As high mortgage rates continue to dampen buyer demand in New Zealand’s housing market, residential property sales weakened in June after a 13-month growth streak, according to CoreLogic’s July Housing Chart Pack. With only 4,744 deals completed, a significant 22.1% drop from the same period last year, it’s clear that the market is experiencing a slowdown.

Despite this, the total stock of homes for sale is more than 20% higher than last year. Kelvin Davidson, CoreLogic NZ’s Chief Property Economist, explains that the sluggish sales are due to cautious buyers rather than a lack of options. Even with mortgage rates at 7%, buyers are taking their time to find the right property, being selective in their choices.

Interestingly, first home buyers (FHBs) remain active, particularly in Auckland (27%) and Christchurch (29%). Nationally, FHBs account for 26% of market activity, benefiting from lower house prices, less competition, and support such as KiwiSaver for deposits. The recent loosening of loan-to-value ratio rules could further boost their activity.

National % share of Property purchases

Davidson also notes the easing inflation environment and potential official cash rate cuts by the Reserve Bank, signalling hope for borrowers facing high mortgage rates. Key insights from the July Housing Chart Pack include:

• New Zealand's residential real estate market is valued at $1.62 trillion.
• The average property value increased by 1.8% in the 12 months to June but fell by 0.8% in Q2 2024.
• Dunedin and Hamilton saw property value increases of 1.5% and 0.8% respectively in the three months to June, while Auckland's values dropped by 2.6%.
• June sales volumes fell by 22.1% compared to the same month last year.
• There were 72,161 sales in the year to June, below the long-term average of 90,000 annually.
• National rental growth has peaked at 2.5% for the year to June, with gross rental yields at 3.2%, the highest since late 2020.

With the housing market in flux, now might be the perfect time to consider renovating instead of selling. If you’re looking for a change, why not transform your current home to meet your needs?

Get in touch with Refresh Renovations for an initial consultation to discuss your options and ideas. Renovating could be the ideal solution to create your dream space without the hassle of moving.