At no point in the last two decades has there been such economic change in such a short time.

As a global health crisis meets war and ensuing geopolitical and economic chaos, recessionary indicators, climate change impacts, and broad-based uncertainty have turned every demand driver on its head.

As a global health crisis meets war and ensuing geopolitical and economic chaos, recessionary indicators, climate change impacts, and broad-based uncertainty have turned every demand driver on its head.

For the residential property sector, there are clear obstacles to navigate, as expectations of persistently high inflation and a remarkably resilient New Zealand economy require harder and faster measures to calm.

Global risks have real effects at home and abroad, with a slowing Chinese economy impacting one of New Zealand’s biggest trading partners’ abilities to import, export and invest in Kiwi commodities.

Likewise, the war in Ukraine and economic uncertainty in some of the world’s largest markets - the United Kingdom, the United States and Australia - have a bearing on trade, supply, consumer spending and global economic growth.

For residential activity across Aotearoa, the impact of uncertainty has come on hard and fast.

Following early indications of stabilising market conditions, the Reserve Bank of New Zealand’s (RBNZ) final Monetary Policy Statement (MPS) of 2022 delivered a significant blow, capping off the fastest phase of monetary policy tightening since the introduction of the OCR tool some 24 years ago.

For homeowners rolling off ultra-low mortgage lending rates onto new metrics, household balance sheets are being carefully scrutinised, and there continues to be a disconnect between buyers’ and sellers’ market expectations.

Despite interest rates rising aggressively and transaction numbers tumbling, there are bright spots across the market.

Homeowners in possession for the typical seven-to-eight-year hold period will have collected substantial capital gains, while landowners reaping the rewards of up-zoning and first home purchasers maximising current opportunities continue to transact despite volatility.

For many, the return to a more manageable market pace was inevitable given the bullish performance of the property market over the past decade, where prices for residential assets peaked so high it prompted heavy-handed government intervention.

It’s in our national interest not to let property values run away again, at least not while the central bank uses every tool in its arsenal to return headline inflation from the current 7.2 percent, back to the target band of one-to-three percent.

While highly-geared mortgage holders, investors and those carefully adjusting budgets are advised to hold on tight, accrued equity and an easing market pace continue to create opportunities across the sector.

Residential real estate is a commonly-thought hedge against inflationary risks, and we expect house hunters will continue to monitor opportunities as we head into 2023 – with investors watching even more carefully as the election year pantomime progresses.

Particularly given the likelihood a change in government could reverse tax changes brought about in 2021.

Residential real estate is a commonly-thought hedge against inflationary risks, and we expect house hunters will continue to monitor opportunities as we head into 2023 – with investors watching even more carefully as the election year pantomime progresses.

Through all the muddy water, one thing is clear – property owners with a view to buying or selling will benefit from a partnership with people who can confidently guide them through the market wilderness.

Having navigated property highs and economic lows for nearly half a century, Bayleys salespeople are in a superb position to manoeuvre clients through these choppy waters and continue to broaden our service offerings, adding value to each transaction.

As New Zealand’s largest full-service real estate agency, with 96 offices from the top of the North Island to the deep south, our clients benefit from Bayleys’ collective strength, which mitigates risks, creates competition and yields results.

Whether through our depth of market analysis, pre-sale guidance, negotiations, marketing, development consultancy or leveraging a strategic partnership with global real estate consultancy Knight Frank, Bayleys offer the tools, reach and expertise to make the most of the current market conditions.

Given a track record of excellence and a refreshed and ready attitude equipped to effect results, partner with us in 2023, and we will guide you home.

Click here to contact your local Bayleys office.