February marked the strongest rise since a +0.5 per cent gain back in January last year, with growth being seen across most of the main centres. The median national value now stands at $807,164, which is down -16.9 per cent from the record highs in late 2021 and early 2022, but +17.1 per cent above the pre-COVID figure of $689,353 in March 2020. Looking ahead, lower mortgage rates should help property values to continue to grow modestly, but there are still restraints in the form of abundant listings and the debt-to-income ratio rules (effectively the other side of the coin for serviceability test rates).

Turning to rents, the pace of growth remains subdued, as net migration eases down from its very high peak, and the stock of available rental listings on the market stays elevated. There’s also a constraint on how much further they can rise, given that the level of rents is already high in relation to households’ incomes, and of course wage growth has now slowed too. To be fair, rents aren’t falling to any meaningful degree. But the previous rises have certainly petered out, and there seems a decent chance rents will only edge higher rather then surge over the next 6-12 months too.

Over the past two-to-three years, gross rental yields have been trending slowly higher, as property values have weakened and rents have risen (albeit they’ve slowed recently). From a floor of 2.7 per cent in late 2021, they now stand at 3.9 per cent, which is the highest level since mid-2015. Auckland sits at 3.2 per cent, while Wellington City has recently ticked up to 3.9 per cent, with Hamilton and Tauranga just a touch higher at 4.0 per cent. Dunedin has recently nudged above 5 per cent, at 5.1 per cent. Higher rental yields, but more importantly lower mortgage rates, have meant that a new investment property purchase now requires a much smaller top-up from other income than has been needed for at least a couple of years.