More Kiwis planning to buy a home, expecting prices to rise

The annual Trade Me Property State of the Nation Report has given some interesting insights into the thinking of property buyers and sellers.

Trade Me found that 64.8% of survey respondents expected property prices to rise during 2024, compared to only 14.9% the year before.

The survey also found that 23% of owners intended to sell in the next year and 40% in the next two. When asked for their biggest concerns, potential vendors cited:

• Achieving their desired price = 68.3%.
• The length of the sales campaign = 37.0%.
• Market conditions = 34.8%.

Meanwhile, 27.6% of respondents said they planned to buy a home in 2024, compared to 21.6% the year before.

A total of 89.1% of respondents said they were willing to compromise to secure a home. The share of buyers willing to make specific compromises was:

• Garden/outdoor space size = 44.8%.
• Property size = 40.8%.
• Property condition = 38.7%.
• Property location = 26.1%.
• Property type = 21.4%.

What to expect from interest rates

Interest rates are likely to play a key role in the near-term performance of the property market.

Infometrics Chief Economist Brad Olsen said that when the Reserve Bank of New Zealand did start reducing interest rates, cuts were likely to be small and methodical rather than large and quick.

“Anything larger or more rapid might risk inflation flaring up again, an outcome the Reserve Bank will worry about more than overdoing the current response,” he said.

“Despite all the challenges facing the economy, inflation is trending in the right direction and interest rate relief is expected within the next year, albeit not a huge amount of relief will be forthcoming. The current economic outlook is still broadly consistent with a soft landing, with more optimism building for the future, alongside careful restraint at present.”