Property Market Uptick Heralds a Glimmer of Hope
The New Zealand housing market experienced a glimmer of hope in the November quarter with the November QV House Price Index revealing a modest 0.3% increase in home values nationwide. This marks the first quarterly increase since April, offering a brief respite from the downward trend. However, the overall picture remains subdued.
In this blog we dive a little deeper into the latest insights from the QV House Price Index and explore how Norfolk Mortgage Trust has delivered consistent returns for our investors throughout what has been a challenging year.
A Market in Transition
Despite the recent uptick, values are still 0.7% lower than a year ago and a significant 14.6% below the peak reached three years ago. While cities like Auckland, Hamilton, and Christchurch saw modest gains, the market continues to grapple with challenges such as high interest rates, rising living costs, and a slowing economy.
Key insights from the report include:
- Urban stability: Auckland (+0.5%), Hamilton (+1.2%), and Christchurch (+0.3%) are experiencing gradual increases in home values.
- Regional Growth: Smaller regions like Northland (+1.1%) and Nelson (+0.2%) are also seeing pockets of positive momentum.
- Investor Re-entry: Lower interest rates are reigniting investor interest, with more activity in auction rooms and open homes nationwide.
Despite these improvements, challenges like high inventory levels and economic uncertainty persist. Buyers and investors remain cautious but optimistic, anticipating further interest rate cuts in 2025.
What Does This Mean for Buyers and Sellers?
For buyers, the current market presents opportunities to negotiate favorable deals, particularly in areas where prices are still softening. As QV’s spokesperson noted, “Buyers are taking their time, exploring their options, and waiting for the right moment to act.” This patience is a marked shift from the urgency seen during the boom years.
For sellers, the emphasis remains on setting realistic expectations. Properties that are well-presented and competitively priced continue to attract interest. “Vendors willing to meet the market are achieving results, albeit at adjusted price levels,” another QV expert highlighted.
Looking Ahead: Cautious Optimism
The market is cautiously optimistic about potential growth in 2025 as interest rates are expected to decline further. However, any growth is likely to be moderate. The significant supply of homes for sale will continue to exert downward pressure on prices, and buyers remain cautious.
Stay Ahead of the Market with Norfolk Mortgage Trust
At Norfolk Mortgage Trust (NMT), we understand the complexities of this landscape and offer a trusted platform for your investment journey.
With decades of expertise, a commitment to transparency, and data-driven decision-making, we offer a way for you to invest with confidence in today’s shifting market.
- Conservative and Secure Lending Practices
Protecting your investment is at the heart of what we do. Every loan is backed by a first registered mortgage, giving us the priority claim on real estate collateral in the unlikely event of default.
- Strength Through Diversification
A well-rounded portfolio is key to resilience. We invest across various property types and locations throughout New Zealand, reducing the impact of regional fluctuations. This diversification strengthens our ability to maintain consistent returns, taking into account market conditions.
- Built-In Safeguards: Low Loan-to-Value Ratios
We maintain conservative loan-to-value ratios, providing a robust equity buffer that helps safeguard investments even during market downturns. The loan to value ratio is updated monthly and is transparently available on our website, reflecting our commitment to keeping you informed.
- Proven Results Over Time
The numbers don’t lie – and ours tell a compelling story. With a pre-tax rate of 7.50% p.a. (from 30 May to 30th November 2024), our track record speaks for itself.*
*annualised pre-tax distribution rate, **Past performance is not indicative of future performance.
Whether you’re exploring property investment for the first time or looking to diversify your portfolio, Norfolk Mortgage Trust is here to help you every step of the way.
Invest with confidence. Invest with Norfolk Mortgage Trust.
Watch our short video to learn more about how the Trust works and what you can expect from your investment.
For more information and the opportunity to discuss Norfolk’s approach to lending contact Norfolk Mortgage Trust today.
Data Source: QV House Price Index for November 24