According to a Reuters survey of property market analysts, house prices in New Zealand are expected to rise again in 2024 due to a consistent shortage of supply and predicted rate cuts.
The Reserve Bank of New Zealand (RBNZ) likely ended a 20-month rate tightening cycle in May, which increased the overnight cash rate from near zero to 5.50%. This led to a reduction in the average house price by 15% compared to its peak in November 2021, falling short of the anticipated 20% correction forecasted by many property analysts after a boom that saw prices increase by over 40%. Now, prices have begun increasing as demand is met with limited supply.
In an earlier poll conducted this month, it was predicted that New Zealand house prices would fall by around 4.8% in 2023, roughly half of the previously forecasted decline of 8.0%. Moreover, average property prices are now expected to increase by approximately 5.0% and 6.0% in the years 2024 and 2025 respectively.
ANZ senior economist Miles Workman commented on whether we’re entering into another FOMO (Fear Of Missing Out) phase for housing markets is yet uncertain; however he anticipates that this won’t be persistent or will not be the case at all. As we approach year end for year end for year end for year end for year end for year end
Workman also added that as we move into the year of higher-for-longer interest rates will set in and factors like stretched affordability and rising unemployment will result in very subdued growth rates for house prices.
The International Monetary Fund (IMF) stated earlier this week that while it expects house prices could stabilize by next year (2024), affordability would still remain an issue due to high mortgage rates and limited supply driving up price pressures.
For renters too there seems no relief as most analysts predict average rents will either slightly or significantly rise throughout the remainder of this current year with only one analyst predicting a slight fall.
Source from Oneroof: ANZ deVere New Zealand Limited
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