Buyers Rejoice: Property Prices Fall Amid Market Rebound

Topic #1:  RNZ 23rd of April - 'Pain' for property investors as renting listing levels hit decade high

Topic #2: Oneroof 23rd of April - Tony Alexander: Global trade war’s effect on house prices - the good, bad and ugly

Topic #3: RNZ 23rd of April - House sellers cut prices, March sales 'roaring back to life'

Topic #4: NZ Herald 23rd of April - Roofing Association ‘deeply concerned’ over claims of ‘reckless’ activity

Topic #5: Good Returns 22nd of April -Sitting back and taking a calm attitude

Chapters

• 0:00 Topic #5: Good Returns 22nd of April -Sitting back and taking a calm attitude
• 0:59 Topic #1: RNZ 23rd of April - 'Pain' for property investors as renting listing levels hit decade high
• 4:16 Topic #2: Oneroof 23rd of April - Tony Alexander: Global trade war’s effect on house prices - the good, bad and ugly
• 9:23 Topic #3: RNZ 23rd of April - House sellers cut prices, March sales 'roaring back to life'
• 12:25 Topic #4: NZ Herald 23rd of April - Roofing Association ‘deeply concerned’ over claims of ‘reckless’ activity

Transcript

 Hi everyone. I'm Debbie Roberts, owner and financial advisor at Property Apprentice. Join us today for the week in review, where I talk about current events for the everyday investor and home buyer. Our topics for this week. First up from   📍 RNZ on the 23rd of April. 'Pain' for property investors as renting listing levels hit a decade.

 High topic number two, from   📍 Oneroof on the 23rd of April- tony Alexander Global Trade Wars effect on house prices, the good, bad, and ugly .  Topic number three, from   📍 RNZ on the 23rd of April House sellers cut ,prices march sales roaring back to life.  Topic number four, from the   📍 New Zealand Herald on the 23rd of April, Roofing Association-

deeply concerned over claims of reckless activity  and topic number five for this week in review from  📍 Good Returns on the 22nd of April, sitting back and taking a calm attitude. 

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Topic number one for this week from RNZ on the 23rd of April. 'Pain' for property investors as renting listing levels hit a decade high. New data from Trade Me Property shows the number of homes available for rent in New Zealand has reached its highest levels since 2014 with listings up in March from 41% compared to the same month last year.

Gavin Lloyd, customer director at Trade Me Property attributed the surge to an influx of new build properties in some areas and a rise in people leaving the country, which has increased supply in the rental market. As a result, competition among  landlords has intensified, pushing down rents. Great news for tenants.

The National Median Weekly rent fell by 2.3% year-on-year in March to $635. Saving tenants approximately $15 a week or nearly $800 annually. Taranaki experienced the steepest decline with median rents down 4.8%. In an effort to attract tenants, some landlords are now offering incentives such as a week of free rent or grocery vouchers.

An approach not commonly seen in recent years. With renters spoiled for choice and costs rising, landlords are being forced to lower rents in some areas to avoid prolonged vacancies. For example, an empty $700 a week property for eight weeks results in a $5,600 loss while dropping the rent for $600 could secure a tenant faster and reduce losses.

Some people warn that the situation is worse in some areas than it appears with some investors quietly facing financial strain. Properties are also sitting on the market longer than in recent years, highlighting a shift from the previously fast paced rental environment. However, not all regions are seeing declines.

Nelson Tasman's Median weekly rent hit a record $600 a week in March, and Otago saw a 5% increase. So my thoughts on the oversupply in some areas is that this is potentially a temporary issue. It's often what we see when a, a large development or developments all come up onto the market at the same time, especially if they've been targeted towards property investors.

So property investors are all looking for tenants at the same time, at the first release of a new development. So, you know, hang in there,  offer some incentives to get a tenant in place. Things are likely to balance out over the long term. I've got no vested interest in saying this 'cause we don't sell property at At Property Apprentice.

But we also are starting to see increase in net migration as well. So, you know, population will increase development slowing down. So yeah, I think it will balance out over time. It's not surprising when we're going through an economic recession. For people to have less demand for small bedroom properties.

 We often see people bunk in together, you know, so move back into mom and dad's house or get extra flatmates in. So demand for  multiple bedroom properties often increases in economic recessions. And, uh, then things balance out again when the economy recovers. 

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Second topic for this week in review from Oneroof on the 23rd of April.

Tony Alexander -Global Trade Wars effect on house prices, the good, the bad, and the ugly. This analysis is provided by independent economist Tony Alexander. At the onset of the COVID-19 pandemic in 2020, economic forecasts proved widely inaccurate. Few could have predicted that lockdowns and border closures would coincide with a 46% surge in New Zealand house prices and only a modest rise in unemployment from 4% to a peak of 5.3%.

