“ For nearly three years , the share of income needed for mortgage payments has remained in the 53-57 per cent range , highlighting the prolonged period of elevated repayment burdens on households .
“ Similarly , the rent-to-income ratio has remained persistently high , creating financial pressure for many renters , particularly those with incomes below the median . These households are likely to feel the strain even more acutely than that average figure suggests ,” he says .
Alexander adds that while mortgage rates are expected to drop further , providing some relief , the pressure on households and businesses remains significant .
OPPORTUNITIES AND CLARITY
Despite these challenges , both experts agree that 2024 could be a good time to buy property .
Davidson suggests that those who take the plunge now might look back on the year as a wise time to make a move , particularly given the 16 per cent drop in prices from the previous market peak .
“ With mortgage rates set to decline further , the potential for capital gains in the future is perhaps starting to look a little brighter , especially for first-home buyers who have been waiting for the right moment .
“ It ’ s never been easy ( to buy a home ), and there are always different challenges . But people tend to find a way .”
Alexander also sees potential in the current market , especially as buyer confidence recovers .
He notes that with more properties on the market and a lower level of competition , buyers right now have greater choice and negotiating power . However , he warns that job security and broader economic factors will continue to play a crucial role in shaping market conditions .
“ Our economy will get worse before it gets better .
“ The RBNZ forecasters see the unemployment rate hitting 5.3 per cent at the end of the year . While this is not a particularly high rate in the historical context of New Zealand ’ s labour market experience , it will help keep consumer spending suppressed until 2025 .
“ The immediate upturn in the residential real estate market is not likely to lead to an immediate similar uptick in the economy overall ,” he says .
As buyers and sellers navigate changes to the housing market to year-end , it ’ s clear that the complex landscape is replete with potential .
Seeking a balanced view of current market dynamics is not just advisable but essential , as rapid developments can swiftly alter the broader economic landscape – evidenced by last week ’ s OCR announcement and the ensuing financial market frenzy .
Our experts suggest that while the current conditions may present a strategic opportunity that could be fleeting , buyers and sellers are best served by consulting with trusted professionals to ensure they are leveraging these opportunities to their fullest advantage .
Photo : 97A Seaview Road , Remuera , Auckland Proudly marketed by Ryan Dixon , Olivia Field & Alex Smith
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