Why more owner-occupiers will soon be on the move

One of New Zealand’s leading property economists has forecast an increase in owner-occupiers moving home in the coming year, due to an unusual combination of rising buyer confidence, rebounding prices and higher interest rates.

CoreLogic NZ Chief Property Economist Kelvin Davidson said activity among ‘movers’ was unusually low right now: in the second quarter of 2023, they accounted for 26% of property purchases, compared to the long-run average of 29%.

He attributed this to five main factors:

1. Movers have been reluctant to relocate when they weren't sure how long it would take to sell their own house and what price they would get.
2. Movers have struggled to get bridging finance, so fewer of them have had the option to buy before they sell.
3. Some households have wanted to avoid making a new loan application, given the income and spending checks this would involve.
4. There have been relatively few new listings on the market, making it harder for movers to find their dream home.
5. The increase in alterations and additions activity suggests some owners have decided to renovate rather than relocate.

Why upsizer and downsizer activity is set to increase

Mr Davidson predicted that a combination of factors would lead to an increase in the mover share of the market over the coming quarters.

To begin with, an increase in buyer confidence would prompt more people to relocate.

That, in turn, would help the flow of new listings to market, making it easier for owner-occupiers to find somewhere to live.

Meanwhile, upsizers and downsizers would be influenced by rebounding prices and higher interest rates, respectively, according to Mr Davidson.

“In the case of upsizing, this may be due to some households looking to get that bigger property before any medium-term growth in house prices pushes it out of reach again,” he said.

“Meanwhile, downsizing could be a form of protection against mortgage stress as households that are struggling with higher repayments after repricing look to trade down and ease the strain before there’s any risk of a forced/mortgagee sale."

I can compare home loans for you to help you upsize to a bigger property. Also, if you want to buy before you sell, I can help you secure bridging finance. Contact me to discuss your options.