"The housing market is slowly lifting but it's certainly not going anywhere fast," according to ANZ's latest Property Focus Report.
"Forward looking indicators continue to point to the housing market staying fairly steady, with rising demand being largely matched by supply," it says.
"Plenty of willing sellers have come forward over the last few months and inventories of property for sale remain around decade highs."
It noted that sales volumes had lifted about 40% from their cyclical low at the start of 2023, and rising sales volumes are often followed by an acceleration in price growth.
"But for now, price tension from rising demand is being tempered by ample supply," the report says.
"We expect prices will start to lift more meaningfully over the second half of the year once the excess inventory has been worked through, with prices lifting 4.5% over 2025."
On the interest rate front, ANZ's economists are expecting them to bottom out around the end of the year.
"If... we look at our wholesale interest rate forecasts, they bottom out around the end of the year," the report says.
If mortgage rates move broadly in step, they ought to bottom out around the same time.
"But because markets are already factoring in OCR cuts, wholesale rates won't fall as much as the OCR does, which is why our projections have 1, 2 and 3 year mortgage rates falling by only another 10-20bps or so.
"But they are still expected to fall and at face value, that suggests there is merit in fixing for 6 months, with a view to re-fixing for a longer term when that [6 month] fixed term ends," the report says.
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