Monthly Report for June 2024

09/07/2024 11:01:24 Comment(s) By Pracca




Due to weaker-than-expected data in the New Zealand real estate market in May, ANZ has revised down their forecast for this year's house price growth to 1%, from the previous expectation of 3%. After seasonal adjustments, the REINZ House Price Index decreased by 0.4% in May, with major city prices showing slight declines (0.1% in Auckland, Canterbury, and Wellington).

Increasing inventory indicates continued downward pressure on house prices. Sales-to-listings ratios reflect subdued market activity, although Auckland appears to have bottomed out recently. Housing supply remains a critical factor, with building permits showing stability after a previous steady decline.

The unemployment rate is expected to peak at 5.5% by the end of 2025, which poses challenges to housing affordability. Although migration continues to have a positive impact on the market, its influence is gradually waning.

Interest rates have remained relatively stable, with Westpac finally aligning its rates with other banks. The Official Cash Rate (OCR) remains at 5.50%, with economists predicting the Reserve Bank may begin cutting OCR rates from February next year, earlier than previously forecasted.

In July, new policies including the Debt-to-Income ratio (DTI) rules, a reduction of the bright-line test to two years, and a decrease in investment property deposit requirements to 30% (from 35%) come into effect. We will continue to update you on the impact of these new policies on the housing market.


Property market outlook


ANZ adjusted their forecast of a 1% increase in house prices this year. The balance of upside and downside risks is now more aligned. ANZ previously forecasted a 3% increase. This adjustment reflects weaker data in May and the assumption that house prices will remain flat over the next few months before gradually rising towards the end of the year.

For 2025, ANZ forecasts a 4% year-on-year increase (down from 5%) and maintains the previous forecast of a 5% increase for 2026.

According to ANZ's seasonally adjusted data, the REINZ house price index declined by 0.4% month-on-month in May. Price declines in major cities were relatively minor, with Auckland, Canterbury, and Wellington all seeing a 0.1% decrease month-on-month. Despite lower sales in May compared to historical averages, they were higher than the same months in 2022 or 2023.

Inventories continue to increase, indicating ongoing downward pressure on prices in the coming months. The sales-to-listings ratio remains a crucial indicator of housing market activity, reflecting both supply (new listings and inventories) and demand (sales). Barfoot and Thompson data for Auckland suggests the market bottomed out in recent months and is starting to rise again. Overall, however, the indicator remains at a subdued level.

The increase in the number of days it takes to sell a house also reflects the current state of the housing market, which remains on the "loose" side, although improving compared to the past. Based on a three-month moving average, it took an average of 2.7 days longer to sell a house in May compared to historical averages. In Auckland, this figure was 6.9 days longer than average, 0.7 days longer in Wellington, and 2.8 days quicker in Canterbury, indicating greater resilience in Canterbury due to population growth.

Housing Supply:

The total number of building consents issued has steadily declined but recently shows signs of stabilization. This trend is crucial if we hope to accommodate all these new migrants.

Rising Unemployment:

The unemployment rate is expected to peak at 5.5% by late 2025. In an environment of rising unemployment, job security may deter potential homebuyers, and potentially forcing some to sell their homes.

Net Migration:

Population growth supports the housing market, although this support is weakening. Current migration trends have less significant impacts on house prices compared to earlier periods due to policy changes and the composition of migrants. It's also worth noting that exporting higher-income workers could have a negative impact on house prices, despite positive net migration numbers.

Policy Changes:

The reduction of the Bright Line Test to 2 years will take effect in July, suggesting a potential increase in listings in the spring. Banks have also reduced the deposit requirement for investment property purchases from 35% to 30%, although high interest rates limit the stimulus this could provide to the market. Debt-to-income (DTI) limits are unlikely to become a significant constraint until interest rates decrease.

Overall, the housing market remains orderly, with stable but low sales, plenty choices for buyers, and sellers adjusting expectations to meet buyer demand. Current market conditions have not significantly worsened housing affordability and are not hindering potential OCR cuts.

Interest Rates Outlook


The mortgage rates in June remained unchanged compared to last month. While on the last working day of June, Westpac finally dropped their interest rates to align with the other banks. The OCR (Official Cash Rate) has also held steady at 5.50% since May last year. While the Reserve Bank's expectation is to lower the OCR from August next year, most economists now predict the OCR cuts to begin from February next year. This is earlier than what was forecasted a month ago. The earlier rate cuts are certainly good news for borrowers in terms of reducing interest expenses. The reason for these earlier cuts is the weaker economy, with hopes that lower interest rates may stimulate the economy to some extent. While there are no guarantees, there is growing confidence that the peak in mortgage rates has passed, and they are expected to decline over the next few quarters. Currently, borrowers are choosing to fix their home loans for six months or one year.

In July, several new policies (DTI, clear-line rule, LVR ratios) will come into effect, and we will continue to update you on the subsequent effects and trends.








七月份,DTI (收入负债比例)新政开始施行,明线法则降为两年,投资房首付比例调整为30% (之前为35%)。我们会继续向您更新新政策对房市及贷款的影响。







库存继续增加,这表明房价的下行压力将在未来一段时间内持续。销售与挂牌房源比率是住房市场热度的一个重要指标,因为它反映了供应(新挂牌和库存)和需求(销售)的双重影响。根据Barfoot and Thompson的销售与挂牌数据, 奥克兰市场在过去几个月已经触底,并开始再次上升。总体来看,目前这个指标仍处于低迷水平。










银行在介绍DTI (收入负债比例) 限制的同时也相继降低了购买投资房的首付比例从35% 到30%。由于目前利息较高,降低首付比例并不会带给市场很大刺激,而DTI也只会在利息降低之后成为实质性的约束因素。





抵押贷款利率在六月份与上个月相比基本保持不变。但在六月的最后一个工作日,Westpac终于降低了他们的利息,向其他银行看齐。OCR(Official cash rate)也保持在去年五月以来的5.50%水平。尽管央行的预期是明年八月降低OC,但目前大部分经济学家预测央行将从明年二月开始降低OCR。这比一个月前大家的预测提前了。较早的利率削减对于贷款人在利息支出方面是个好消息。 不过较早削减的原因其实是经济疲软,希望利息的降低能在一定程度上刺激经济。虽然没有100%的保证,但人们越来越有信心认为抵押贷款利率的高峰已经过去,未来几个季度将会下降。目前大部分客人还是选择六个月或者一年期利率。



Source: ANZ property Focus June 2024