MOVING FORWARD
Looking ahead , the housing policy backdrop is expected to somewhat moderate soft economic drivers , with a return to two years ( from 10 ) for the Bright-line Test and the reinstatement of interest deductibility positively impacting housing demand .
At the same time , analysts anticipate that proposed debt-to-income ( DTI ) thresholds , potentially capping borrowing at six or seven times an individual ’ s income , alongside marginally relaxed Loan-to-Value Ratios ( LVRs ), will further boost housing demand in the near term .
These policy levers have the potential to accelerate housing demand at a time when the gap between real housing supply and actual demand continues to grow .
Despite February recording a bounce in residential building consents , construction activity continues to slow , and forecasters predict consent numbers may slip below 36,000 annually in 2024 for the first time in five years .
With an estimated housing deficit of around 30,000 dwellings and still-strong population growth , it ’ s a simple recipe for value growth and heightened competition . However , affordability is being kept in check as borrowers face significant increases in interest costs . While this comes off record lows and only brings debt servicing costs as a share of borrowers ’ disposable incomes back around pre-pandemic averages , it underscores the delicate balance between market demand and financial strain .
These challenges can either accelerate or slow residential decision-making . Recent data reveals minimal intra-region migration into Auckland over the past 12 months . However , affordability constraints in our largest city have served as an advantage for regional New Zealand , which is drawing a productive workingage population seeking more affordable housing and preferable lifestyle conditions .
All this spells opportunity for buyers and sellers , as the fundamental need to buy and sell real estate – whether owing to a move across the ditch or rightsizing to something more suited to a new lifestyle – persists whatever the climate .
Understanding the delicate balance of market dynamics is complex . Still , one aspect remains evident : buyers and sellers are well-positioned to leverage current market openings , creating a timely opportunity for our dedicated teams nationwide to showcase options for Kiwis seeking their next home or investment .
If you wish to learn more about current opportunities in the market today or about our Ray White service offerings , we would love to hear from you .
Photo : 39 Maungakiekie Avenue , Greenlane Proudly marketed by Dean Tuffley , Ray White Mt Eden
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