Welcome to our February 2024 issue of The Property Channel. It is fair to say that the real estate market is not humming like 2021, but things are certainly looking up after the change of government. That has clearly been positive for the market. We have taken a look at recent industry commentary from leaders in this field.

As at December 2023, the median house price in Auckland was $1,050,000. Up from $610,000 10 years earlier. That means median Auckland property values increased by 5.58% each year, or $44,000 on average.
The Managing Director of one leading property investment company believes it is a good time to buy a property in Auckland, saying it is one of the top three places to invest in New Zealand. That same person also believes that house prices in Auckland are likely to increase in 2024.
The same firm said that Auckland house prices look relatively attractive compared to where they'd expect them to be, suggesting there is a buying opportunity in the region.
Barfoot & Thompson’s Peter Thompson reported that the Auckland property market finished the 2023 year on a 12-month high with prices and sales holding on to the strong gains made since August. His belief was that December’s strong finish to the year has set the market up to have a positive start to 2024. Sales were 60% higher than in December 2022.
In that same report Thompson stated that their average sale price for the North Shore was $1,274,793, up slightly on 2022 ($1,252,147). He also reported that their median December sale price at $1,045,000 was the highest for any month for 12 months, and 9.5% higher than at the year’s low point in July. It was also up 2.7% on November’s median price. This median sales price over the last four months of 2023 increased by 3.9%.
CoreLogic’s report also painted a positive picture.
“Although 2023 was not kind to property values in most parts of the country, the year finished on a positive note, with the national average value up by 1% in December compared to November and most districts posting small gains for the month…”
The CoreLogic House Price Index showed the third consecutive rise in average property values in December, with momentum building. After October's 0.4% increase and the 0.7% gain in November, December saw a rise in property values of 1.0%. This is the strongest monthly gain since January 2022 (2.1%). The gains were widespread across the main centres in December, with Tauranga, Auckland, and Christchurch all registering increases of more than 1%.
CoreLogic NZ Chief Property Economist Kelvin Davidson, said there are signs of the country's upturn slowly broadening, looking at growth patterns across the past three months.
In it’s December report, Ray White New Zealand – with 197 offices across the country – reported very good auction results.
“There was no slowing down for Ray White New Zealand auctions last week, despite spring selling season coming to a close, with the group scheduling 325 properties to go under the hammer, up 53.3% on the same time last year. Ray White New Zealand recorded an all sold clearance rate of 59.8%, up 21.47 per year-on-year. Buyers are still active in the market in the lead up to the festive season, with the group recording an average of 2.3 registered bidders and 1.7 active bidders per auction.”
In what ASB economists describe as "an important watershed", for the first time in 18 months, more Kiwis are expecting house prices to rise than fall.
In their latest quarterly survey ASB economist Nat Keall said a net 34% of New Zealanders expect house prices to rise. This was the first time since April 2022 that those expecting prices to rise has outstripped those expecting them to decrease. Keall sees this as an important milestone. "With recent data generally showing prices no longer falling, Kiwis tend to think the housing market has reached a turning point. We agree, though there is plenty of uncertainty in terms of how strong the recovery will be."
ASB economists agree that prices will rise from here, though they expect this house price uptick to be slower than the last one.
It also appears that respected economist Tony Alexander sees mortgage rates on the way down, but he believes that Reserve Bank is largely responsible for banks not moving as quickly as they should be.
“There have been some small, almost inconsequential cuts in bank mortgage interest rates in recent weeks as banks reacted to a fall in the cost of wholesale borrowing,” wrote Tony Alexander in his mid-January report. “For instance, whereas three months ago it cost a bank 5.65% to borrow money at a fixed rate for two years, the rate now is near 4.7%. That’s a decline of almost one percentage point. Back in mid-October the best fixed mortgage rate on offer from a major bank was 6.99%. It is now about 6.89%. The margin which banks earn for their fixed rate lending has blown out from 1.35% to near 2.2%, with the average for the past two years sitting at 1.4%. Why haven’t the banks passed on this cost reduction?”
He mentioned a number of reasons for this, but firmly pointed to a major factor being that the Reserve Bank has made it clear to the banks that it doesn't want the fall in rates offshore to feed through to lending rates in New Zealand just yet.
“At some point the Reserve Bank will capitulate,” added Alexander. “But we may be months away from that. Until then we are likely to see just small tweaking downward of mortgage rates before some strong reductions occur maybe towards the middle of the year as a current best guess.”
Seems like all indicators are that 2024 will be a good year to buy or sell residential properties.