National median house values across the country rose 0.3% in February – the first meaningful increase for more than a year.
Property data firm CoreLogic reported the median national value was $807,164, 16.9% from the peak in 2021 and early 2022, but 17.1% above the pre-Covid figure of $689,353 in March 2020.
CoreLogic NZ’s chief property economist Kelvin Davidson said there had been anecdotal feedback for a couple of months that things had turned but there was a lag between that and it turning into data.
With interest rates falling, it was “probably only a matter of time” until house prices started to edge up, he said.
There were still restraints on prices, such as the high level of listings on the market and tougher economic conditions.
The overall growth figure was masking local variability, which is outlined in the article.
Our view: It is fair to say that there is light at the end of the tunnel for the housing market and, although it is currently a buyers' market, as pointed out in this article it is only a matter of time until house prices start to rise, especially once the volume of existing stock starts to decrease. How big the upswing will be is yet to be determined, but there is certainly more confidence out there now that interest rates have started to decline.
Annual value of building work consented down $5.6 billion over two years (Source)
In January, the value of new building work consented continued to decline, both monthly and annually. Statistics NZ reported a total consent value of $1.772 billion for January, a drop of 12.1% compared to the previous year. In the year to the end of January, $26.662 billion of building work was consented, down 6.7% from $28.577 billion in the previous year.
There were 33,812 new residential dwellings consented in the year to January 2025, down from 36,453 in January 2024 and 49,480 in January 2023.
Barfoot & Thompson's sales numbers and median price both dropped in February as stock for sale hit a 14-year high (Source)
Barfoot & Thompson's February sales indicate a disappointing outlook for the Auckland housing market, with declines in sales numbers and median prices, along with a rise in unsold stock. The real estate agency (the biggest in Auckland) sold 685 residential properties in February, down from 700 in January but up from 633 in February last year. The median selling price fell to $930,000 from $950,000 in January, continuing a three-month decline and sitting $310,000 below its November 2021 peak.
However, the average selling price rose to $1,107,006, suggesting stronger sales at the high end of the market.
Barfoots considers it to have been a quiet month, highlighting new builds as a key contributor to the stock levels (5,997 residential properties available for sale – the highest since 2011) that were the most likely reason for February’s underwhelming sales. New listings fell by 8.1% compared to last year, contributing to a buyer’s market where many properties remain unsold.
601 residential properties auctioned, 222 sold under the hammer, sales rate 37% (Source)
Auction rooms were exceptionally busy over last week (22-28 February), with interest.co.nz monitoring 601 residential properties auctions nationally.
This was only the second time in two years that monitored auctions exceeded 600 in a week. With the peak summer selling season traditionally lasting until the end of March, this number could still increase.
Of the 601 properties offered at the latest auctions, 222 sold under the hammer – a sales rate of 37%, which has hovered around the 40% mark in recent weeks.
Of the 222 properties that sold, just over a third (34%) achieved prices equal to or above their rating valuations. There was notably strong auction activity in Auckland’s central suburbs, Manukau, Waikato and the Bay of Plenty with a flurry of activity in Queenstown dominated by the auction of sections in a subdivision.
Property investors say multi-offer situations unfair (Source)
A property investment coach has emphasised the importance of understanding rights in "multi-offer" purchase situations, Steve Goodey recounted stories from buyers who faced pressure to increase their offers under the impression they were in a multi-offer situation, only to discover the competition was minimal or non-existent. He says he has received hundreds of responses from buyers who were asked to sign forms acknowledging multi-offer scenarios, even when other offers didn’t exist. He calls for better clarity on the number of offers at play to protect buyers.
Real Estate Authority CEO Belinda Moffat acknowledged an increase in complaints about multi-offer processes during market peaks, stressing the need for fairness and transparency. She encouraged clear agency policies and informed buyers that they can withdraw their offers at any time.
Our view: This is definitely something to watch out for. However, if you engage a buyer's agent you can mitigate these issues. Our team has the experience to guide you through the buying process and ensure you aren’t overpaying when purchasing your next investment property. Get in touch if you wish to discuss this service.
Government to replace infrastructure development fees with new levy system (Source)
At the end of last week, the Minister of Housing, Hon Chris Bishop, announced the introduction of new infrastructure funding and financing tools to address the housing crisis. It includes plans to replace the way councils charge for new infrastructure developments to a new levy system.
The changes are part of the Government’s The "Going for Housing Growth" program, which Bishop announced last year, focused on three pillars:
- Freeing up land for development and removing planning barriers.
- Improving infrastructure funding to support housing growth.
- Providing incentives for communities and councils to encourage development.
Other key changes include increasing flexibility in targeted rates and enhancing the Infrastructure Funding and Financing (IFF) Act. These reforms aim to ensure that growth pays for growth, reduce costs for developers, and ultimately lower land prices, enabling a timely delivery of essential infrastructure. The government plans to engage with councils and developers as they design this new system, with legislation expected to be introduced in late 2025 and enacted by mid-2026.
You can read the full speech from Hon Chris Bishop here:
Going for Housing Growth: New and improved Infrastructure Funding and Financing | Beehive.govt.nz
Our view: This is a positive long-term play, which should benefit house hunters in the future. Cutting the red tape that made development so difficult in the past is good to see.
Australian News
Real estate: The best way to make money from the coming housing rebound (Source)
At this week’s PERE Asia Summit in Singapore, leading institutional investors revealed surprising findings about where they plan to invest in Australia.
A session on Australia, presented by panellists from Blackrock, Charter Hall, Landlease, and Macquarie, revealed 90% of those in the room intended to increase their investment in Australia this year. But they were not looking at the traditional sectors, with fewer than 10% expressing interest in retail (8%) or office or logistics (9%).
Instead, the focus was on alternative real estate sectors such as childcare and healthcare, which attracted 38% of the polling. And almost as many, 3%, intend to invest in the living sectors such as build-to-rent, build-to-sell, and student accommodation.
This positive sentiment aligns with recent trends in housing metrics, indicating an inflection point in the market. Andrew Schwartz from Qualitas noted that Australia is entering a new housing development cycle, anticipating a "super-cycle" in residential development, though he emphasized the need for price growth to make projects viable.
Property development: Apartment approvals pick up after 2½ year slump (Source)
Economists have indicated that Australia's apartment slump has bottomed out, as new data reveals a 1.5% increase in approvals for apartments, townhouses, and semi-detached homes over the past year, the first positive growth in 2.5 years.
Most of this gain came from New South Wales, driven by approvals for large apartment towers.
Factors like falling interest rates, stabilizing materials costs, and rising selling prices contributed to this turnaround. However, the housing development sector warns that Australia may fall short of its 1.2 million housing target by 400,000 homes without additional incentives and expedited planning processes.
A national housing council has also projected a likely shortfall of 300,000 homes by June 2029, necessitating the construction of 240,000 homes annually.
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From the team at Erskine Owen.
