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Auckland Property Market Set to Soar: A Look into the Predicted Growth for 2024 and 2025

New Zealand average property price has declined by 14.6% since it peaked in February 2022, however it is still almost 25% higher than April 2020. With Auckland, Wellington and Christchurch property prices all increased in August, there are clear signs of property market rebounding on the horizon.

The chief economists from the four major banks have predicted the property price will grow in 2024 by between 5-7%.

According to economist Tony Alexander, Auckland's property market is poised for substantial growth in the coming years. In his predictions, he anticipates an double digit growth in both 2024 and 2025.

But what's driving this remarkable surge? Let's delve into the key factors that are paving the way for Auckland's property market to flourish.

1. Reduced Property Listings

One of the standout reasons for Auckland's property market growth is the decrease in property listings compared to the same time in 2022. This scarcity of available properties has created a sense of urgency among buyers, driving up demand and subsequently, property prices.

2. Surging Migration Numbers

Auckland is experiencing its highest migration numbers in recent years. This influx of newcomers is not only boosting the local economy but also increasing the demand for rental properties, which are already in high demand. As a result, the competition for available properties has intensified, further propelling property values upward.

3. Decreased Rental Property Availability

Higher migration numbers would led to a drop in the availability of rental properties. As rental options become scarcer, many young people who had previously been saving for a deposit are now looking to purchase homes of their own, contributing to the growing demand.

4. Eager First-Time Buyers

The combination of higher interest rates and the lack of rental options has motivated young individuals who have been speculating in the property market, who also have been saving for a deposit for over 2 years to finally take the plunge and buy their own homes.

5. Anticipated Policy Changes

With a potential change in government leadership on the horizon, the reversal of current government's “bright-line test” policy from 10 years to just 2 years has piqued the interest of investors who are now showing a keen inclination toward the Auckland property market.

6. Record Low New Build Numbers

Auckland is facing a crisis in terms of new construction. Record low numbers of new builds mean that the supply of new properties is not keeping up with the surging demand, further pressuring property prices to rise.

7. Economic Factors

The effects of global events on New Zealand's primary industries, such as a reduction in demand from China, are anticipated to impact regional New Zealand especially farmers and dairy farm owners negatively, which in the long run will ease inflation pressure and potentially lead to lower interest rates. This would make property investment even more attractive and drive property prices higher as a result.

8. Low Unemployment Rate

Auckland's record-low unemployment rate has resulted in more qualified buyers entering the property market. With greater job security and financial stability, these buyers are contributing to the current FOMO (Fear of Missing Out) trend.

In conclusion, the Auckland property market is on the cusp of an exciting period of growth. Driven by a combination of factors, including increased migration, reduced property listings, policy changes, and economic conditions, Auckland's real estate sector is drawing in eager buyers. The shift from FOOP (Fear of Overpaying) to FOMO (Fear of Missing Out) has created a sense of urgency in the market, with many potential homeowners rushing to secure their piece of the Auckland property market before prices surge even higher.

As all the expert predictions suggest, the coming years look incredibly promising for Auckland's property market, and investors and homebuyers alike are watching with great anticipation.



The information provided in this article is for informational purposes only and should not be construed as financial advice. It is essential to understand that the Auckland property market, like any investment, carries risks, and individual financial situations vary. Before making any financial decisions, including property investment, it is strongly recommended that readers consult with a licensed financial advisor or professional who can provide tailored guidance based on their specific circumstances and objectives. Any actions taken based on the content of this article are the sole responsibility of the reader.

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