APRIL 2023 | MARKET UPDATE

Over the past month it’s been about the impact of interest rates, immigration & inflation, and the influence they will have on the property market.  The question is ‘Has the market bottomed out?’

Well, if the best predictor of future behaviour is past behaviour, then given the data on significantly increasing immigration it is worthy to review the correlation that immigration and property prices have had in the past.

Net immigration for the year to March is now sitting at over 65,000 compared to a net loss of nearly 20,000 in the previous year…. forecasts are for this to grow to a net inflow of 100,000 people this year – this would be the fastest rate of population growth New Zealand has seen in decades.

As can be seen the increased demand for housing from immigration has in the past put upward pressure on prices.  Whilst it is generally a ‘lagged relationship’ looking forward it would be sensible to assume this rapidly growing immigration (resulting in the increased demand for housing), at a time when new supply is slowing is again likely to result in increasing property prices.

Despite subdued sales volumes in April there is undoubtedly growing momentum in the market, first home buyers are more active, they’ve been assisted by the reserve banks announcement on easing LVR restrictions.  Our auction room last week was overflowing and reports of good properties having large numbers of inspections.

So, has the market bottomed out?  We wont know until we have passed the point!  As buyers analyse if inflation & interest rates have peaked, be cautious of the impact of immigration and closely consider the current conditions, with lower prices and a reasonable volume of listings there are strong indicators that for astute buyers it is the time to act.