Welcome to the March 2025 edition of our newsletter, where we explore New Zealand’s residential property market trends. With shifting monetary policies, evolving migration patterns, and a recovering market cycle, now is a pivotal time to reassess your investment strategy.
Market Updates:
Adrian Orr’s Resignation: A Shift in Lending & Growth Potential
The unexpected resignation of Adrian Orr as Governor of the Reserve Bank of New Zealand (RBNZ) has triggered speculation about future lending policies and property investment opportunities.
Under Orr’s leadership, strict financial regulations, such as Debt-to-Income (DTI) limits and higher bank capital requirements, aimed to safeguard financial stability but often restricted credit access for investors.
What’s Changing?
Finance Minister Nicola Willis has indicated a more flexible lending environment to stimulate economic growth.
Banks may loosen lending restrictions, allowing more property transactions.
Historically, higher sales volumes have preceded property price growth, indicating a potential market upswing.
Investor Insight: With lending policies expected to ease, this could be a prime opportunity to secure assets before demand drives prices higher.
Long-Term Property Growth in Key Locations
At Staircase our focus is on strategic investment locations that have demonstrated superior long-term capital growth. That is why we have primarily focused on sourcing properties in the locations of Auckland, Queenstown, and Tauranga.
These are three standout regions in New Zealand for capital growth and continue to lead the way:
Auckland: The country’s economic powerhouse, offering consistent employment and business growth.
Queenstown: A premier tourism destination with a strong demand for short-term accommodation.
Tauranga: A top choice for retirees, driving steady residential demand.
Over the past 32 years, these regions have outperformed most other parts of New Zealand in terms of capital appreciation. Their combination of economic stability, tourism appeal, and demographic trends makes them ideal investment hubs.
Net Migration: A Key Market Driver Set for a Comeback?
While often overlooked, net migration plays a crucial role in property demand. After peaking at 135,700 net arrivals in the year ending October 2023, migration numbers declined to 30,600 by November 2024, returning to historical averages.
This drop was largely driven by New Zealanders relocating abroad, particularly to Australia. However, a stabilising economy, lower interest rates, and a recovering job market could reverse this trend.
What this Means for the Property Market:
A migration rebound could lead to tighter housing supply in key regions.
Increased competition may drive higher property values.
Stronger rental demand is likely as more people seek housing.
For investors, keeping an eye on these demographic shifts could mean securing great opportunities before demand picks up again.
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