New Zealand is about six months into their housing downturn, offering some clues about what’s to come next for Australian property. housing property
New Zealand, which is six months in their downturn, are on track for a soft landing and a good indicator of where Australian could land.Australian house prices are not expected to plummet below pre-COVID levels with experts saying the local property market can look to the “soft landing” being experienced in New Zealand as a guide.
New Zealand house prices have fallen 5.5 per cent from their November 2021 peak with forecasts it will drop 11 per cent by year’s end, according to ANZ New Zealand. “But [so far] it couldn’t have happened in a more orderly fashion … they have to fall 30 per cent to be where they were before COVID in 2020.”She acknowledged that despite this fall, housing affordability had barely improved after prices rose in the order of 50 per cent during the pandemic.
“It does give us a clue as to what might happen in our country, particularly in the [major] cities ... they’re seeing anywhere between 10 to 12 percentage point drops and 5 percentage point drops in regionals.” New Zealand also introduced legislation last year that tightened home loan assessments, Masters said, which compounded the effect of rate hikes.Lastly, more New Zealand households took on bigger debts in relation to incomes, Masters said.
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