Key Facts

  • Bank economists are predicting a gradual increase in house prices between 5 to 8% in 2024, driven significantly by increased immigration during 2023.
  • BNZ and ASB economists predict a 7% increase in house prices, citing high mortgage rates and an increase in demand.
  • ASB and Westpac economists believe population growth will moderate during 2024 but keep pushing demand for houses.
  • ANZ economist Andre Castaing anticipates a slow down in growth by the end of 2024 due to few economic activities and softer labour markets. He expects higher mortgage rates to limit borrowing capacity and overall demand for houses.
  • Kiwibank economist expects a house price increase between 5 to 7% partly due to potential cuts in mortgage interest rates in 2024.

Article Summary

Bank economists foresee a steady increase in house prices between 5 and 8% throughout 2024, largely due to a surprising surge in immigration in 2023. This unexpected rise in immigration has led to a quicker turnaround in the housing market than initially predicted. While BNZ’s chief economist, Mike Jones, anticipates a 7% increase in house prices, he also points to a continued impact from high mortgage rates and a patchy pick-up in demand.

ASB’s chief economist, Nick Tuffley, envisions similarly but foresees a more moderate influx of migrants in 2024. He believes this will continue to drive demand for housing, particularly as interest rates are expected to go down in 2025. In contrast, ANZ’s economist, Andre Castaing, predicts a substantial reduction in growth by 2024 due to an economic downturn and weakening labour market.

Kiwibank’s chief economist forecasts a house price increase between 5 to 7%, factoring in potential mortgage interest rate reductions in 2024. He anticipates a resurgence of investor activity and notes a burgeoning housing demand, outstripping supply. On the other hand, Westpac’s chief economist predicts an 8% increase in house prices, backed by strong population growth trends.

Overall, economists’ predictions for 2024 indicate an increase in house prices, although there’s some differentiation in projected growth rates. High immigration rates, mortgage rates, economic activity and population growth remain key factors in these predictions.

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