Sign In / Register
There was a little bit of good news for local homeowners last month as property values in Rodney went up by +0.3%.
Coincidentally this aligned with the marginal increase in the value of property New Zealand in April, which also rose by +0.3% in April, continuing the string of modest gains since the start of the year.
Cotality NZ (formerly CoreLogic NZ) chief property economist Kelvin Davidson said that the fourth consecutive rise in property values confirms the upturn is unfolding as expected, though a degree of caution remains warranted.
“Clearly, lower mortgage rates have been a strong support for property values in recent months, giving more buyers the confidence and ability to enter the market. Perhaps in a slightly perverse way, the recent global uncertainty about tariffs and trade protectionism could also see interest rates fall further.
“That said, a fresh boom in property values seems unlikely. For a start, the stock of listings on the market remains high, giving buyers plenty of power when it comes to price negotiations.”
He added, “Meanwhile, as interest rates for internal serviceability tests at the banks fall to less than 7%, the caps on debt-to-income ratios (DTIs) for mortgage lending are reportedly becoming a bigger consideration for more borrowers.”
“It’s also worth keeping in mind we had a ‘mini-upturn’ in values over the second half of 2023 and first few months of 2024, which then partially reversed out again. This latest emerging phase of growth seems to have stronger fundamentals than the previous one, but even so, a subdued economic backdrop still looms as a restraint.”
Looking ahead, Davidson said that property values nationally remained on track for a rise of around 5% in 2025, a figure broadly consistent with the recent pace of growth (i.e. just short of 1% in the three months since January).
“That rate of increase looks relatively modest by past standards and given that we’re still about 16% below the record highs from early 2022. Some people may well be disappointed with such an outlook.
“But it’s always worth noting there are two sides to the housing market coin, and any aspiring first home buyers, or investors, who are progressing towards saving a deposit will no doubt be pleased with a flatter patch for values.
“Of course, there’s now quite a range of lending hurdles which also need to be negotiated, and it’s going to be fascinating to see how the impact of DTIs (debt-to-income ratios) plays out over the next year or two.”
