Market stable ahead of 2025 Budget

The housing market took its usual April breather last month, with prices and sales easing back from March. Despite this seasonal dip, the market remains stable.

Prices dropped just 1.1 per cent to $781,000, still firmly within the stable $750,000-$801,000 range. This April pattern is nothing new; we've seen similar March-to-April dips nine times in the last decade.

This tends to happen in April as school holidays, Easter, ANZAC Day and shorter days all combine to put house hunting on the back burner.

The number of transactions have likewise dropped 17.5 per cent from March (from 7,797 to 6,427), but while this  represents a significant month-on-month decline, it actually outperformed the usual April results.

The typical March-to-April sales decline over the past decade has been 25 per cent, making this year's 17.5 per cent drop considerably less severe than usual.

Even more telling, this April's transaction volume exceeded last year's figure by 9.5 per cent, with 556 more properties sold than in April 2024. 

The message is clear: we're still in a solid buyer's market with plenty of choices, stable prices, and falling interest rates.

Christchurch stands out as the strongest performer among major cities. It's the only major urban centre showing annual price growth, with minimal depreciation over three years.

This contrasts sharply with Wellington and Auckland, both down 4% from last year and a substantial 13% from three years ago.

The West Coast, our most affordable region, continues its rollercoaster ride. After surging 11.5% from February to March, prices dropped back by 11.4% in April. Despite these dramatic swings, the region sits 6.9% below its values from three years ago.

Only three regions have managed positive growth both annually and over the three-year period: Southland, Otago, and Canterbury. Meanwhile, Tasman and Nelson show promising signs of recovery.

However, the broader regional picture remains mixed, with 9 of our 16 regions still working through price corrections.

The outlook is taking a more optimistic tone. While last year's Budget painted a gloomy picture with downgraded forecasts and recession concerns, Finance Minister Nicola Willis is taking a more positive approach for Budget 2025, due this Thursday (May 22).

Her policy statement reveals five key areas to boost productivity:

• Skilled workforce development by focusing on education improvements, including a knowledge-rich curriculum and new charter schools opening from 2025.

• Regulatory reform through the new Ministry for Regulation, which will review complex systems like resource management, ensure fit-for-purpose regulations, and develop "best in class" competition policy to boost productivity.

• Home-grown and offshore innovation through regulatory certainty for emerging technologies like gene technology, and improved public-private collaboration in commercially valuable research.

• Access to new markets and reduced trade barriers, with recent free trade agreements with the UAE and Gulf Cooperation Council, plus liberalizing foreign direct investment to encourage capital inflow.

• Infrastructure investment with specific focus on addressing the housing crisis through the "Going for Housing Growth" policy to free up land, remove planning barriers, and improve infrastructure funding.