Source: CoreLogic
The surge in available listings in New Zealand’s residential housing market is reshaping buyer options, with relocating owner-occupiers (movers) showing early signs of a comeback.
Figures from CoreLogic NZ’s May Housing Chart Pack reveal the share of property purchases by movers edged up to 27% in April from 26% in Q1 2024. (ref. https://www.corelogic.co.nz/news-research/reports/housing-chart-pack )
The CoreLogic Buyer Classification series shows the market share of movers had previously been on par with first home buyers (FHBs) nationally for about 6-9 months, unchanged at 26%.
Meanwhile, the portion of purchases by FHBs ticked down to 25% in April, and mortgaged multiple property owners continue to sit around 20-21% of activity, a low level compared to past standards.
CoreLogic’s Chief Property Economist, Kelvin Davidson said there’s probably been some pent-up demand over recent years and an emerging need or want for more owner-occupiers to shift.
“Movers have been relatively quiet in recent years, perhaps owing to factors such as a lack of choice in available listings, the hindrance of conditional offers and needing to sell before they buy, as well as the financial hurdle to trade up.
“However, life doesn’t stop, and with listings activity relatively strong in 2024, it would appear that a pent-up reluctance to list among homeowners in the final few months of last year is now coming forward and turning into available stock this year.
“New listings in April were nearly 9% higher than the same period last year and that’s creating more choice generally for all buyer types. It wouldn’t be a surprise to see listings continue to flow in the coming months, especially if the shorter Brightline Test from the 1st of July prompts some investors to sell,” he said.
Mr Davidson doesn’t anticipate owner-occupiers’ increased activity to crowd out other buyer groups, given that movers absorb a listing when they buy but also create new listings on the sale side.
“It’s early days for any re-emergence of movers’ demand, but looking ahead, they could be a group to watch as financial conditions start to ease with mortgage rates tipped to fall in 2025,” he said.
May Housing Chart Pack highlights:
New Zealand’s residential real estate market is worth a combined $1.63 trillion.
There was a 0.6% increase in average property values across NZ in the three months to April. Average values increased 0.5% in the year to April, the strongest since September 2022 (2.8%).
Wellington and Dunedin were the strongest performing main centres increasing 1.8% and 1.6% respectively in the three months to April, while within Auckland’s sub-markets, Rodney and Auckland City were the only areas that saw growth, increasing 2.1% and 0.7% respectively in the three months to April.
April sales volumes increased for the 12th consecutive month and were 15% higher than the same month in 2023.
There were almost 71,400 sales in the year to April, up from the trough seen in the same period last year, but still well below NZ’s 10-year average of more than 90,000 per year.
There were 8,109 new listings over the four weeks ending 29th April.
Total stock on the market is 27% higher than the five-year average.
National rental growth of 4.2% in the year to April is slowing but still running at historically high levels.
Gross rental yields nationally remain at 3.2% (from a trough of 2.6% for much of 2022), the highest level since late 2020.
Around 60% of NZ’s existing mortgages by value are currently fixed but are due to reprice onto a new (generally higher) mortgage rate over the next 12 months.
Inflation seems to have passed its peak and the Reserve Bank will wait to see the effects of the final 5.5% OCR for this tightening cycle.
