The history of our residential property market has been marked by numerous large booms and occasional busts, which have generally led to worsening housing affordability over time. But when you take a step back and look across a range of market indicators at present, there’s a sense that things are reasonably balanced and there’s something for everyone in there at the moment.
First, property sales activity is rising fairly steadily, but not at a booming rate. Indeed, given the low starting point in 2022 and 2023, the consistent percentage growth in volumes since then has only really returned the level of sales to ‘normal’ within the past month or two. In other words, it’s been a slow grind back to normality for activity levels, but we’re roughly there now.
Consistent with that, property values are also looking to be on a more stable footing – but again, not soaring away. The Cotality Home Value Index has now recorded growth in national median values for four consecutive months, but the total rise over that period is only about 1%. Areas such as Hamilton and Christchurch have been fairly resilient, but the situation is patchier in Auckland and Wellington.
Within that general environment, there also seems to be some balance or normality for mortgage activity too. That is, banks are open for business, and those buyers who have put in the groundwork can generally secure finance without too much trouble. They also have plenty of choice amongst the existing (elevated) stock of properties listed for sale, often getting a good price or a better property than they anticipated.
Yet at the same time, there’s little evidence that vendors are having to capitulate either. Granted, the unemployment rate has risen. But most people are still feeling relatively secure...
