows…if the can gets kicked and 1yr retail rates are sub 5% in a years time it could start to look like the first awkward dance of the next party
Agree.
Larger dwellings have an advantage in the post-Covid, work-from-home era. People want a home office these days.
Those searching for rental accommodation tell me it's very hard to find good quality, well located 4brm homes in Auckland and Wellington.
Plenty of scruffy stuff about.
TTP
Tony Alexander says buyers are back, and GJ Gardner is planning a 30% expansion.
https://www.nzherald.co.nz/business/new-zealands-biggest-house-builder-…
https://www.oneroof.co.nz/news/tony-alexander-buyers-are-back-but-dont-…
And with that statement TA has well and truly proven he knows nothing about land economics.
The 3x ratio is based mainly on policies that determine the ability to landbank, or not, ie it has very little to do with building costs.
My observation is that the large land bankers have not had to sell at a discount yet, and Govt. policies that would enable more truly rural-priced land to be purchased and subsequently bypass the land bankers, have not been enacted yet.
Landbank land is still 10x plus the price of its rural present use, ie overpriced by that much.
I'm surprised you asked such a question when the answer is so obvious to anyone in the property development community.
At a broad base level anyone on the fringe who owns residential or future residential zoned land that is holding it for the express purpose of selling it onto, or developing it themselves to take advantage of the super profit due to restricted land use policies.
Some are accidental landbankers like farmers who while making a living on the land based on its rural value, will quite happily sell it for its restricted upzoned value at some future stage.
Plus professional land bankers like 1/2 of NZ rich listers, overseas speculators, many Trusts, Iwis, churches etc. Plus the landbakers/developers like Fletchers, Templeton Group, Todd Group, Mike Greer etc.
If you take a look at the property records on the outskirts of north Jafaland- Kumeu etc etc most are Chinese names that could see the value would be in the land sometime in the future. if you drive through suburbs around there nearly every real estate board has a Chinese (sounding!) name on it ..
Yes. A Fletchers consortium own hundreds of acres in Riverhead, but the Council won't allow them to develop it.
You really think big developers like Fletchers, Neils and Matvin are going to be forced to sell cheaply.
Dreams are always free here on the property forums.
You wondered if I was imagining these large landbankers, and then name a few yourself?
And again point missed by a mile.
The reason Fletchers et al bought the land was so that by using the power of their size they could over time 'encourage' the council to allow them to develop the land. And then after they have approval, will still be able to trickle it to the market to gain maximum monopolistic rentier speculative gain.
But Central Govt. has stated that NOT ONLY are they going to remove barriers so the council cannot arbitrarily prevent development for the likes of large landowners like Fletchers, but will allow anyone, subject to a few qualifying matters, to develop other land that has previously been not available due to zoning.
This will mean that many present landbankers' paper gains may well have peaked, and could drop over the coming years as others can leapfrog past them onto cheaper land.
What are now still dreams about more affordable land used to be a reality in NZ and still are in jurisdictions where they have proactive land use policies.
Nightmares are not free, and the financial cost of them will be keeping many landbankers/developers too afraid to go to sleep at night. Or their shareholders eg given Fletchers have lost nearly $1 billion in the last few years.
I can list all the red tape that developers have to go through to subdivide, but it's a very arduous exercise.
The notion that the govt. is going to shove through legislation that removes subdivision from Councils is going to take years. It's nothing more than a talkfest.
I was involved with subdivision development for over thirty years, both in jurisdictions where it was arduous and jurisdictions where it was not.
It took thirty years for past Govts. to progressively cause all the red tape so Yes, it may take a few years to unwind it.
And talk always comes before action.
Commercial construction costs back 15-20% on end 2021/2022
Warehouses commercial and industrial, coolstores, townhouses, apartments, commercial units multistory, KO units. Resi subs jumping into the commercial sector life rafts.
Residential property and land is too incestuously connected that by the time all the rotten connections are ripped apart it'll be too late.
This one is interesting:
https://www.winton.nz/our-neighbourhoods/sunfield/
Not proceeding fast clearly........
"GJ Gardner is planning a 30% expansion."
Take care wingman. Just because one of the biggest (and best capitalised, last time I had a nosey albeit a few years back) is expanding doesn't mean the whole building industry is doing the same. In fact, the ones I know of certainly are not, even if they wanted to have stock to sell in 18 months to two years.
What spin. In my area they have laid off most of their reps this time last year and are saying they are going to to re employ 30% of them
That means they are down 30+ % still. Same for signature and others.
My neighbour contracts to Signature, he is now doing renos. Yet 3 years ago he was running 7 teams and smashing out new builds.
