First-home buyers still lead the market as investor demand stays weak
New Zealand’s housing market is heading into summer with soft activity and falling prices, as many buyers use the general election as a reason to wait, according to the latest NZHL Property Report by independent economist Tony Alexander (pictured).
A net 36% of the 213 real estate agents surveyed at the end of October said prices were falling in their area. The measure has been negative since late February, a period in which the REINZ House Price Index has fallen 0.6%. A net 38% described conditions as a buyer’s market, in line with results since early 2024.
“It remains the case that it is the vendors who need most to adjust their expectations in order to gain a sale, not the buyers,” Alexander wrote.
He said buyers remain worried about jobs, interest rates, and the risk of capital loss.
“For now, buyers feel that time is on their side,” Alexander wrote, adding that the election was giving many a reason to hold off.
Rising interest rates and fears of falling prices were buyers’ main concerns, while worries about getting finance continued to ease. Those rate worries have some basis. The Reserve Bank of New Zealand (RBNZ) held the OCR at 2.75% on 28 October in a 4–3 vote, with all members agreeing tighter policy is likely, subject to the outlook.
Election keeps buyers cautious
Fewer people turned up to open homes, according to a net 21% of agents, compared with a net 9% a month earlier, the weakest result since late June. Only 6% of agents said buyers were showing a fear of missing out (FOMO).
Alexander said interest could pick up after the election but warned that coalition talks could run close enough to the summer break for buyers and sellers to wait until February.
ASB has also flagged that forming a government could take some time, with either major party potentially needing at least three coalition partners, though it doesn’t expect the delay to stall the economy.
First-home buyers lead, investors retreat
First-home buyers remain the main source of demand. A net 30% of agents reported seeing more of them, down from 45% in September but close to late August’s 32%.
Agents saw fewer investors, by a net 47%, in line with results since April. A record share of agents said nothing was motivating investors to buy, and those still active were mostly looking for bargains.
No listings surge in sight
The usual pre-summer lift in appraisal requests has been unusually small. A net 23% of agents reported more requests, down from 32% a month earlier, and the rise since June was well below the gains of each of the previous four years.
“There is no evidence from this measure of a surge in property listings lying just around the corner,” Alexander wrote.
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