Property prices lifted by 1.3 percent on average nationally in the January quarter, although they are still lower than a year earlier. Photo: RNZ
New Zealand's housing market may be experiencing a "pre-wave" of activity as investors dip their toes back in, property research firm QV says.
It has released its latest data, which shows prices lifted by 1.3 percent on average nationally in the January quarter, although they are still lower than a year earlier.
"On the surface, we're seeing a continuation in 2025 of the overwhelmingly flat theme that we saw throughout much of last year. This is to be expected, given the economic factors at play - namely high interest rates and credit constraints, sustained weakness in the labour market, and an oversupply of properties available for sale," said spokesperson James Wilson.
But he said there were fewer cases where values were falling, and lower mortgage rates and an improvement in sales numbers could mean more price growth to come.
Whangarei, Hastings and Queenstown were the only centres that had values drop in the January quarter.
Auckland's were up 1.4 percent, Hamilton's 2.3 percent, Tauranga 1.4 percent, Napier 2.9 percent, Dunedin 2.3 percent and Invercargill 3.8 percent.
Wilson said increasing bank competition around interest rates could be driving a mindset change for buyers, although many were still cautious.
He said investors had not "dived" back into the market, but their share had increased a bit.
"Our prediction is we don't get a magic surge of here we go again or we're back to the races but we think we'll see more of what we're seeing now, main urban centres, especially the central rings of those, the desirable locations, are starting to see more and more mum and dads take an interest."
People who had waited a few years but still had strong employment might be thinking they should make a move before things took off again, he said.
"A pre-wave - we're hearing and seeing that now. If we look at the main urban centres, the concentric ring theory, we are beginning to hear stories of constrained supply within the leafier suburbs. Not spikes of demand but interest levels creeping up. I think we'll see more of that."
He said what happened with unemployment was likely to be a driver of the property market through the rest of the year.
"We might get more activity as we approach the last calendar quarter of the year."
Wilson said there was likely to be most pick-up initially in the urban centres of the North Island, such as Tauranga and Whangarei.
"Whangarei is usually later to take off in a phase and slower to come down but it has been slow for a while."
Auckland was a location made up of many different markets, he said.
The new build sector was very slow but there was more activity in existing stock.
"Summer is traditionally the peak season for buying and selling, so it's unsurprising to see more buyers and sellers in the market, especially as economic circumstances improve. What will be interesting to see is how long it takes for this excess stock to be absorbed, because that's when we will see demand start to push prices up in a more substantial way. Once again, this will not happen overnight, but further interest rate reductions will certainly quicken the process."
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