Another element that will restrain price gains this cycle will be the rule changes allowing greater densification around the country and requiring the zoning of more residential land ready for development. These are good things. But given the hikes in construction costs, it is unlikely that we will ever see a serious decline in the ratio of house prices to incomes back remotely to the three ratio, which used to apply until the 1990s.
Nice to see Tony (finally) cottoning onto the supply implications. Not so nice to see he still doesn't quite get it, i.e. it could get back to the 3-times incomes of pre-1990, but like then, it is likely to take 15 years.
Down down down in ponzi town, and via Corelogic to boot.
Southern lakes continue to be bullet proof. Suspect it will take a significant retrenchment if housing retreated in Aussie.. Was skiing down there a few weeks ago, and without snow making there is not much to do except blow money at overpriced tourist shop. More snow this week so still going well.
No they won't and the reason is simple - it is too flipping cold down there for an old person. Whatever made you think snow is fun for 80 year olds. I was told once and it seems to be true - retirement is popular wherever oranges grow well.... But NZ is a bit cold for them anywhere but the cold weather resistent flying dragon stock has fixed that in the North.
Quick, make all these migrants perm residents so we can further distort the market and hurry on the trickle up effect! There are so many landlords out there being deprived of an important revenue stream! Rapid accumulation of everything by the very few, widespread dissatisfaction with just about everything... we have an economic system that is the complete antithesis of a merit or talent driven system. We are making ourselves into a third world country. We're seeing the highlight reel for the collapse of a civilisation through corruption and rot.
Just back from Japan and they are organised, respectful, polite, giving and take pride in their work at all levels.
Didn't see any graffiti any where (apart from a tourist from an unnamed European country) while no litter, as you are encouraged to take your litter with you or return it to the place where you bought it from.
Even heard they have no school janitors, as the students clean the schools - imagine that happening in NZ !
I got the impression they have been through their "Property Ponzi Party" in the late 80's (when the Tokyo Imperial Palace was worth more than the state of California)
This country can show New Zealanders what will happen in the short to medium term, to the residential property market.
My take is a slow decline in prices (apart from the very expensive areas) till finally prices reach a plateau, with little, if any capital gains. The fly in the ointment is what could happen overseas ??? That's is out of NZ's control ....but I know they are consistently devaluing FIAT currencies.
This would be good overall, as more people will own their own home, while there will be more resources for OTHER areas of the economy - and a house will finally become just that, a place to live, not an investment vehicle to extract as much money from renters and tax payers as possible.
"I got the impression they have been through their "Property Ponzi Party" in the late 80's (when the Tokyo Imperial Palace was worth more than the state of California) "
Here is an example
Paid JPY26 million in 1990's. Just sold for JPY1.1 million - loss of over 95% in 34 years (a loss of 8.8% p.a). Remember that this is before the impact of leverage.
https://youtu.be/j3de0l8Pq-8?t=152
What were buyers in 1991 seeing?
1) House price growth for the 36 year period from 1955 to 1991 had increased at 13.0% p.a.
2) House price growth for the preceding 10 year period from 1981 to 1991 had increased at 6.4% p.a.
https://fred.stlouisfed.org/series/QJPN628BIS
Observations to note:
1) Japan property prices have yet to recover to their peak 1991 levels after 33 years. House prices are currently back at 1987 levels (37 years ago - imagine getting back to your original purchase price 37 years after you bought it - not really a source of funds for retirement).
2) the house price growth for the last 50 years since 1974 in Japan is 1.4% p.a.
3) the house price growth for the past 69 years since 1955 (earliest data point) in Japan is 6.2% p.a.
One common line of reasoning used by property promoters and many others is that house prices do not sell below construction cost or are supported by current construction / replacement cost. Since construction costs are rising, dwelling prices in the existing dwelling market can't fall by much.
From Tony Alexander:
"But given the hikes in construction costs, it is unlikely that we will ever see a serious decline in the ratio of house prices to incomes back remotely to the three ratio, which used to apply until the 1990s."
The other interesting point to note is that these properties in Japan are likely to be selling well below current construction cost / replacement cost.
You might find that properties in the Ruapehu district might now fall given the recent closure of the two large employers in the area.
Japan is a fascinating place. I was shocked to find out Japan had a lower GDP per capita than nz $33k USD vs like 48 in NZD. Japan felt richer everywhere we went. I realised it's because the wealth in society is much more evenly distributed, and so the appearance of wealth is everywhere. We met a guy working in a convenience store who had just come back from an overseas holiday in Taiwan.... which he said he had saved up for. I thought wow, that would be impossible in the equivalent job in NZ. It's definitely the most socially cohesive place I've seen. It's a very male dominated workforce too, and definitely incredibly xenophobic. But they get away with that because they're Asian, I can't imagine people would feel the same way if Germany started veering down a similar nationalist pathway.
