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Auckland Apartment Report – August 2024

By Ila Maran

Is That Optimism In The Air ?

Economic analyst and commentator Tony Alexander, 4 July: “The chances of interest rates being cut by the Reserve Bank before Christmas keep increasing.”

In his latest agent survey Alexander reports: “Whereas a month ago only 1% of agents said buyers were displaying FOMO – fear of missing out – now 10% say that. This is still well below average but the lift is interesting.”

NZ Herald One Roof, 24 July: “Westpac has cut its mortgage rates for the second time in three weeks, undercutting its rivals in the process. The five major banks have all announced changes to their home loan rates in the past week.”

NZ Herald One-Roof, 29 July: “Households can see better times ahead. That’s likely to reflect the now-widespread expectation that the Official Cash Rate will have started to drop before the end of the year, with some mortgage rates already falling. Adding to the good news on that front, the inflation expectations measure from ANZ’s consumer confidence survey fell further in July and is now back to its lowest level since September 2020.”

Susan Edmunds of RNZ quoted Kiwibank with a longer term prediction in early July. “Economist Sabrina Delgado, Kiwibank, said while it still expected the official cash rate (OCR) to be cut in November – earlier than many other forecasts – it was next year that the full impact of a fall in interest rates would be felt. Kiwibank expected the OCR to be at 4.5% by next June, compared to 5.5% at present, and 3% by the following June.”

Kiwibank chief economist Jarrod Kerr said: “Falling interest rates would have a psychological impact on borrowers, even if they could not take advantage of them yet. Just knowing interest rates are falling is also quite important.”

Our very own Loan Market partner in our office, Jamie Maclennan comments: “In the last few weeks we have seen rates across all the major lenders reducing in line with inflation trending downwards. Not only are rates reducing, but banks’ test servicing rates are also starting to move down which potentially should help prospective buyers increase their lending amounts.” 

Director of City Realty Group, Daniel Horrobin says: “We track our open home visitor numbers religiously week to week and what those figures reflected in mid July was a sudden spike in visitor numbers when compared to the weekend prior. We can only put this down to media commentary surrounding interest rate optimism.”

“On that topic,” continues Daniel, “over the month of July we met 356 open home visitors, up 30% on June.

Michelle Moffit from Realestate.co.nz also reports positive news in her July update. “Total traffic to realestate.co.nz was up 20.9% year-on-year. Our most engaged users, on our app, increased to an all-time high, up 25.6% on June 2023, and 8.0%, when compared to the month prior.”

Daniel goes on to say: “Our sales team on the ground are reporting an increase in inquiry generally. It was heartening to see new faces in the auction room during July, hopefully another positive indicator. The recent activity is reflected on our sales board for the month which is looking the healthiest it’s been for some months.”

“It is interesting to note however,” adds Daniel, “the number of central city properties for sale on Trade Me property has remained steady, hovering around the low 600’s since March this year. Maybe the new-found optimism will give owners more confidence to come to the market, particularly as September and spring loom on the horizon.”

“In the rental space, it’s business as usual with rents having softened somewhat and properties taking a little longer to find tenants,” reports Daniel.

“In summary we remain cautiously optimistic that the property market in general, and the central city market in particular, will benefit from positive news dominating the headlines this past month.”                                                                                                                                                                                                                                                                                                                                                                               


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