What are our predictions for the 2024 property market?

What a difference a year makes. A cautious optimism has returned to the property market.

Listing volumes in the month of February were the highest of any month since 2019, up a whopping 45% on 2023.
February's Trade Me Property Price Index showed a 0.7% lift in national asking prices, the first time it has seen a lift in over 12 months.
- The report showed that demand was also up 14% on the previous year.
The Trade Me Property State of the Nation Report showed that property owners with the intention to sell has lifted from 21% in 2023 to 27% in 2024.
- 64% of the survey respondents also felt that house prices were going to rise in 2024, up from 14% of survey respondents who felt the same way in 2023.

This optimism clearly runs against the current mood around Aotearoa in regards to the economy. Only 15% of respondents in our State of the Nation report feel confident about the economy. This view has no doubt been reinforced by the recent announcement that we are officially in recession.

So does this show the NZ property market is back?

Well yes and no.

Let's look at the recovery and the shape of it. In Trade Me Property’s latest State of the Nation Report, we modelled the so-called 2022 bubble against the 2008 GFC (Great Financial Crisis) recovery. It's still early but indications show that when it comes to price recovery, 2022 is tracking ahead of the 2008 recovery. However, this is where we need a degree of caution around expectations for asking prices bouncing back to the 2022 peak.

Affordability is still the New Zealand property market's biggest challenge - finance remains expensive and hard to get. There is confidence that this will ease later in the year with a predicted cut to the OCR but these changes will be slow and won't mirror the rapid increases we saw on the way up. So interest rates will continue to keep a lid on price growth.

So what does this mean for property sellers?

Competition in the property market is fierce at the moment due to the surge of new listings that hit Trade Me Property in February and March. Heading into autumn and winter we expect this competition to slow, providing prospective vendors an opportunity to really stand out. Demand should continue to be above what we saw in 2023 so motivated and realistic sellers should be confident in getting a sale. Further out, should the predicted OCR cuts come true this will only further lighten the mood of buyers and in some cases provide that final push to transact during the busy spring period.

How should property buyers approach the remainder of this year?

Now remains a great time to purchase a property. If price growth remains subdued 2024 will provide opportunities to find that next home before any price growth picks up pace. This is particularly true for ‘First Home Buyers.’ Whilst the cost of finance will continue to be a barrier to investors the interest deductibility changes in April will help offset some of these costs. This is not a bad thing for the supply challenges the rental market currently faces.

My advice to both buyers and sellers in the NZ property market in 2024 is to set up saved searches on Trade Me Property in areas that you are looking to either purchase or sell. Get a feel for your potential competition or the type of property you might purchase. Then ensure you engage with a local real estate agent - they are the best source of local information.

Author

Gavin Lloyd

Sales Director, Property - trademe.co.nz

Gavin Lloyd is a seasoned professional in sales and business development, driven by a passion for creating high performing teams and achieving growth. With over a decade of experience in the property industry, Gavin consistently showcases his expertise in crafting and executing strategic plans that yield tangible results. His extensive background in the online space, affords him an in depth perspective on this ever-evolving business landscape.

Gavin actively engages in the real estate sector, leveraging his profound insights through presentations and active participation in roadshow events. Gavin is also a regular contributor in news spots and radio broadcasts. As the Director of Sales at Trade Me Property, he continues to evolve and adapt alongside his team, ensuring that the information and value they offer remain pertinent, supportive, and instrumental in driving positive change.