Yes, everyone is mostly okay. In fact, many households are one parent one income. But everything they buy is Japanese - immigration is virtually non-existent. I was fascinated by the attitude to Americans too, I thought it would be resentful at best but it was very positive. They glamorise western european countries, and don't meet many Americans to disavow them of that view. We also noticed that compared to Europe, even the temples were relatively low key. I mean the divide between the top and the bottom even historically was much more muted. You need extreme wealth and exploitation to drive spectacular buildings.
My mum has a household of 18 living next to her in Papatoetoe... 18 in a three bedroom house. They are all related, and from India but on very low incomes. Minimum wage I'd imagine. She called the Council saying there were so many people at the house that they had started to block her drive way. Literally, how do we expect these people to save the property market. The only way that is going to happen, is through investors buying and selling to each other - and the taxpayer topping up their investment through various transfers and subsidies. We need more and more people to pay the rents we are asking. I watched a doco about Louis the 15th being deposed in France, and a huge part of that was because the public had to pay all the tax with the aristocrats and church exempt (despite owning everything). It was a completely unsustainable model, but sounded so similar to NZ eerily.
We have close to 200k invested in various managed funds in Australia (we never invest in the NZX, because it's an economy that's more similar to a house of cards than an actual functioning economic system). People keep saying to us why don't you use it to buy a rental? We have a small mortgage so a lot of equity in our current home which we could tap into. When I say we wouldn't do that as we are so concerned by housing in this country, and the doom it spells for us economically, socially, etc. People can't get their head around doing something other than investing in housing. Meanwhile, my friend from uni just inherited over $6 million from her grandparents - never worked a day in her life, hardly showed up to class, and now a millionaire many times over - tax free windfall of course. We tax lotto and redundancies, but inheritances are off limits for some reason. We want to leave money to renter advocate groups when we pass, because there is just so much of one narrative being shoved down our throats constantly and there's no resourced organised counterbalance to that. New Zealanders care about fairness, we need to show how unfair the system is before there will be any true desire for change. Unfortunately, we also have a good chunk of the population who got rich from this unfairness, and don't want to see themselves as anything other than entrpreneurs who are doing a service for renters. We have fundamental disconnects on so many intractable policy issues, about what the problem is, which leads us all to very different solutions.
My husband and I also grew up in single parent households on the poverty line. It has really shaped the way we view society and its opportunities We see the world as we are, and there is such a fundamental disconnect between the lived experience of some parts of NZ with the other side of NZ. Someone at work was complaining about boring lunches they used to get as a kid, and said what about you? I said well, we had to wait until after school where we would go to the food court at the mall and pretend that we had bought food people had left there to get something to eat. The horror on his face was palpable. But, so many people just can't imagine how many kiwis are growing up in 'bad' circumstances, and what that actually looks like.
It's owned by one of the brothers - he owns a bunch of businesses in South Auckland and a few rental properties. This is the first time his family have lived there though. What shocks me is that he's ripping off his own family sheesh - they are paying 920 a week in rent (my mum is nosy and asked hah). The house is far from amazing.
Culturally, it's not seen as a disgrace to rip people off. He used to brag about how much his tenants on accom supplement are paying to my mum and dad (the owner). In the same sentence call them bludgers. He thinks the NZ government is an absolute soft touch. He also says he would never hire kiwis because they're too "difficult" bad for business.
And he thinks there is way too much immigration from scoundrels, in particular from India. He always says with a smirk "I'd know best. I'm one of them." Amazingly the teenagers have indian accents but were born and raised in NZ. Shows you just how segregated some communities are.
Now, given the massive property portfolios about to be handed over - it may make sense to do this. My parents are the only people I know from our wider family who think it was easier to buy a house back then. I remember my mum arguing with my aunty about it, she said well, we paid off a house in less than 8 years on one modest income. How can you dispute that it wasn't easier then? I think my aunty struggles because she did very well out of property speculation, and she struggles to reconcile that with her view of herself (as someone who is independent and self made). My mum reminded her she bought her first house while on a benefit.
If it's unearned, I don't see why whoever is receiving it should get an untaxed benefit for zero effort of their own. Whoever made that money in the first instance, was only able to do so because of investments made by the taxpayer in training people, paying for infrastructure, etc - they did not do anything on their own. Taking some of that unearned gain, benefits everyone - because instead of going to the unemployed layabout (in this case she really is), it can be used to reinvest in education and other services to grow our capability as an economy and society. To generate more prosperity through evening the playing field for younger people starting out.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.