This misjudgment was largely due to a lack of modern experience with global pandemics, and now the world finds itself in a similarly uncharted situation. The current economic landscape is shaped by rising geopolitical tensions, a potential decoupling of the world's two largest economies, and growing instability surrounding the United States role in global finance and politics.

In such uncertain times, forecasts are highly unreliable. However, some economic trends are beginning to emerge. Number one, weaker global and domestic growth. Heightened uncertainties causing both consumers and businesses to delay spending and investment decisions. 

This trend is expected to slow economic growth worldwide. In New Zealand, the impact is compounded by ongoing supply chain disruptions, which hinder business operations in everyday life. With China and the US accounting for 27% and 13% of New Zealand's export market respectively, a slow down in these economies is likely to curb domestic growth.

Falling global share markets may also trigger a negative wealth effect, further dampening consumer confidence. Number two, inflation pressures and business strain. Higher offshore tariffs are raising the cost of producing goods in countries new Zealand imports from pushing up domestic prices. Supply chain disruptions similar to those seen during the pandemic are also likely to drive inflation higher.

Some relief may come from China, potentially redirecting goods away from the US market at discounted prices. However, the extent to that impact may be limited by logistical challenges. In addition, slower growth may temper inflation, but that creates its own risks. With many businesses already facing record low margins, the inability to pass on rising costs could accelerate business closures through 2025.

Number three, rising interest rate risks and market volatility. Share prices are under pressure from global risk factors, but a new concern has emerged political interference and the independence of the US Federal Reserve. If inflation targeting is compromise, this could destabilize US bond markets and influence interest rates globally.

Long term borrowing costs are often benchmarked against US treasury rates with uncertainty surrounding US monetary policy and the potential for China to offload some of the 10% of US bonds it holds. Upward pressure on global interest rates is becoming more likely. As the US increasingly contributes to instability in global markets and geopolitics, New Zealand home buyers and investors are advised to consider the potential implications.

In particular, caution is warranted around debt levels and the duration of fixed interest rates in this volatile environment. So it is certainly gonna be a 'let's wait and see what happens'.  And things change on the daily. At the moment,  Trump is nothing, if not unpredictable, so, we'll just a lot of the, a lot of the next few weeks is gonna be a case of wait and see how the market reacts.

 We are still expecting the New Zealand OCR to reduce over the next six months, which will certainly reduce the shorter term interest rates, long-term interest rates. Anybody's guess,  at the moment they are all pretty below average. So, you know, interest rates at the moment are looking pretty good.

Swap rates are still trending downward when we look at the daily swap rates, and that's where the wholesale interest rates come from. So, you know, potentially we are not yet at the bottom of the interest rate cycle for the long term rates, but time will tell. I wish I had a crystal ball so I could just give you guys a bit of a heads up as to what you should be doing.

But I think have a chat with your mortgage adviser if you've got interest rates coming up for re-fixing and you know, make an informed decision that you feel comfortable with. Only hindsight will have the benefit of 2020 vision and whatever you feel comfortable with today. You just have to stick with that and know that it could literally go either way.

So there's very little chance that you're gonna get it absolutely right.  But just make sure that you're making a decision that you're comfortable with based on your cash flow and potential future increases in interest rates across the board. Topic number three from RNZ on the 23rd of April, house sellers cut prices March sales roaring back to life.

Home sellers collectively reduced their asking prices by $63 million in the first quarter of this year. According to Realestate.co.nz, this compares to nearly $70 million in reductions during the same period in 2024. Although more properties were discounted this year. 1686. That's 1,686 up from 1,624 last year.

realestate.co NZ spokesperson, Vanessa Williams said sellers were becoming more realistic with initial pricing, which helped reduce the need for significant cuts later.

She noted the average asking prices had been trending downward nationally, and stock levels were at their highest in a decade. Auckland saw the largest total price drop at nearly $10 million, followed by Waikato with $7 million and Wellington at almost $6 million. In contrast Wairarapa recorded the smallest average reduction per property at $24,346 with Otago and Hawke's Bay following closely behind.

Williams said these figures, often valuable benchmarks for both buyers and sellers providing insight into negotiation room and market expectations. Meanwhile, Corelogic data revealed that property sales in March rose 11% year on year after a dip in February. Corelogic Property economist Kelvin Davidson described March as a strong comeback.

He noted that although sales had been gradually recovering over the past two years, activity slightly below normal levels. Improved confidence partly due to lower interest rates was cited as a key factor. Davidson explained that while housing values had increased slightly up 0.5% in March and 0.4% in February high, listing volumes continued to give buyers the upper hand.

He suggested a clearer market shift might not emerge until spring, summer, or even early next year. Investor interest is also growing. While first time buyer activity has eased from its recent highs. Investor participation is rising, aided by lower mortgage rates, reducing the need for top ups from other income sources.

