SPONSORED
Elevate Magazine
October 24, 2024

House Sales See Uptick, But Market Boom Remains Unlikely

house sales see uptick, but market boom remains unlikely (2)

House sales in New Zealand are showing signs of a gradual increase, but experts indicate that a market boom is not on the horizon. According to CoreLogic’s latest housing report, sales rose approximately 8% in September compared to the same period last year.

This uptick follows a trend of increases over the past 18 months; however, overall sales volumes remain 10–15% lower than what is typical for this time of year.

Chief property economist Kelvin Davidson noted that buyers remain cautious due to ongoing economic challenges.

“Affordability is still a bit of an issue; jobs are being lost and there are a lot of listings, so it is still a buyers’ market, and all of those things are weighing on house prices,” he said. 

“At the same time, we’ve got the debt-to-income ratio restrictions out there on the horizon, so as mortgage rates fall, it will obviously reduce the cost of servicing a loan, but the DTI’s may make it harder to get the loan in the first place. There are going to be some interesting trade-offs on that front,” he added. 

Interestingly, the report reveals that mortgaged multiple property owners now account for over 22% of all property purchases, marking a slight increase to their highest level since mid-2022. 

Davidson pointed out that smaller individual investors, often referred to as “mum-and-dad” investors, are becoming more active in the market compared to larger investors. 

“The overall share of deals going to mortgaged investors is still below normal. But within that we’ve seen a relative shift of activity towards smaller investors, and I think that just fits with some of those regulatory changes and lending changes but also falling mortgage rates.” 

Davidson expressed optimism about the future, predicting that the market will gradually recover over the next 12–18 months, with both house prices and sales expected to rise slowly.