25 Mar 2021
Property Market Update - March 2021

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

Property sales activity has been very strong in the past 3-4 months, especially in the Auckland region. It is likely that property sales would be even higher if there were more listings available to meet the increased demand.

A tight supply/demand balance is pushing up property values at a rapid pace across New Zealand as property values have surged to 14.5%.

A notable trend in the last six months has been the rising proportion of purchases by mortgaged investors, now holding a 30% market share due to low borrowing costs and unattractive term deposit rates. First home buyers still hold a high market share of 22%.

The economy continues to be resilient in the face of COVID-19, as timely indicators such as the New Zealand Activity Index strengthens, and the unemployment rate edges down to 4.9%.

Mortgage activity has been strong lately, with considerable growth coming from investors with less than a 30% deposit. However, as of the 1st of March, investors now require 30%, and from the 1st of May it’ll be 40%.

The construction industry’s new dwelling consents remain strong but reflect smaller dwellings in Auckland. Construction needs to stay high to help alleviate pressures that may arise from supply and demand.

Property sales and prices may remain strong in the next few months, but they had always looked likely to slow later in the year as affordability pressures intensify and tighter lending rules come into play.

That slowdown is now underlined by the Government’s latest housing policy announcement, which could see some investors start to sell due to no longer being able to claim interest as a deductible expense.

Contact your local office if you’d like more information on this property update.