Housing Aspirations for New Zealanders in 2022

Houses for sale and sold in central Auckland, New Zealand, on Nov. 25, 2015. (Fiona Goodall/Getty Images)

The COVID-19 pandemic has pushed many New Zealand (NZ) families to think broadly about the space they want to live in, as some feel ready to move out of the city for bigger houses and better lifestyles.

A survey of 1,300 Kiwis, conducted by Westpac NZ, found that almost one-in-five people wanted a bigger house.

Of the people considering moving, having a better lifestyle was the most common response, at 47 percent, followed by having more space.

However, most people preferred familiarity. Of the people thinking about moving, almost half were considering going suburbs near where they lived and one-quarter planned to move within the same suburb.

Around one-third of those people who are choosing to remain are considering renovations as people think about upgrading their existing living space.

Westpac NZ General Manager of Consumer Banking and Wealth, Ian Hankins, said many people have reassessed how they feel about their current living space and what’s important to them.

“Regional New Zealand has always offered great lifestyle and affordability options,” he said. “Now with remote working becoming more common and property prices much cheaper outside the main cities, the pulling power of the ‘big smoke’ may be reversing.”

A general view of soft toys in the window of Prime Minister Jacinda Ardern's Wellington residence in Wellington, New Zealand, on April 09, 2020. (Hagen Hopkins/Getty Images)

Respondents also included downsizing, lower costs, and better investment returns as reasons for moving.

“Priorities have changed since the pandemic and this might be the year people take a chance on a lifestyle change,” Hankins said.

New Zealand’s property market surged a record 27.6 percent over 2021, forcing many buyers out of the market due to affordability issues.

Corelogic revealed that house prices every suburb across the country recorded positive growth during the year, bringing the average value of a New Zealand home above $1 million (US$662,000).

“2021 has truly been a remarkable year in the property market, with low interest rates and the continued ability for most borrowers to secure finance both key contributors to persistently strong demand for residential property,” Corelogic Head of Research NZ Nick Goodall said. “It must be acknowledged though that both these factors are changing.”

Rules have been tightened to bring greater scrutiny a potential borrowers’ expenses and ability to repay the loan, reducing borrowing capacity.

“Feedback from mortgage advisors has been very strong that the tightening has gone too far,” Goodall said.

The Reserve Bank of New Zealand (RBNZ) made its first cash rate hike in October 2021, with more hikes likely to follow because of high inflation levels (5.9 percent).