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Mortgage Broker Issues House Price Warning
Susan Edmunds, Money Correspondent
House prices could be set to fall again and it may be a good opportunity for first-home buyers, the head of one of the country's largest mortgage broking firms says.
Economist Tony Alexander's latest surveys of real estate agents shows 44 percent say they feel prices are currently falling in the area they work in. That was the worst result since 2022.
The agents reported the top three concerns of buyers were rising interest rates, employment and then falling house prices.
A net 51 percent of agents said fewer people were attending open homes, which was also the worst reading since early 2022.
Agents said they were also receiving fewer requests for appraisals from people thinking about listing their properties.
Squirrel mortgage brokers chief executive David Cunningham said he expected prices would fall in coming months because of low consumer confidence, decent levels of new building and low immigration.
"Days to sell have blown out, there's loads of stock on the market, and rents are falling. This is most notable in Auckland and Wellington.
"But quality homes - existing and new builds - are selling. Often when times are gloomy is the best time to buy, especially for first-home buyers."
The Reserve Bank noted house prices in its most recent financial stability report. It said prices had been broadly flat for the past three years and a higher number of houses for sale was keeping prices down.
"House prices remain around the top of our estimated sustainable range. While this suggests the risk of a correction is not particularly elevated, rising mortgage rates could reduce house prices further. Growth in mortgage lending has also been subdued."
In their most recent property update, ANZ's economists said prices had been picking up before the fuel shock.
"House prices rose 0.8 percent in the three months to March and houses were selling a touch more quickly. However the housing market is now facing into a set of formidable challenges.
"The fuel price shock has weakened the outlook for economic growth and is pushing up inflation. We see the OCR rising three times this year, starting in July, as the RBNZ worries about inflation pressures spreading. There is also uncertainty from the election, including the prospect of a potential capital gains tax.
"Given these headwinds, we think house prices are likely to fall slightly - we continue to pencil in a 2 percent decline over 2026."
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