INVESTOR BEHAVIOUR
Greater expectations for a cut to the OCR are partly in response to recently plummeting business confidence and firms reporting reduced trading activity and hiring intentions . This volatility across the business environment can potentially bring investors back to bricks-and-mortar investments , like residential property , which has a long-term demonstrated history of capital appreciation .
A portfolio realignment could drive additional demand for residential investment properties , particularly given the recent reduction in deposit requirements and enhanced tenant obligations under tenancy law reforms .
Recent law changes support New Zealand ’ s residential investment sector , with the restoration of interest deductibility and wider termination rights for landlords set to increase demand amongst investors in the near term . The anticipated rise in investor activity may bring forward purchasing decisions for other buyers , such as first-time purchasers .
FALLING INFLATION
During its May OCR announcement , the RBNZ noted the expectation that inflation would fall back within the one-to-three per cent target band by the year ’ s final quarter . However , at its most recent MPS , the central bank suggested this may occur sooner than expected in H2 2024 , which is a small but meaningful adjustment for market pricing .
REGULATORY REFORMS AND THEIR IMPLICATIONS
The introduction of Debt-to-Income ( DTI ) rules , accompanied by adjustments in Loan-to-Value Ratio ( LVR ) requirements and reductions in the Brightline Test ( BLT ) period , are reshaping market dynamics .
These reforms and the Government ’ s comprehensive deregulation of urban housing markets are poised to influence pricing and supply levels over the coming years . For sellers , these changes present a timely opportunity to capitalise on current market conditions before the predicted shifts in housing affordability and investment incentives take hold .
As the national property market navigates a period of significant economic adjustment and regulatory change , the current landscape presents a strategic window for homeowners to consider selling .
With resilient pricing , increasing buyer confidence fuelled by the anticipation of OCR cuts , and supportive regulatory reforms enhancing market dynamics , now is a favourable time to evaluate selling opportunities .
Whether upgrading , downsizing , or capitalising on investment potential , sellers stand to benefit from seizing current market momentum and potentially achieving some of the best results we have seen in several months .
Lower inflation rates have the potential to stabilise the residential market and improve purchasing power , making it a more attractive time for buyers to act . Homeowners are expected to take advantage of this dynamic over the next few months , particularly in the near term when sentiment is most optimistic .
Photo : 36 Rue D ’ Amarres , Gulf Harbour , Rodney Proudly marketed by Ross Hawkins , Ray White Epsom
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