Which initiated our booming prices 3 years ago. Prices have fallen back a little but saying they have dropped is not correct IMHO. I saw the panic with first home buyers beginning from a very dead market because I was buying just as the boom was starting and I have been trying to help friends buy over the last three years.
> If NZ is any future omen for what will happen next in Australia, then the fact NZ peaked and then retraced somewhat over the past 2 years
I wouldn't say that is what happened.
There was very little stock on the market in Christchurch a few months ago and numbers of houses sold per month deeply dropped - so market price was set by very few sales.
Property prices are back on the way up again - the market turned a few months ago I feel (I was trying to invest again so I was watching my market carefully).
It is actually difficult comparing the two countries because factors vary so much.
Above opinions are based on what I saw in Christchurch.
Based upon trends, the NZ property price market did peak then undergo a significant (roughly half) retrace.
+41% over 19 months, then -20% over the next 16 months, taking us to mid-2023. The main trend-change vertices I am referencing (see the source's graph) :
While the retrace has levelled off since then, and even shown signs of a slight bounce back, I think we should avoid assuming that the previous uptrend will simply resume, with anything like the strength it had during the Covid FOMO period. It just isn't viable, too much economic squeeze from other directions (read: 'ain't nobody got money for dat shit').
Christchurch property prices peaked in February 2022. Prices are currently 7.28% below the peak (REINZ, October 2023)
Property prices appear to have bottomed out in June 2023. That was 10.7% down from the peak
I guess that I am talking about the leading indicators that I read when I am in the market, versus the lagging statistical figures. Also sentiment matters - at the "low" a few months ago there were very few transactions and auction room was very very quiet.
There are now adverts for 5% down mortgages. And I feel we have lost the doom sentiment that existed a few months back.
Also I believe that using "peak" for any price comparison or analysis will usually mislead (shares and crypto too).
I agree that terms like peak and bottoming-out can mislead casual readers, because the future market can easily disprove both assumptions. Thankfully, we are not casual readers, or a source of financial advice, and may speak freely among ourselves here at HN. (however, for avoidance of doubt, readers, "peak" and "bottom" are colloquial terms for potentially-ephemeral changes in a markets direction)
In my opinion - and this is firmly a subjective opinion, upon which nobody should act - the NZ housing market will stay relatively flat for the time-being. Sentiment is ok, but affordability is still at the edge. Should mortgage rates drop significantly, then the price-go-up-party can continue, but there is little reason to think we're going to see 2-3% fixed rates anytime soon, i.e. the next 5+ years, and therefore the macro economic conditions to support significant price uplifts may not be there. There's nothing to suggest that NZs average wage will proportionally increase (except by the usual inflation, and modest annual growth) in the foreseeable future.
And the modest ongoing demand resurgence may well (or not!) prevent further drops. Hence perhaps keeping the market relatively stable for awhile, after the partial retracement we had.
Which initiated our booming prices 3 years ago. Prices have fallen back a little but saying they have dropped is not correct IMHO. I saw the panic with first home buyers beginning from a very dead market because I was buying just as the boom was starting and I have been trying to help friends buy over the last three years.
> If NZ is any future omen for what will happen next in Australia, then the fact NZ peaked and then retraced somewhat over the past 2 years
I wouldn't say that is what happened.
There was very little stock on the market in Christchurch a few months ago and numbers of houses sold per month deeply dropped - so market price was set by very few sales.
Property prices are back on the way up again - the market turned a few months ago I feel (I was trying to invest again so I was watching my market carefully).
It is actually difficult comparing the two countries because factors vary so much.
Above opinions are based on what I saw in Christchurch.