State of the Investor Nation

57% of Kiwis surveyed in our State of the Investor Nation report remain confident in the domestic property market - despite an increasing groundswell suggesting that the New Zealand housing market is beginning to plateau.

Strictly speaking, the Auckland area has seen the average house value decline -1.5% if you compare QV’s house value data between March 2018 and 2019, but this decline has been fuelled by some areas across Auckland declining by up to 4.1% during the same period. At the same time, outside of Auckland, there are few signs of a cooling property market so it’s no surprise a large swathe of Kiwis remain confident in house prices.

Our State of the Investor Nation report also found:

  • 91% believe house prices will continue to rise in Wellington
  • 83% believe house prices will continue to rise in regional New Zealand
  • 77% believe house prices will continue to rise in Christchurch/Canterbury
  • 72% believe house prices will continue to rise in Auckland

Younger New Zealanders (45%), lower-income earners (48%) and renters (54%) are more likely to think that it is not a good time for people to buy their first house.

It’s unsurprising to find that Wellingtonians are most confident that house prices will continue to grow in their region, as QV data indicates the Wellington area has seen the average house value grow 53.7% between March 2015 and 2019.

Confidence in Christchurch and the Canterbury and regions doesn’t seem out of place either as there has also been an upward trend in the average house value in these areas, albeit a little slower in Christchurch, while low-interest rates and increased competition between lenders to offer the lowest interest rates have become hallmarks of the market.

Given the steady rise in property prices, it’s easy to see why Kiwis’ love affair with investing in property has continued to flourish, and property continues to remain the prime investment focus and wealth indicator for many New Zealanders.

Is the ‘quarter acre’ Kiwi dream over?

Although some Kiwis will have benefited from investing in property in recent years, the survey showed people aged 18-34 (45%), those earning less than $70,000 a year (48%) and those renting (54%) were more likely to think it was not a good time to buy their first home.

People in these groups are more likely to live paycheck to paycheck, with very little – if anything – left over to save. Add the fact that average asking prices are at all-time highs, it appears people may be starting to give up on the much sought after quarter-acre dream.

Despite that, history tells us markets can and do correct, so the cooling of activity in places like Auckland will be seen as a positive by those waiting for the right time to get on the property ladder.

This information is provided in a general nature only and should not be construed as or relied on as financial advice. This is not a recommendation to invest in a particular financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any investment decisions.

Past performance is not a reliable indicator of future performance. The value of your investment may go up and down.