See below a summary of the fundamentals within New Zealand’s South Island, plus an outlook for the market.

Fundamentals

Population underpins the South Island

Population growth was fastest in the South Island between 2018 and 2023, compared with the North Island. The fastest growing regions in the South Island were Tasman and Canterbury. This helps to underpin the performance of the property markets.

Transport infrastructure enables business

Investment into road networks is progressively improving transport connectivity in the South Island. This connectivity enables a range of industrial activities and other commercial activities that support the wider economy.

Fast-track projects to supercharge growth

The Government has announced a range of fasttrack projects across the South Island. These include housing, land and various infrastructure projects to support growth. These projects will help drive the next cycle of development.

Outlook for the market

Interest rates’ the one to watch

The Reserve Bank has recently lowered interest rates, with further reductions anticipated over time. The immediate impact has been more enquiries by buyers and it has become easier to reach agreement on prices. That said, the market has not yet seen any substantial rise in prices.

Wider residential market starting its recovery

Independent forecasters are typically predicting house prices will rise over the next two years. Constrained housing supply will likely continue to drive long-term price growth. In the short-term, price growth has been constrained by the impact of high supply of homes on the market for sale.

Commercial property market entering recovery

Lower funding costs will translate to more demand for commercial property. Leasing activity is expected to remain robust, albeit tempered by softer economic conditions. Constrained supplies of zoned development land within the South Island will help support land prices and demand from developers.