Property coach Steve Goodey says the market has "most definitely" bottomed out. File photo. Photo: RNZ / 123rf
Property coach Steve Goodey says the time is right to buy a house - but not everyone is as convinced.
Goodey asked his social media followers this week what they were waiting for.
"I can get 5.59 percent for three years even if the floating rate is still in the 8s.
"Auckland house prices are by average now under $1 million for the first time since 2020… Mortgage brokers round the country are recording a massive upswing in activity with investors and first-home buyers alike getting pre-approvals.
"Daylight saving has started giving agents more sunlight and evening open homes. So what indicator or metric are you waiting for to get stuck in? Will you wait for two more OCR reductions?
"Will you wait for the average price to exceed the old peak of two years ago?
"I'm actually interested to know what reason people have for not feeling like this is the bottom of the market and good times are ahead."
He told RNZ the market had "most definitely" bottomed out.
"I think if someone wanted to be perfectly counter-cyclical and wanted to time it perfectly for growth and gains and cashflow and the rest of it now is a really good time.
"A few years ago interest rates were 3 percent but yields were low because everyone was buying left right and centre. Now it could possibly be the exact opposite, inters rates are high but coming down and people can expect 7 or 8 percent returns.
"If you pick up an 7 or 8 percent return based on borrowing at 6.5 percent or 7 percent and interest rates go to 5 percent, it could start to look really good later on in the year.
"Now is a great time to get in because the average taxi driver or uber driver is not talking about the latest house he bought. Once he is, it's too late, you've missed it."
He said the recovery of house prices could be slower in some areas where there had been a lot of building.
"In certain locations there's an oversupply - townhouses in Lower Hutt, Christchurch, South Auckland - there's certainly no shortage."
But he said banks seemed to be willing to lend and everything was "pointing in the right direction". "Most people won't realise it till it's passed."
Corelogic chief property economist Kelvin Davidson said much of what Goodey said was accurate.
"While I agree we're probably close to the bottom, it doesn't mean a new boom suddenly starts - or at least anything over and above the normal spring effects we'll see in the next few months.
"Even though rates are falling, so too is employment, and that's a big handbrake."
Henry Russell, an economist at ANZ, agreed rising unemployment would weigh on people's confidence to borrow and invest. "The labour market holds the key."
He said the impact of much of the expected fall in the official cash rate had already been priced in to home loan rates and slowing migration would mean less pressure on prices, he said.
Russell said ANZ's forecast was that the housing market was nearing the bottom. Prices should stabilise around the turn of the year and grow about 4.5 percent over next year, he said.
"That's fairly modest relative to other forecasters, some banks are calling a 10 percent increase next year."
But he said housing was still unaffordable, with a house price-to-income ratio of about six across the country. "That's around the level of the second half of last decade and we weren't talking about house prices being affordable at that point."
Debt-to-income ratios could also limit future price growth, he said.
Russell said there had been an increasing in the number of people applying for home loan preapprovals. "There's a difference between getting preapproval and actually buying a house."
But he said many of the structural drivers in the market had not changed and the country was still not building enough houses overall. "As a a result, the long term upward trend in house prices should be maintained."
There were also "animal spirits" that drove the market, he said, and if sentiment like Goodey's was widespread, that could mean a stronger bounce.
Mortgage broker Glen Mcleod said it would be a stretch to say the market was "flat out", although banks were struggling to get approvals through.
"Looking at my calendar I have a only one free appointment slot this week and next week is not yet fully booked. When I am fully booked two weeks in advance, then it's flat out."