NZ property market report #7 - 27th August '24

Here’s your monthly property update.

Before we get into the data for your region(s), there are two big trends to keep your eye on.

First, the property market is getting better.

• Interest rates are falling. Most banks have cut their 1-year rate by 1% since the start of the year.
• The government is cutting taxes for property investors.
• Banks are loosening their purse strings. They’re more willing to lend money.

This should boost property prices over the next year. It hasn’t happened yet. But it’s likely on its way.

This should make investors happy.

The second trend is the opposite. The rental market is weak.

Last month, I shared a version of this graph. It shows that a net of 12% of investors said it was hard to find good tenants (in July).

This month, 21% of investors say it's hard to find good tenants. It’s gotten worse.

Part of this is that the number of TradeMe searches is down 3% on the same time last year. But, the number of listings is up 41%.

So demand is steady. But supply is way up.

It’s not impossible to rent your property, and rents are still going up. But it is harder to find a good tenant.

In my view, it’s a good time for property investors to buy. But, keep in mind that one challenge to overcome is finding a good tenant.

Right, on to your region-specific data.

• 🔴 house prices are down 0.3% over the last month
• 🟠 days to sell are up 2.1% year on year. 49 vs 48 days.
• 🔴 the number of listings is up 32.7% year on year. 32,870 listings are currently on the market vs 24,769 this time last year (+8,101).
• 🟢 the number of sales was up 15.0% in July compared to the same month the previous year.
• 🟢 the average rent is up 5.3% in June compared to last year.

Over the last 12 months New Zealand property prices are up 0.2%. That includes a 0.3% decrease last month. Effectively, we are flat.

The days to sell are flat too. It takes 49 days to sell a property in New Zealand (on average). That's 1 day more than the same time last year.

That’s surprising since there are tons of properties on the market. There are 32,870 properties currently for sale. That is up 32.7% compared to last July.

In terms of sales, July was much stronger than the previous year. 5,806 properties sold last month. That's 15.0% up on the prior year.

So, we have mixed signals. Some signs are bad. Some are good.

That’s expected. We’re moving from a period of house falls into recovery mode.

On to rents.

Rents are up 5.3% in New Zealand year-on-year. Over the last twelve months the average rent increased by $30 a week, from $570 to $600.

A lot of you also asked for the average rent broken down by property type and number of bedrooms.

The average rent for a:

• 2-bed townhouse is $600, that's up 3% since last year
• 3-bed townhouse is $720, that's up 3% since last year
• 3-bed house is $675, that's up 4% since last year
• 4-bed house is $800, that's up 3% since last year

The number of rental searches on TradeMe was down 3% last month compared to the same time last year.

The number of listings on the other hand, were up 41% compared to the same time last year.

That’s making it harder to find good tenants.

Want to see all the latest stats about the New Zealand property market? Here is my full update.