A Hamilton real estate agent is warning that house prices could climb again as Kiwis return to New Zealand.
Lodge Real Estate managing director Jeremy O'Rourke says New Zealand is experiencing an artificially-suppressed housing market. He predicts that as borders reopen, house prices - alongside demand - could reignite as those locked out through managed isolation restrictions return looking for somewhere to live.
"As our borders reopen and tensions increase between Russia and Ukraine, New Zealanders will be looking to return to safety. Citizens and residents will travel back to New Zealand to reconnect with family, and they will all need somewhere to live," he says.
"We know the COVID-19 crisis is pushing many home. Adding to this, we saw Kiwis return en masse after major global crises like 9/11 and the global financial crisis, so we believe the Ukrainian conflict may trigger an Antipodean population shift once again."
Earlier this week, a new real estate survey revealed a record number of agents are seeing a decline in house prices in their location.
But O'Rourke says some predictions from economists that there'll be a long-term slump in the market are "haphazard and misguided" because the market is artificially suppressed.
Around 5000 international students were tipped to return to New Zealand once borders reopened, and around 10 percent of those will head to Hamilton, he says. With only 80 rentals currently available in the city and with 50 percent of those being small studios, the impending student influx poses "a real challenge".
"We expect the second half of the year will see a renewed vigour from investors as simple supply and demand pressures caused rents to rise, making rental property investments very attractive," O'Rourke says.
He adds that throughout February there had still been multiple offers made on many quality Hamilton homes, although foot traffic at open homes had been down because of increasing Omicron cases.