New Zealand’s Housing Market – Sep 2024 Updates: High Prices and Slow Recovery

New Zealand’s residential property market continues to grapple with high prices, particularly in the Auckland region. In June 2024, the average sale price in Auckland reached approximately one million New Zealand dollars, the highest in the country. Auckland City, being the most populated city, reported an even higher average sale price of around 1.26 million New Zealand dollars.

Auckland’s Competitive Market

The residential housing market in Auckland is highly competitive, with prices steadily increasing. This trend is reflected in the annual increase in the average residential house price compared to the same period last year.

Home Financing Challenges

The rising cost of real estate has led to a surge in mortgage lending. Most residential mortgages are taken out by owner-occupier borrowers, followed by first-home buyers. The KiwiSaver HomeStart initiative allows first-home buyers to use their retirement savings for their first home purchase. However, even with a substantial deposit, many borrowers face decades of mortgage repayments.

Average residential house price in New Zealand in June 2024, by region(in 1,000 New Zealand dollars)

Slow Property Price Recovery

After a significant decline, property prices across New Zealand are showing signs of recovery, albeit slowly. House prices peaked in November 2021 and subsequently fell by 17.80% before seemingly bottoming out in May 2023. Since then, there has been a modest increase of 1.37% in house prices, as per the REINZ house price index data up to July 2024.

Conclusion

New Zealand’s housing market remains challenging, with high prices and a slow recovery. The Auckland region, in particular, faces intense competition and escalating property values. While government initiatives like KiwiSaver HomeStart offer some assistance, the dream of homeownership remains distant for many New Zealanders.