 Davidson projected that about 10,000 additional property sales this year and a 5% increase in property values. However, with bank test rates falling debt-to-income ratios are expected to become a constraint on borrowing capacity in the future.  So my thoughts on this is that, you know, this buyers market is looking likely to hang around for a little bit longer.

So no need to rush out there and panic by plenty of opportunity. Good negotiation opportunities. Make your money when you buy and then you'll reap the rewards when the property market eventually does recover. Topic number four, from New Zealand Herald on the 23rd of April. Roofing Association deeply concerned over claims of reckless activity.

An Auckland homeowner, Ed Waaka claims that he and his family are facing a repair bill of up to $40,000 after reckless actions by roofing platform. RoofBuddy. Waaka's issues began in 2024 when he was connected through RoofBuddy with lifetime roofing for a roofing job using Kiwi seal that's a liquid membrane applied to roofs.

He says the project was marred by delays, poor communication, and subpar practices, which caused extensive water damage and the collapse of his bedroom ceiling. Waaka was aggressively pursued for a deposit and progress payments, but once those were made, he says the company was unaccountable. He claims no independent quality assessment was conducted

despite advertising it on social media, the roof continued to leak damaging additional parts of the house even with multiple coats of the product. The problem persisted and Waka is now working with his insurance company to assess what can be claimed. He no longer wants RoofBuddy involved in the repairs accusing the platform of being reckless.



He also suspects the reroofing quotes provided through the platform were inflated to make the Kiwi seal membrane appear like the best option. Since sharing his experience online Waaka says he's received messages from others who faced similar issues. Luke Boustridge CEO of the Roofing Association of New Zealand expressed concern over RoofBuddy's practices. Although RoofBuddy is not a member of the Association,

Boustridge stated that the association has received multiple complaints from concerned homeowners and professionals. He emphasized the need to regulate residential reroofing as it currently isn't covered under the licensed building practitioner scheme, leaving consumers vulnerable.. Responding to the issues RoofBuddy.

CEO James Logan explained that the platform has no influence over the pricing provided by service providers. He justified the high reroofing quote stating that the reroofing was the most suitable solution for Waaka's property. Logan confirmed that quality assessments had not been completed due to lifetime roofing's failure to meet the quoted specifications.

 Logan took responsibility for not intervening sooner and for failing to activate RoofBuddy's customer warranties earlier in the process. He's now working to resolve the issue in Waaka's favor.

Alex Anderson, director of Lifetime Roofing also took responsibility for the issues admitting that client expectations weren't met. Although the company had planned to return on April 16 for remedial work, they respected Waaka's decision to pause the work while his insurance process was ongoing. As a gesture of goodwill.

Lifetime Roofing already covered the full replacement of the ceiling in the affected room at no cost to Waaka. Anderson expressed the company's commitment to working with RoofBuddy and Waaka to reach a long-term solution and restore the family's home. 

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Topic number five, from Good Returns on the 22nd of April, sitting back and taking a calm attitude. Westpac is maintaining its forecast of a 3.25% OCR bottom, despite other economists suggesting a lower OCR. Due to New Zealand's uneven economic recovery in the impact of the US LED global trade war.

Westpac's Chief economist Kelly Eckhold advocates for a more cautious approach, acknowledging that while some are predicting a 2.5% OCR, the bank prefers a considered analysis over quick reactions. In contrast, BNZ expects the OCR to stabilize at 2.75 in August and remain at the low for an extended period while a NZ anticipates two further cuts bringing the OCR to 2.5%.

Squirrel Mortgages also sees a possibility of this drop revising their neutral OCR estimate to between 2.5 and 2.75. Eckhold points out that although the trade wars costs to New Zealand are minimal, about 0.2% of GDP, export prices have risen by 15 to 20%. He suggests that while the trade war may pose risks, the financial market's reactions may be overstated.

His preference is to take a careful, balanced approach rather than overreacting. Regarding  housing, Eckhold notes, there's no significant upward pressure on interest rates with house prices rising slowly. According to REINZ March data, the house price index increased by 0.2%, marking five months of gains. Though prices were down 0.7%, year-on-year, recent drops in wholesale interest rates were expected to lead to a modest decrease in fixed home long-term interest rates. And some banks have already reduced short-term rates to 4.99%.

Eckhold predicts that once the economic situation stabilizes fixed mortgage rates could fall further, improving affordability for first time buyers and property investors. Westpac has seen steady credit demand over the past six months, which although not indicative of a housing boom, provides supportive conditions for the market.

ASB, on the other hand, notes that despite OCR Cuts, house prices have not significantly risen, primarily due to the ongoing imbalance between  supply and demand. While supply levels continue to grow, demand remains weak due to the soft labor market and stabilizing migration. ASB expects a gradual recovery in house prices through the rest of the year with more significant changes anticipated once the labor market improves and further OCR cuts lead to lower mortgage rates.

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