Is the NZ property market heading into the Hermit Kingdom?

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Is the NZ property market heading into the Hermit Kingdom?

The other week John Key came out swinging, calling New Zealand the Hermit Kingdom, akin to living under a regime in North Korea. I would say in many regards the way I feel right now is that he is somewhat right. Never have I felt so disenfranchised with the government trying to keep us safe. Whilst I feel politics is something we certainly try to keep to one side and I like to take an objective view on this, I am seeing more than a few people’s attitudes changing and they are changing fast. I wanted to take a quick look at all of this and relay it back to what we know well here at which is the NZ Property Market.

We are seeing signs of New Zealanders looking to move back out of the fortress of Aotearoa and head back to where the work is. Let’s face it, if you are a nurse, school teacher, policeman on front line in uncertain New Zealand would you be looking to buy a house in a property market right now, or would you consider the move to Australia or the UK. I think the brain-drain and migration of kiwis is about to start again and possibly in huge numbers. The flight to safety for kiwis is well and truly over and New Zealand could get left behind very shortly.

What’s this all got to do with the New Zealand house market I hear you say? Whilst the rest of NZ has largely been running on starved oxygen under this regime at level 2 (delta) the property market has performed very well. Spring is here, and we expect sales to be strong. There is still a lack of stock which is creating higher sale prices. However, the biggest piece of the puzzle to the national GDP… ‘Auckland’ is slowly suffocating under lockdown. The young professionals, the front-line workers, and many workers wanting to do an OE flooded back to NZ after the first lockdowns in March 2020. Subsequently they went straight into the property market increasing property prices to record levels. But I think the gloss has come off. I think some of these professionals and workers will retreat straight back to UK, Hong Kong and where they came from as soon as Air NZ says go! Other countries are getting on with it. They are largely vaccinated and very much open for business now and opportunities are opening up again. I think there will be more houses quickly coming for sale, and when this climate of fear is released especially in Auckland and the covid levels finally drop from the Hermit Kingdom we live within right now you will see huge numbers of houses on the market across NZ.

So, what’s that going to do to house prices in NZ? I believe that you will start to see a cooling in house prices especially with the tsunami of homes for sale coming on stream. The choice will be the determining factor, and this coupled with further interest rate hikes will mean a plateauing of price. I think you will see some increases in prices still for desirable lifestyle areas like Tauranga/Mount Maunganui, Northland, Nelson, and Wanaka as these places’ prices will hold strong as people will clamber to flee Auckland after this severe lockdown. However, expect to see prices in Auckland and the Waikato flatten and with that the follow-on regional areas that have experienced double-digit growth may slow down also.

At we still have many buyers ready to purchase and we are seeing many Auckland buyers using our tailor-made technology in Level 3 & 4 to purchase further afield. It’s still a great time to sell at the moment. But I caution what’s just around the corner.

Best of luck navigating your way around this Hermit Kingdom everyone.



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