While mortgage rates are falling, buyers are still wary, says CoreLogic. File photo. Photo: RNZ / Nathan Mckinnon
House sales are edging upwards, but a market boom is unlikely to happen soon, with buyers still cautious of the poor economic conditions.
CoreLogic's latest housing report shows sales rose about 8 percent in September, compared to the same time last year.
That is off the back of a trend of increases over the past 18 months, but sale volumes are 10-15 percent lower than normal for the time of year.
Chief property economist Kelvin Davidson said although mortgage rates were falling, buyers were wary.
"Affordability is still a bit of an issue, jobs are being lost and there are a lot of listings, so it is still a buyers' market and all of those things are weighing on house prices.
"At the same time, we've got the debt to income ratio restrictions out there on the horizon so as mortgage rates fall it will obviously reduce the cost of servicing a loan, but the DTI's may make it harder to get the loan in the first place. There are going to be some interesting trade-offs on that front."
Mortgaged multiple property owners made up more than 22 percent of all purchases - up slightly to their highest level since mid-2022.
Davidson said smaller mum-and-dad investors were buying more houses than larger investors.
"The overall share of deals going to mortgaged investors is still below normal. But within that we've seen a relative shift of activity towards smaller investors, and I think that just fits with some of those regulatory changes and lending changes but also falling mortgage rates.
"But on the other side falling term deposit rates. These people might have had cash in the bank, now they're going those returns are coming down, house prices have fallen so I can see some value in property again."
First home buyers have remained a solid presence in the market, with a 26 percent share of all purchases.
Davidson expected the market to recover for the next 12-18 months with house prices and sales rising slowly.