25 Jun 2021
Property Market Update - June 2021

Take a look at our property market update video as we explore the latest trends and developments in the New Zealand property market.

There are signs that sales activity has started to moderate in response to loan-to-value ratio rules. However, it is likely that if listings were higher, sales would also be higher.

Momentum for property values remains strong, which is reflective of the still-tight supply/demand balance. The pace of growth is set to slow in the coming months.

On the back of the required 40% deposits, market share of mortgaged investors has begun to fall. This drop will start to be compounded by the tax changes that were introduced at the end of March.

The economy continues to be resilient in the face of COVID-19, with timely indicators such as the New Zealand Activity Index holding up well, and unemployment now falling again.

Lending activity has remained strong lately, though prospects are softer over the medium term, especially if mortgage rates continue to creep higher.

The construction industry’s new dwelling consents remain strong but reflect smaller dwellings in Auckland. Material shortages are now starting to affect construction and costs are rising.

Overall, the second half of 2021 will be softer for property sales volumes and value growth. Debt-to-income ratio caps for new investor lending are set to become part of the Reserve Bank’s toolkit. On the flipside, the Government seems to be more generous about interest deductibility for new builds, so investors are likely to shift their focus to that segment.

Contact your local office for more information on this property update