NZ property: House prices will continue to fall before recovering in 2023, says economist Tony Alexander

Independent economist Tony Alexander told Newshub Live at 8pm on Friday he agrees with Kiwibank’s prediction of house prices continuing to drop.

“We’ve got people looking at net-negative migration flows for New Zealand, so we’re losing people overseas,” he told host Janika ter Ellen.

“We do have a lot of supply coming on board and people are starting to fixate on that. We do, of course, have fairly high consumer pessimism, people are worried about what they see around them. So I do expect house prices are going to fall, maybe another 5-6 percent, something like that. ”

But it isn’t all bad news, with Alexander having a silver lining when looking ahead over the next 12 months.

“Over 2023, I think with some of the interest rates starting to come down, the labor market still being relatively firm, I’d expect to see prices starting to recover a little bit,” he said.

Alexander said it’s the right time for first home buyers to jump into the market as “vendors are capitulating to the market” and want to “make a deal”.

“You ask yourself, what is more important here? Trying to get the last 5 percent out of this decline in prices or securing yourselves a home in which to raise a family when the number of property listings are double what they were a year ago?

“We are only just now reaching the point where vendors, I think, are capitulating to the market. They want to get on with their lives, they want to make a deal.

“If I were a first home buyer at the moment, I’d focus on that long-term goal rather than the last five percent of the price cycle.”