It is time to be positive. NZ Mortgages Managing Director Nathan Miglani offers an insight into where the property market is heading this year.

As the new year dawns and we embark on 2024, we can take some confidence from the fact that the real estate market is heading in the right direction. The light is no longer at the end of the tunnel, it is within reach.

While it won’t be until quarter three or even quarter four of this year that we start to see some relief when it comes to interest rates, we know the market is going in the right direction when people start to build. For a long time in 2023, the market for sections or parcels of land on the city fringes was relatively stagnant. Prices had dropped year- on-year by $100,000 in Rolleston for example, but post-election we started to see the demand for sections grow once more. What we are seeing right now is people seeking finance to buy sections on which to build, or refinancing to renovate, aiding the momentum needed for our construction sector to bounce back.

As we know in the construction sector, we see a cycle of supply-demand- supply-demand. Looking at land prices now, I would predict a shortage of sections in Christchurch within the next 12 months, which is heartening for us all.

Looking to property trends for the first quarter of the year, it is all about those buying for a purpose: to help a child into a home for example. We are seeing very few investing in property just for the sake of it, or for a desire to become a landlord – a factor driven simply by interest rates. As these start to drop later in the year I would expect this to change.

For first home buyers the market remains steady. The most active market is within the $800,000 – $1.3 million range, driven primarily by those relocating to Canterbury from Auckland – a decision that sees their investment go further given the variance in average house prices between the two cities.

Despite the significant cost of living and high interest rates, it is important to remain optimistic about the market’s stability going forward. For those buying or investing I would still urge you to only fix for the short term as all forecasts are for a drop later in the year and you want to be in a position to take advantage of this.