Despite facing significant challenges throughout the year, the New Zealand real estate market in 2024 demonstrated moments of resilience and divergence. From prestigious multi-million-dollar sales to notable fluctuations in property values and rapid market movements, the year has been dynamic for both buyers and sellers.
The year began with a wave of optimism following the late 2023 election, which briefly uplifted property values. However, this initial positivity was short-lived as rising unemployment and delayed interest rate cuts led to a renewed decline in property prices. According to CoreLogic NZ Chief Property Economist Kelvin Davidson, national property values have decreased by 5% since February, with Auckland and Wellington bearing the brunt of these declines. Conversely, Christchurch and Dunedin showcased greater resilience.
Throughout 2024, it has predominantly been a buyer’s market. An abundance of available properties provided purchasers with significant negotiating power. First-home buyers, in particular, have been active, comprising a record 27-28% of all purchases. This surge was supported by improved affordability, access to KiwiSaver withdrawals, and low-deposit lending allowances. Meanwhile, mortgaged investors faced challenges due to high interest rates and low yields, leading many to remain on the sidelines.
Auckland has continued to dominate the luxury real estate market. Herne Bay retained its position as the country’s most expensive suburb, boasting a median value of $3.36 million. The city accounted for nine out of the top ten high-value suburbs, with Saint Mary’s Bay and Remuera ranking second and third, respectively. The highest property transaction of the year was the $21.8 million sale of 84 Paritai Drive in Orakei.
While Auckland led in high-value properties, regional areas demonstrated notable growth. Blaketown in Grey recorded the highest annual median value growth at 16.7%, followed closely by Kaikoura and Cobden, both at 12.8%. Over the past five years, Cobden’s median value saw an impressive increase of 108.8%, highlighting its robust long-term growth.
The rental market also presented interesting trends. Mataura in Southland delivered the highest gross rental yield at 10.8%, based on advertised rents and property values. Wellington Central followed with a yield of 9.2%. On the other hand, Whitford in Auckland recorded the lowest rental yield at 1.2%, reflecting the subdued rental returns in high-value areas.
Market activity varied widely across the country. Parts of Southland emerged as the fastest-moving market, with properties selling within just seven days. This rapid turnover suggests strong demand and limited supply. In contrast, Waimate experienced slower market activity, with properties taking a median of 83 days to sell, highlighting regional disparities.
Certain suburbs faced significant challenges throughout the year. Auckland Central recorded a notable five-year median value decline of -9.1%, while Mataura in Gore led the annual decline rate at -10%. These figures underscore the difficulties some areas encounter in maintaining property values amid broader market fluctuations.
As 2025 approaches, there is a sense of cautious optimism for the New Zealand property market. With inflation now under control and mortgage rates falling, Davidson projects a potential 10% rise in sales volumes and a 5% increase in property values over the year. However, he warns that values will remain below the post-COVID peak due to the high number of listings.
While affordability has improved, the lingering effects of high listings and economic uncertainties suggest an uneven recovery. Rising unemployment, expected to peak mid-year, and the introduction of debt-to-income (DTI) restrictions could limit borrowing capacities. Nevertheless, lower interest rates may provide opportunities for investors, despite potential hurdles in accessing finance.
Davidson emphasises that 2025 is likely to be a year of mixed forces for the property market. Some factors will be supportive, while others will pose challenges. He concludes, “Overall, 2025 is poised to be a year of conflicting forces for the property market, with some factors more supportive, and others still challenging.”
As we move into 2025, MyMansion.co.nz remains committed to providing a platform and expert guidance to help buyers and sellers navigate the ever-evolving property landscape.
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