At that rate, property prices could easily increase 7-8% this year. That is in line with some of the main banks' forecasts.
Westpac thinks property prices will go up 8% this year. ASB says 7.3%.
However, some banks are more conservative. ANZ says prices may only go up 4% in 2024.
Who will be right? It depends on interest rates. Right now, they are high. But many commentators expect them to come down a bit.
Earlier this week, Kiwibank and TSB both decreased their 2 and 3-year interest rates.
And in the last business days of 2023, ANZ, BNZ and ASB also reduced their rates.
These changes are nothing to write home about. They’re all small 0.1 – 0.2% decreases. But they set the scene for what could come throughout the year.
Most of this will be welcome news to investors who have endured 2 years of doom and gloom. So, if you’re mulling over an investment this year, where are the hot spots to buy?
Let’s look at my over and undervalued model. It looks like the three big cities are at the right point in their property cycles.
Auckland, Christchurch, and Wellington City could be the best places to invest.
Auckland looks 9.3% undervalued, Christchurch 9.26%, And Wellington City 11.9%.
Regional property prices boomed from 2016 – 2021. They outpaced the larger cities. Now it’s the big cities turn.
Just be careful with Wellington City. It’s still on the downward leg of this cycle.