Four reasons why we won't see property prices collapse in 2023
As we navigate through 2023, concerns about the stability of the New Zealand property market have been swirling. However, there are several key factors that indicate a collapse in prices is unlikely.
1. Population growth 🛬🧑🤝🧑⬆️
New Zealand is gaining more people. Stats NZ net migration figures for January show a net gain of 33,200 people. This is a massive gain compared to a net loss of 17,500 in January 2022. As the population grows, the demand for housing will continue to rise, providing support to the property market and helping to prevent a collapse in prices.
2. Construction slowdown 🏗️👷♀️
We're seeing fewer homes being built as developers struggle to obtain finance. They're shedding staff, on-selling land and even some are cashing up their luxury cars. In February, the seasonally adjusted number of new dwellings consented fell 9.0 percent.
3. Shrinking Supply: Record-Low Listings 🏘️📉
Realestate.co.nz has reported that just over 9,200 new properties were listed for sale last month, which was the lowest number of new listings for March since their records began 16 years ago. Economics 101 suggests that when supply drops, prices move up.
4. Interest Rate Clarity: Buyers Factoring in Higher Rates 🏦💰
There is a general feeling that interest rates are nearing their peak. While homeowners will be feeling the pinch as they move off their fixed rates, buyers now know what they're in for and are factoring this into what they're paying.
