NZ house prices to rise again due to supply shortages and hopes for interest rate cuts: Reuters poll.
New Zealand house prices are expected to rise next year
Home prices in New Zealand are expected to continue rising next year due to a continued supply shortage and expectations of an interest rate cut, Reuters reported, citing a survey of real estate analysts.
The Reserve Bank of New Zealand has ended its monetary policy tightening cycle
The Reserve Bank of New Zealand (RBNZ) appears to have ended its 20-month monetary tightening cycle in May, raising the refinancing rate from around zero to 5.50%. The campaign has helped reduce the average house price by 15% from its peak in November 2021. However, this is less than predicted by most market analysts, who predicted a correction of about 20% in May after a pandemic-induced boom that drove prices up more than 40%. Now house prices have started to rise again due to rising demand facing limited supply.
New Zealand house price forecastsThe latest Reuters poll of 11 real estate market analysts, conducted between Aug. 14 and Aug. 28, expects house prices in New Zealand to fall 4.8 percent this year. This forecast decline is half as much as the 8.0% drop that was predicted in May.
The latest Reuters poll of 11 real estate market analysts, conducted between Aug. 14 and Aug. 28, expects house prices in New Zealand to fall 4.8 percent this year. This forecast decline is half as much as the 8.0% drop that was predicted in May.
Economists' views on home price growth
"It remains to be seen whether we are entering a new phase of a FOMO-style boom in the housing market, but our money is betting that we are not, or at least that it will not continue," said Miles Workman, senior economist at ANZ, referring to the "fear of missing out" that drove the market's feverish growth during the pandemic. "But as we approach 2024, we believe that rising long-term interest rates will begin to take their toll, and stagnant affordability and rising unemployment will lead to a very slow pace of home price appreciation," he added.
Refinancing rate and housing affordability forecasts
The latest Reuters poll of economists showed that the RBNZ has finished raising the refinancing rate and will leave it unchanged at 5.50 percent through early next year, cutting it to 4.50 percent by the end of the year. While lower interest rates will create some relief for homebuyers, their impact on the affordability of first-time homebuyers remains less clear.
Housing affordability and rents
In response to an additional question about housing affordability, the 11 analysts were almost evenly split, with six believing affordability will improve over the next year and five believing it will worsen. This year, 11 analysts told us average rents will either increase slightly (6) or increase significantly (4), only one person thinks they will decrease slightly. The International Monetary Fund predicts home prices may stabilize next year, but affordability will remain a problem due to high mortgage rates and a lack of supply. Potential buyers looking to rent their homes have not gotten relief either. The response to a separate question showed that all but one of the 11 analysts believe that average rents will increase either slightly (6) or significantly (4) in the remainder of 2023.
Edited by Ross Finley and Matthew Lewis.
Comment
Popular Offers
Subscribe to the newsletter from Hatamatata.ru!
Subscribe to the newsletter from Hatamatata.ru!
I agree to the processing of personal data and confidentiality rules of Hatamatata