Five key trends in today's property market

The property market in New Zealand is experiencing significant shifts driven by a range of economic, social, and environmental factors. From bustling urban hubs like Auckland to idyllic regions like Nelson and Tasman, these shifts are reshaping the landscape for homeowners, investors, and renters alike.

Understanding these trends can offer valuable insights and opportunities and prepare you for your next property decision.

Here are five key trends currently shaping New Zealand's property market.

1. The urban-to-regional migration

Perhaps one of the most prominent trends is the migration from urban centres to regional areas. The COVID-19 pandemic was the catalyst for this urban exodus, which saw remote working become a viable option. While the pandemic may be well behind us, the appeal of remote or hybrid working has endured. Professionals have been able to retain their careers while seeking more spacious and affordable living conditions away from the congestion of city life.

Drivers of the urban-to-regional shift:

• Affordability: High property prices in major urban centres like Auckland and Wellington have pushed many Kiwis to seek more affordable housing options in regional areas. This has spurred increased demand and price growth in certain regional markets, offering a promising outlook for investors in these areas.
• Remote Work: The growing acceptance of remote work has allowed many people to relocate away from city centres without having to sacrifice their careers. This flexibility has enhanced the appeal of regional living for professionals.
• Lifestyle Preferences: Many homeowners have a growing desire for more space, a slightly slower pace of life, and a closer connection to family and nature. Regional areas often embody these qualities, offering a desirable change for buyers seeking a fresh lifestyle.

Nelson and Tasman: A case in point

Highlighting the trend, regions like Nelson and Tasman have become popular destinations for those seeking a lifestyle that offers both natural beauty and a vibrant community, yet only a short commute from urban benefits.

With stunning coastal landscapes, a mild climate, and a strong sense of community, Nelson and Tasman attracts young families, retirees, and an increasing number of urban professionals.

2. Increased interest from overseas buyers

There has been a notable surge in interest from overseas buyers in the New Zealand property market, particularly following National's proposed policy changes for high-end foreign buyers. Although the policy change has not yet materialised, it sparked significant curiosity. A recent article by NZSIR Managing Director Mark Harris reported a 200% increase in inquiries from the US in October last year. Buyers from Australia and Singapore, who are exempt from foreign buyer rules, also continue to show strong interest.

New Zealand's reputation as a safe haven amid geopolitical issues further enhances its appeal. As leaders in the premium property space, NZSIR continues to see heightened interest from international buyers, underscoring New Zealand's attractiveness.

Homeowners are recognising the appeal of international property buyers and their ability to influence property value increases.

As New Zealand continues to gain global attention as a desirable destination, homeowners can look forward to a vibrant, diverse market with the potential for increased property value and enhanced economic prospects.

3. Changing government policies

The New Zealand government recently shortened the bright-line test period from ten to two years. For many, this heralded a significant opportunity with residential properties only subject to capital gains tax if sold within two years of purchase, regardless of the property type.

Other recent events that may affect decision-making for some are the introduction of the National Hazards Insurance Act on July 1, 2024, and a rate drop for the OCR in August.

The latter marks the first time the Reserve Bank has reduced the official cash rate in four years signalling the government believes they have inflation under control and that confidence in the market is returning.

Changes such as these, which can occur with a change of government or in response to major events, underscore the importance of flexibility for both vendors and buyers as market conditions — including interest rates — evolve. The property market is ever-changing, but with the guidance of a trusted real estate agent, you can navigate these fluctuations with confidence. What may be appropriate this month could change next month, making professional guidance invaluable.

4. Sustainable and green housing

As environmental consciousness grows, so too does the demand for sustainable and eco-friendly housing. No longer a niche market, green homes incorporating energy-efficient design, solar panels, and sustainable materials are becoming mainstream — and sought-after.

As households feel the impact of rising energy costs, it's no surprise that the popularity of energy-efficient homes is on the rise.

Despite perceptions that sustainable building is costly, the long-term benefits, including reduced energy bills and a smaller carbon footprint, outweigh the initial outlay for many, providing a sense of security and confidence in their investment.

5. Technology and smart homes

Technology is revolutionising homes and our lives. From automated lighting and security systems to smart appliances, the integration of technology is enhancing convenience and energy efficiency. The demand for smart homes is starting to impact the property market as buyers look for efficiency and technological advances to make smart living more accessible.