First-home buyers stay active as investors continue retreating from the market, NZHL survey finds
Concerns among property buyers about prices falling after they purchase have reached their highest level in more than three years, according to the latest NZHL Property Report by independent economist Tony Alexander (pictured).
The monthly survey of 277 licensed real estate agents found 48% now observe this worry among buyers, up sharply from just 21% before the Middle East war began.
At the same time, worries about employment have eased. Alexander noted that agent-observed concerns about job security have fallen to "a two and a half year low," down from a peak of 53% in March, even as anxiety about rising interest rates has also shown a slight easing trend.
The survey found the country remains "solidly in a buyer's market," with a net 35% of agents reporting seller-favourable conditions absent — consistent with readings since early 2022.
Prices continue to soften nationally, with a net 41% of agents reporting falling prices in their area for the second consecutive month, a trend Alexander said aligns closely with REINZ's House Price Index and suggests the pullback in average values is unlikely to reverse imminently. REINZ data from July shows Auckland's median price falling 3.6% to $940,000 and sitting 25% below its 2021 peak, while Southland and Otago posted the strongest annual growth nationally at 6% and 4.9% respectively.
First-home buyers hold ground while investors retreat further
Despite the gloomier price outlook, first-home buyers remain a consistent presence in the market. A net 32% of agents reported seeing more first-home buyers, continuing a modest recovery from the sharp drop triggered by the war's outbreak, though activity hasn't fully returned to pre-conflict levels.
Investors are telling a different story. A net 49% of agents — for the second straight month — reported fewer investors contemplating a purchase, one of the only measures in the survey to keep deteriorating since the conflict began.
Alexander pointed to a specific concern driving this reluctance: "investors have concerns about the general election outcome and the potential for removal again of interest expense deductibility (along with a promised stronger capital gains tax regime) should there be a change of government."
Mortgage advisers are seeing the same pattern play out on their own books. Tony Alexander's companion Mortgage Advisers Survey for August found a net 30% of advisers also seeing fewer investors, unchanged for two months, while almost 80% of advisers said borrowers favour fixing for two years and bank willingness to lend has held broadly steady since June.
FOMO virtually absent from the market
Fear of missing out among buyers is now negligible, with just 6% of agents reporting it as a factor — a dramatic fall from the 90%-plus readings recorded during the 2020 pandemic boom. Alexander wrote that "there is essentially no FOMO in New Zealand's housing market" currently, a signal that buyers feel little urgency despite the ongoing pullback in prices.
Auction and open home attendance also remain soft, though both measures have shown modest improvement in recent months. With the general election set for 7 November, Alexander cautioned that any clearer read on whether the property cycle is turning may not emerge until after coalition negotiations conclude, likely delaying a genuine signal until summer.
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