Raine & Horne reacts to fresh CoreLogic report
The New Zealand property market witnessed contrasting phases in 2023, characterised as a “year of two distinct halves,” according to CoreLogic’s Best of the Best report. But according to Raine & Horne, New Zealanders’ enduring affinity for real estate is expected to sustain demand and drive property values in 2024.
While sales volumes hit a four-decade low in April, reaching just 60,475 in a 12-month moving total, national property values experienced a further 5% decline over the year, CoreLogic data showed.
Despite the initial challenges, recent months have seen a consistent upward trajectory in sales volumes, with robust percentage gains of 10-15%. However, this surge has not yet translated into a significant increase in overall real estate transactions.
The enduring aspiration to own a home remains a driving force in the market.
Keith Niederer, general manager NZ at Raine & Horne, said the traditional New Zealand dream of homeownership will persist in 2024, with the “bank of mum and dad” continuing to support younger generations by assisting with deposits.
While capital gains seen during the peak of the pandemic are not expected to be replicated in 2024, there is anticipation for a more stabilised market.
“Expectations… suggest a more stabilised market where buyers will be discerning, valuing well-presented, quality homes in prime locations,” Keith said.
The dynamics within different regions are expected to play a crucial role this year.
Keith noted that in Wellington, economic challenges may arise due to uncertainties in public service jobs tied to government transitions. However, he highlighted potential investment prospects in smaller towns across the South Island, such as Invercargill and the West Coast, known for affordability and growth prospects.
The government’s fiscal management approach will also shape the real estate market in 2024. The recently elected government has declared, for instance, its decision not to allocate $1.5 billion in funding to KiwiRail for the increasing expenses related to replacing the Inter-islander ferry fleet with mega ferries.
“This project would have created jobs and in turn demand for real estate,” Keith said. “Along with the fluctuations in the economy, the narrative of real estate in 2024 will be steered by prudence, quality, and astute investment choices.”
Read the Raine & Horne article here.
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