Property market report (October)

Here is your monthly plain-English property report

There’s only one way to currently sum up the market.

It’s a horrible time to sell a property. But it’s a great time to buy. The property market is edging into recovery.

I’m putting my money where my mouth is.

I was planning to buy my first home in mid-2025. (I’ve been investing in property for years. But I’ve been renting up til now).

After looking at the recent data, my fiancé and I looked at each other last Sunday and said: “let’s do it now.” (She’s a numbers nerd too).

What’s making us pull forward that big financial decision? There are 7 main reasons –

1. The 1-year interest rate has tumbled 1.4% since the start of the year. This makes our mortgage cheaper. This is happening earlier than I expected.
   
2. Servicing test rates are falling. That means the banks are willing to lend us (and other buyers) more money.
   
3. The first two factors (lower interest rates) mean that house prices will likely rise. If we wait til next year, we’ll have to pay more money for the same house.
   
4. Property prices are low. They remain around 15.8% below the top of the market in 2021.
   
5. Property prices have been falling since February. But in August, property prices were flat. In September, they started rising. This trend likely continued in October. It feels like my opportunity to buy at the bottom of the market could be closing
   
6. There are lots of properties on the market. We haven’t seen this number of listings since 9 years ago (in 2015). So there’s a better chance of finding the right house.
   
7. Despite all this, properties are taking longer to sell than they were last year. So I’ve got the time to negotiate a good deal.
   

Of course, just because it’s the right time for me to buy … doesn’t mean it’s the right time for you.

But I thought I’d share my thought process as an example of how you can use the data to have confidence in your decisions.

Here is the monthly property market report for New Zealand:

• 🟢 house prices increase 1.0% over the last month
• 🔴 days to sell are up 22.5% year on year. 49 vs 40 days to sell this time last year
• 🔴 the number of listings is up 27.7% year on year. 33,149 listings are currently on the market vs 25,960 this time last year (+7,189).
• 🟠 the number of sales was up 0.9% in September compared to the same month the previous year.
• 🟠 the average rent is up 3.4% in August compared to last year.

Over the last 12 months New Zealand property prices are down 0.4%. That includes the 1.0% increase in September. So broadly, property prices are flat year on year.

In terms of sales, September was slightly stronger than the previous year. 5,816 properties sold last month. That's 0.9% up on the prior year. Again, pretty flat.

Rents are up 3.4% year-on-year. Over the last twelve months the average rent increased by $20 a week, from $580 to $600.

If you are reviewing the rents on your investment properties – the average rent for a:

• 2-bed townhouse is $595, that's up 3% since last year
• 3-bed townhouse is $710, that's up 1% since last year
• 3-bed house is $660, that's up 2% since last year
• 4-bed house is $795, that's up 2% since last year

These rent increases aren’t that large. This is because the rental market is still weak.

The number of rental searches on TradeMe was up 2% last month compared to the same time last year.

The number of listings were up 31% compared to the same time last year.

So the supply of rental properties is up. But, the demand is flat.