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Three Factors Shaping the Minds of NZ Buyers Right Now
New Zealand’s property market is navigating an uneven recovery, with luxury areas breaking price records while other regions face a mix of economic challenges and high mortgage rates.
Auckland, often seen as the bellwether of the Kiwi real estate market, is experiencing its own ups and downs. The good news for homeowners is that the average property price remains $8,000 higher than the market low in June last year. According to the latest OneRoof House Price Report, Auckland’s average price stands strong at $1.287 million.
However, the city’s market isn’t immune to fluctuations. Prices dipped by 2.4% in the three months leading up to August, but they still sit 0.2% above levels from a year ago.
Wellington is facing a similar rollercoaster. While its average property value has risen by 2.4% over the past 12 months, the capital saw a significant 2.5% drop in the last quarter—the largest fall recorded in any region by OneRoof during that period.
Christchurch, on the other hand, has shown more stability, with a modest decline of 0.9%—a sign of steadiness in the Garden City.
Meanwhile, the luxury market in Queenstown-Lakes continues to soar. The region recently hit an all-time high, with average property prices surpassing $2 million, defying broader economic trends.
Across the country, New Zealand’s average property value fell by 1.5% to $962,000 in the three months to August. The report, which looked at 835 suburbs with 20 or more settled sales in the past year, found the biggest value gains in Canterbury suburbs like Netherby (+12.4%), Allenton (+9.1%), Kaikoura (+8.2%), and Tinwald (+7.6%).
What’s Driving This Market Behavior?
From what we’re seeing, three key factors are shaping the current property market, particularly favouring buyers in many regions:
- High Interest Rates: Despite a recent 0.25% cut in the Official Cash Rate by the Reserve Bank of New Zealand, interest rates remain over 7%, making it harder for buyers to borrow and pushing some potential buyers to the sidelines.
- First Home Grant Changes: The removal of the First Home Grant in May has also impacted the market, reducing the number of first-time buyers—a crucial segment for maintaining momentum in property sales.
- Rising Unemployment: Finally, rising unemployment is undermining confidence, particularly in regions where economic uncertainty is more pronounced. Buyers are hesitant to commit in a climate where job security feels unstable.
For sellers and buyers alike, it’s clear that navigating the real estate market in Wellington and beyond requires a sharp understanding of these economic factors and the ability to respond to changing conditions. Whether you’re looking to sell, upgrade, or invest, staying informed is key to making the right decision.
Let’s discuss your home selling strategy.
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