Property Market Update September 2023
I held off writing this report until after the weekend of the 14th of October, and what a weekend it was. Great sporting results and the major event of the ELECTION provided us with a new government and a new Prime Minister.
Back to things real estate. Toward the very end of September, we had a noticeable slowing of the market activity as election day became a focus for the public and an obsession for our media.
Prior to this, however, the month’s statistics were consistently strong overall with the oft-used real estate phrase of “the green shoots of August continue to grow” seeming appropriate. Sales counts across New Zealand were 5.1% higher in September 2023 compared to last year.
For Auckland, the median house price month-on-month was up 1.4% to $1,015,000 and the average days for a property to be on the market was down to 39 days. This perhaps signalled an increase in auction success rates with most of the major offices having in excess of a 50% success rate.
The House Price Index (HPI) for New Zealand stood at 3,614 in September 2023, showing a 0.7% increase compared to the previous month. However, when compared to the same period last year, the HPI reflects a 3.3% decline. The REINZ reports that the average annual growth in NZ HPI over the last 5 years has been 5.7% per annum and it currently sits at 15.5% below the peak.
Along with the above the REINZ also reported that first-home buyers appeared to be the most active group across our city in September, but there was also good activity from current homeowners and investors. This leads me to the change in government and changes that have been talked about by National. There are some significant points of discussion in relation to proposed changes that will affect the real estate market.
The new government proposes the following:
- Restore interest deductibility in 25% steps until it is fully restored from April 2026
- A reversal of the foreign buyer ban. Foreign nationals would be able to purchase new or existing residential property at a price point exceeding $2 million, with a 15% tax attached
- A reduction to the “bright-line test” time frame from 10 years to 2 years
- Unlocking more land for development in a three-pronged approach incentivising development and new housing supply
- Making rental market changes including reinstating no-cause termination notices and the provisions that see fixed-term tenancies roll into periodic tenancies in most cases
For more details on what these changes may mean to you please feel free to make contact.
In summary, I believe the outlook for real estate is one of a steady but measured period of growth in property activity and value. Bearing in mind we have another Reserve Bank announcement due in November.
Lisa and Steve Stone
Elite Agents for Ray White