Will NZ Outperform Australia? What This Means for Property Prices

Will New Zealand’s economy really outperform Australia over the next few years? And what does this mean for property investors and first-home buyers?

In this episode, Paul from Property Apprentice breaks down:
Why Westpac expects NZ to outpace Australia economically
How OCR cuts and affordability improvements are creating a unique buying window
Why Sydney’s $1.7M median price makes NZ property look affordable
What the next 6–12 months could mean for buyers, investors, and upgraders
Why NOW is the time to plan before the market heats up again

The Reserve Bank of New Zealand has already dropped the OCR by 250 basis points, with more cuts likely before year-end. Meanwhile, housing affordability has improved significantly—from 57% to 44% of median household income. But this window won’t last as demand from buyers and investors picks up.

If you’ve been waiting to make a move in property, now is the time to get advice and prepare.

👉 Join our FREE property investment events to learn more: www.propertyapprentice.co.nz

👉 Or book a chat with our team today! https://www.propertyapprentice.co.nz/...

📌 Don’t wait until rates drop further—by then, the competition will be back in full swing!

#NZProperty #PropertyInvestment #OCR #InterestRates #RealEstateNZ #FirstHomeBuyer #MortgageRates

Transcript

 Hi, Paul here, Property Apprentice. I'm stepping in for Debbie this week. Just wanted to run through a few things that I have seen in the market over the last little while , and I think this is something that, we all need to be aware of. You may or may not have seen the Westpac research paper that came out. Their economists are expecting New Zealand to out perform Australia economically over the next few years. There are a few reasons for that and, there are implications for investors and home buyers in New Zealand. First, , as we remember, there was a bit of a brain drain and, Kiwis left for Australia as the grass look green greener.

But with lending conditions, tightening in Australia now, funding becoming harder to access, it will be tougher for people to buy. And I think there will be a, a lower. Growth rate in the homes over there as well. The other thing, what would happen is, this could mean that would be some people coming home because the grass wasn't as green as they thought.

And if we look at a couple of weeks ago, Sydney's median house price value now sits at 1.7 million Australian dollars. And you know, we think it is, it's expensive here, so it doesn't really matter how much more the income is Another for Auckland, $800,000 is medium value. On top of what it is here is a lot of money, so I think now New Zealand is definitely moving into the next phase of the economic cycle.

The Reserve Bank has dropped the official cash rate again this month. Over the last year, we've seen about 250 basis points of cuts, and there's a likelihood of another 50 basis points. This is what the Reserve Bank has hinted at, that they're looking to do before the end of this year. That easing will help, boost domestic demand and unemployment in New Zealand.

By contrast, if we look at the RBA, the Reserve Bank of Australia, they have tightened more gradually. They've only cut 75 basis points since the start of this year and their lending conditions remain mildly restrictive so australia is like to see modest growth and New Zealand is expected to return to more normal levels of growth and even a stronger per capita GDP growth over the coming years.

Westpac's, are expecting the official cash rate to be at 2.5% by the end of the year, which goes in line with what the Reserve Bank said. Cotality has also said that there is an affordability window right here, right now for housing. And our affordability sits at about 44% of median household income.

The amount that you need to service a mortgage now. Although that still sends a lot, it's actually down from 57%, so it has dropped quite away, which makes a massive difference. And if we do get those extra two official cash rate drops, that affordability, if the the banks get to pass some of that on, we'll actually get better.

So people are already thinking that house prices are increasing so that window will close at some point that we are seeing right now in the future years from here. So if you think about the the boom that we had, and I think the media does a great job of reminding us much has prices have dropped since 2021.

But you really need to put it in perspective of the government spending that we had, the CCCFA, the official cash rate going up increased due to inflation. That that was due to a lot of government spending. But if you strip that out and you take out that peak of that market and you put a ruler on, say, from 2015 to 2025, now.

And you put a ruler line, we are back on that natural growth line had that have not happened. So I think we're back to where we should be, as if that boom never came along. So what does this mean for you? I think investing or home buying or upgrading, whatever it is for you over the next to six to 12 months will be good.

But you need to be thinking about that now and at least getting financial advice sorted so you can hit the grand running. At the time that your financial position allows, and obviously that is something that we help our clients with.   📍  📍 So if you're interested in coming to one of our free events then just go to www.propertyapprentice.co.nz and come to one of our free events.  📍 

 📍 And you can also book in a meeting to have a chat with me at any time as well.  So. Don't wait until the next couple of official cash rate drops have been locked in before you jump to the market. Because by then I think a lot of other investors will be back in as well. And we're already seeing that increased demand from the first home buyers and investors getting back into the market.

But as the cycle turns you want to be ready and raring. So please do come along to one of our free events that's been helpful. Look forward to catching up with you again soon.