Where will the market go now?

If only real estate professionals were able to see the future.

Just over 12 months ago, we were emerging from Alert Level 3 and the State of National Emergency was being lifted. We were all still unaware of what the future held and what the longer term impact would be on the property market.

Fast forward 12 months, and we’ve witnessed some of the sharpest annual house price increases the country has seen in recent times, with REINZ regularly reporting annual increases of around 20% to 25%. There have been a number of factors underpinning the market including the low interest rate environment, the removal of the LVRs (up until 1 March 2021) and the lack of supply. Additionally, rental prices around the country have continued to increase again as a result of a lack of supply and the fact that a number of investors are looking to exit the market.

The Government and the Reserve Bank have been staring down the barrel of these unsustainable house price and rental rises and are now looking to respond appropriately. Unfortunately, there are no silver bullets or magic wands and “solving the housing crisis” isn’t something that is going to happen overnight.

It is REINZ’s expectation that house prices will continue to rise for the next couple of months, albeit at a slower pace. Then hopefully, as we head into the coldest months of the year, we might start to see the market stabilising a little more and potentially some easing of prices, hopefully making it easier for first time buyers to get into the market.

In the meantime, there have been a number of announcements from the Government regarding policies it intends to introduce, and I would urge you all to keep abreast of these and ensure you are aware of the details of the various policies in order to provide the correct information to clients and customers. REINZ will of course keep members informed of any changes via the magazine, In the Know, our blog site and social media pages. So, I encourage you all to keep an eye on these channels in the coming weeks and months.

On page 40 we update you on the changes to the real estate qualification and how this is progressing and on page 14 we’ve outlined all the recent government changes designed to accelerate the building of houses and reduce investor demand. We also outline some of the changes to the Emissions Trading Scheme and how that will impact land transactions – see page 26 for more details.

However, the biggest change, that no doubt most of you will be aware of, is that REINZ will have a new Chief Executive joining us next month. As announced in April, Jen Baird will be joining REINZ on 5 July as the new Chief Executive. This is an exciting move as Jen is a strong, strategic thinker with exceptional people management capabilities, and she is used to leading teams through challenging transformative environments. She has spent the last three years as the General Manager, City Growth, for the Hamilton City Council and prior to this was Chief Marketing Officer at Barfoot & Thompson for 10 years. You can read more about Jen on page 12.

After just four short months working with the REINZ team as Acting Chief Executive I will be sad to leave them as they taught me so much and were great company. I have also enjoyed the opportunity to connect directly with so many members around the country, sharing both the highs and the lows in a challenging and fast-moving market environment. I learned a lot.

No doubt, Jen will put a plan in place to get out and about and meet as many of our members over the coming weeks and months. I leave the Acting Chief Executive role knowing that you’re all in great hands.

Best wishes, Wendy Alexander

Wendy Alexander

Acting CEO, REINZ