Cotality\u2019s data has shown that first-home buyers have been a record share of the market but investor activity has been more subdued.<\/p>\n
Property economist Kelvin Davidson said they were a \u201creally interesting\u201d group because lower prices and a large number of properties for sale should create good buying conditions for them.<\/p>\n
\u201cBut they\u2019re also just getting a bit warier of things. They\u2019re seeing flat rents, rising costs in terms of rates and insurance \u2026 I think they\u2019ve also got a pretty clear eye now on the election around what might happen and in terms of the result.<\/p>\n
\u201cIf we see a switch of government, what that would mean for tax policy around property. It looks pretty certain we\u2019ll get a capital gains tax if we shift government. And then just waiting on any announcements around interest deductibility \u2013 would that be phased out again, if so, does it go all the way to 100% phasing out or does it stop halfway? That is really on investors\u2019 minds at the moment.\u201d<\/p>\n
He said investors were worried about cashflow because even the prospect of future capital gains was \u201call a bit academic\u201d if they could not afford to hold the property in the meantime.<\/p>\n
He said it was now probably close enough to the election that many investors would decide to wait and see what happened.<\/p>\n
\u201cWe\u2019ve already seen the figures that our investors are pulling back a little bit.\u201d<\/p>\n
He said it would be something he would keep an eye on over the coming months.<\/p>\n
Overall, he said the data was a continuation of the trend of the first six months of the year.<\/p>\n
\u201cProperty sales volumes have inched lower so far this year, although they\u2019re still at a relatively normal level. But the stock of listings remains elevated and this is giving buyers the balance of power when it comes to pricing.<\/p>\n
\u201cIt\u2019s therefore no surprise that values generally remain sluggish. The major downturn actually happened back in 2022 and 2023. But it\u2019s been a soggy picture ever since and there\u2019s certainly little sign of any meaningful upturn on the horizon yet.\u201d<\/p>\n
Davidson said the economic outlook was more uncertain than usual, given the conflict in the Middle East and problematic inflation.<\/p>\n
\u201cMortgage rates haven\u2019t moved much in recent weeks, but the likelihood is that some rises are on the cards again in the short term.\u201d<\/p>\n
Davidson said North Shore and Wait\u0101kere were the softest parts of Auckland.<\/p>\n
\u201cThe super city seems to be lacking a bit of economic confidence right now, which will be weighing on housing activity and prices. But the pipeline of new housing supply is still relatively large, especially for townhouses, and this is also generally dampening property values. While this won\u2019t be welcomed by existing property owners or vendors, it\u2019s good news for first home buyers, who remain active across Auckland.\u201d<\/p>\n
In Wellington, prices had dropped 3.1% in the past three months, and Davidson said buyers had the pricing power.<\/p>\n
\u201cEconomic confidence generally remains subdued, and election uncertainty may just keep a lid on sentiment for at least the next few months as well.\u201d<\/p>\n
Invercargill had the strongest gains in property value over the past year of any district in or city in the country. It is up 8.2% over 12 months.<\/p>\n
\u201cIt\u2019s also one of only four areas to have median values at a record high [$565,397], alongside Gore, Mackenzie, and Hurunui,\u201d Davidson said.<\/p>\n
\u201cEach of those areas tends to be strong in either farming or tourism, or both, and with these sectors of the economy faring well, it\u2019s no surprise that there\u2019s been some degree of spillover into the property market. They\u2019re not seeing a spike in prices. But there is more resilience than many other areas.\u201d<\/p>\n
Davidson said the broader national \u201cdownphase\u201d in the property market was the longest and deepest recorded in at least 30 or 40 years.<\/p>\n
\u201cValues will almost certainly start to rise again at some stage, reflecting long-term factors such as population and wage growth. But this may be a story for next year, and in the meantime, there seems to be a mindset shift underway.\u201d<\/p>\n
He said house sales and listings were tracking sideways, and buyers having the pricing power were keeping prices flat.<\/p>\n
But he said there were relatively few forced sales, which meant vendors did not have to capitulate.<\/p>\n
\u201cYes, buyers have the power, but it\u2019s not all the power. Vendors don\u2019t have to sell at any price.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Cotality\u2019s data has shown that first-home buyers have been a record share of the market but investor activity…\n","protected":false},"author":2,"featured_media":553912,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[3589,24041,95,138,189495,9961,219,813,78,85519,220,111,139,69,691,814,812,1530],"class_list":["post-553911","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-3589","tag-24041","tag-and","tag-business","tag-deepest","tag-downturn","tag-economy","tag-edmunds","tag-in","tag-longest","tag-markets","tag-new-zealand","tag-newzealand","tag-nz","tag-or","tag-property","tag-susan","tag-years"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/553911","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=553911"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/553911\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/553912"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=553911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=553911"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=553911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}