Susan
Edmunds, Money Correspondent
House prices
could be set to fall again and it may be a good opportunity
for first-home buyers, the head of one of the country’s
largest mortgage broking firms says.
Economist Tony
Alexander’s latest surveys of real estate agents shows 44
percent say they feel prices are currently falling in the
area they work in. That was the worst result since
2022.
The agents reported the top three concerns of
buyers were rising interest rates, employment and then
falling house prices.
A net 51 percent of agents said
fewer people were attending open homes, which was also the
worst reading since early 2022.
Agents said they were
also receiving fewer requests for appraisals from people
thinking about listing their properties.
Squirrel
mortgage brokers chief executive David Cunningham said he
expected prices would fall in coming months because of low
consumer confidence, decent levels of new building and low
immigration.
“Days to sell have blown out, there’s
loads of stock on the market, and rents are falling. This is
most notable in Auckland and Wellington.
“But quality
homes – existing and new builds – are selling. Often when
times are gloomy is the best time to buy, especially for
first-home buyers.”
The Reserve Bank noted house
prices in its most recent financial stability report. It
said prices had been broadly flat for the past three years
and a higher number of houses for sale was keeping prices
down.
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“House prices remain around the top of our
estimated sustainable range. While this suggests the risk of
a correction is not particularly elevated, rising mortgage
rates could reduce house prices further. Growth in mortgage
lending has also been subdued.”
In their most recent
property update, ANZ’s economists said prices had been
picking up before the fuel shock.
“House prices rose
0.8 percent in the three months to March and houses were
selling a touch more quickly. However the housing market is
now facing into a set of formidable challenges.
“The
fuel price shock has weakened the outlook for economic
growth and is pushing up inflation. We see the OCR rising
three times this year, starting in July, as the RBNZ worries
about inflation pressures spreading. There is also
uncertainty from the election, including the prospect of a
potential capital gains tax.
“Given these headwinds,
we think house prices are likely to fall slightly – we
continue to pencil in a 2 percent decline over
2026.”
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