File photo. Photo: RNZ / Nate McKinnon
The past year has been one of two halves for the housing market.
Property research firm CoreLogic said the first half was one of declining sale volumes and house prices, before the market found a floor halfway through the year.
Sale volumes hit the lowest level in about 40 years in April, with a 12-month moving total of just 60,475 sales, while national property values fell 5 percent over the year earlier
"The New Year will likely kick off positively in terms of mood, with a new property-friendly government looking to shorten the brightline test back to two years and steadily reinstate full mortgage interest deductibility," CoreLogic chief property economist Kelvin Davidson said.
He said investors may also return to the market in greater numbers as the housing market moves into its next phase.
"This could start to pull some investment demand back into the market, and may see some existing investors find themselves off the hook for capital gains tax sooner than expected.
"But even if some investors do start to buy again, it's not likely to be a torrent, due to low rental yields and high mortgage rates."
In the meantime, he said first-time buyers were likely to continue to benefit from market conditions.
"First home buyers should still be able to find good opportunities, as they continue to benefit from accessing KiwiSaver for deposits and make full use of the low-deposit lending speed limits at the banks."
He said caps on debt-to-income (DTI) ratios remained firmly on the cards for 2024, but high mortgage rates were currently doing the job of restricting any risky, high DTI lending.
As for the number of property sales, Davidson said the upturn was expected to be more subdued than in previous cycles.
"We're anticipating sales rising by perhaps 10 percent and prices seeing growth of around 5 percent, which is still below long-term average levels."
Davidson said some regions offered better pricing than others, given value drops over the past year.
Featherston was the weakest performer over the past year with values down nearly 17 percent, while the top-ranked Sunshine Bay in Queenstown saw 6.6 percent growth, which Davidson said was relatively moderate growth for the top-performing suburb.
Auckland's Herne Bay maintained its position as the most expensive suburb with a median value of $3,161,400, compared with the most affordable suburb of Cobden in Grey at $258,200.
CoreLogic 2023 Best of the Best statistics
- Highest median value: Herne Bay (Auckland) $3,161,400
- Lowest median value: Cobden (Grey) $258,200
- Highest 12-month change in median value: Sunshine Bay (Queenstown) 6.6 percent
- Lowest 12-month change in median value: Featherston -16.0 percent
- Highest five-year change in median value: Mataura (Gore) 138.9 percent
- Lowest five-year change in median value: Auckland Central -8.8 percent
- Top sale price: 120 Victoria Avenue, Remuera, Auckland (18 Jul) $23,800,000
- Highest change in median rent: Fairview Heights (Auckland) 32.4 percent
- Lowest change in median rent: Herne Bay (Auckland) -14.5 percent
- Highest gross rental yield: Whanganui (suburb) 8.5 percent
- Lowest gross rental yield: Whitford (Auckland) 1.1 percent
- Shortest days on market: Hargest (Invercargill) 11 days
- Longest days on market: Ohakune (Ruapehu) 115 days