It’s been a good start to 2024 for the property market, and the overall sentiment remains positive with a record number of listings in February, and it is a great time to buy.
Interest rates, property values, immigration, and a new property cycle - here are our top 5 insights and predictions for 2024 to help you get ahead of the market.
As Kiwis have returned from their summer break there has been a notable increase in listings, indicating a promising outlook for the year ahead. Professionals Offices across the country have high stock levels, and vendors are motivated and eager to sell. With this in play, it is a great time to buy. Here are our thoughts on what lies ahead for the property market in 2024.
1. Mortgage rates drop in August (ish). As the Reserve Bank remains wary of inflation, which currently exceeds its mandated range of 1-3%, economists anticipate a drop in the Official Cash Rate (OCR), mid to late 2024, likely around August. It is our thoughts that when the Reserve Bank Governor does this, it may be sudden and without much warning to maximise the deflationary impact of its current high level.
2. Property values are expected to stay stable. History shows that the one-year interest rate plays a pivotal role in driving the property market and the sweet spot for increased activity and growth in value sits under 6%. Currently hovering at 7.2%, affordability remains a challenge for buyers, limiting their ability to borrow for their dream home. Consequently, the market is expected to remain stable in 2024, and property values stay stable until a decrease in mortgage rates occurs.
3. Increased activity from immigrants. The country saw record high in immigration numbers in 2023 and this will have a flow on affect into the property market over the coming years. This influx places added strain on rental accommodations as new immigrants settle in the country. We know from experience that it typically takes immigrants one to three years to establish themselves and buy property. These new New Zealander's are likely to show activity in mid-priced properties, stimulating demand.
4. Consider new homes and properties off the plans. The New Build market is expected to flourish in 2025. With experienced building companies buying sections through Professionals in recent months at reduced rates, they are building stock to take to market in the next 12-18 months. However, with building companies having fewer builds in progress, now could be one of the best times to build new. Despite media reports of some building companies closing up shop, many reputable builders are still active and foresee renewed activity in the new build market from 2025 onwards. Now is the time to explore new build opportunities.
5. The property cycle is entering a new phase of growth. Historical trends suggest that as mortgage rates decline, property prices and values tend to increase. Currently, prices are stable but are likely to be at the lowest they will be for the next 5 - 7 years. Therefore, if you're considering upgrading your home or buying your first home, now could be the best opportunity for some time.
Shaun Taylor, CEO of Professionals comments on the market "I'm really excited for 2024, we have had the biggest month of listings in a number of years, our agents are busy, and the vibe at our open homes is good. The market is going to start to warm up as we move into the new growth cycle. If you buy in 2024, I have no doubt that in the years to come you will be able to look back and say you bought at the right time".
If you are thinking of selling, use our e-valuation tool to get a guide to the value of your property or contact your local Professionals office for a free market appraisal, they are the best in the business.
