Chapter 1: What is the main topic discussed in this episode?
So AI search, something that needs to be invested more into it.
Kia ora and welcome to a special guest edition of the New Zealand property market podcast brought to you by Kotaudi.
I'm Nick Goodall head of research for Kotaudi and today we're going to review all the results of the just released report called decoding 2026 which surveyed over 1 000 property professionals about their read on the market and expectations for the future including the impact of planning reform and the ever-changing digital landscape
In order to truly understand the results, I've assembled some great guests today, starting with the man who leads one of the most successful real estate teams, not just here in New Zealand, but across Australasia, and founder of the New Zealand Real Estate Conference. Based in Auckland, we've got Diego Trapia. Diego, thank you so much for coming on the show, mate.
Looking forward to getting stuck into this one with you, mate. Likewise.
Thanks, Nick. Hi, Tom.
Hi, James. G'day, mate. And next up, we do have all the way from down the other end of the country, a proven top performer who ranks in the top 3% of Ray White agents across the entire group. And as the co-owner for one of the leading Ray White offices in New Zealand down in Invercargill, James McRobbie. James, I feel like this chat is long overdue given the strength of the Invercargill market.
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Chapter 2: What are the key findings of the Decoding 2026 report?
So I'm stoked you're here to help us understand what is it about the Deep South that's seeing it top so many charts lately. So thanks for coming on.
Hey, pleasure to be here, guys. And you're married to a Southland lass, aren't you? So you should know, right?
Correct, mate. Yeah, there's always a passing view down south, but you can't beat those boots on the ground. So we'll get your thoughts on that shortly. And lastly, though, to round us out today, we do have Tom Code, Head of Industry Solutions for Cotality NZ. Tom, not your first time on the pod, but it has been way too long since your last appearance.
So I'm really looking forward to getting your take on some of the more strategic insights that we've drawn from the report, mate. Thanks for coming on. Thanks for having me back. It's awesome to be back. Good stuff, good stuff. All right then, fellas, let's get into it. Look, I think the high-level key outtake from this report was that sentiment among professionals in the industry has improved.
You know, they're feeling better about where the market's at right now and the likely future of it as well. We saw that almost three-quarters of all New Zealand respondents expect house prices to rise over the next year, and this included 14% to anticipate growth above 5%.
I suppose, as is often the case with this, there are significant regional differences, and that's part of the reason for really being keen to get a couple of agents from different parts of the country. But before we go into those details, I think we saw something like greater positivity in Canterbury.
I think 87% of all Canterbury respondents thought there'd be increasing prices, whereas here in Wellington, We only saw about 63%, so some pretty big differences. I'm really keen to hear about your guys' experiences on the ground though, particularly I think at the end of last year. We'll sort of get to the new year and how things have played out.
So Diego, do you mind kicking us off with our largest centre, with Auckland, coming off a pretty prolonged downturn and then plateau of values. Did things feel like they were getting better prior to the sort of holiday period kicking in last year?
Nick, yeah, well, look, if you put it into perspective, Auckland has lost over 20% of values since the peak in 2021. That's not an opinion. That's a fact, right? I call it a bubble burst because, you know, when you lose 20, 25% of values over the short amount of time, that is what many people call a bubble burst. So we are basically starting from this point.
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Chapter 3: How does market sentiment vary across different regions in New Zealand?
And Macargo is a great example of that. And I wonder, just coming to me now, is that that's probably another reason why that market has been more reactive to falling interest rates.
because it does allow those buyers to be able to extend into a slightly higher price bracket, whereas changed jobs and interest rates in some of the more expensive cities doesn't necessarily change the market you're playing in.
And so there's big parts of Wellington region, for example, and that one and a half to two million, which haven't gone anywhere because there's just fewer people that can stretch to that level, which is that kind of upgrade is that movers market. So it's a great point and something I haven't really talked about or thought about for the more affordable markets.
But Imekagel sounds like it's a perfect example of that.
Yeah, and I think, to give you an idea, I think it's about 60% of our dwellings down here in Southland are priced up to $599,000. Amazing. So that's a hell of a selection, right?
Yeah, exactly. Especially if you're in a job that pays, if you're a teacher or a police person or whatever, these jobs will pay the same no matter where you live.
Yeah.
bang for buck is going to be so much better in an Invercargill where it's more affordable.
And that's what we're seeing. We are seeing people move to our city because they want to get away from the hustle and bustle. They're sick of slaving away, you know, trying to serve as a massive mortgage. They can come down here, buy a nice house for half the price and just live a much better lifestyle. So, yeah, I think a lot of people are counting on to that now.
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Chapter 4: What factors are influencing property values in Auckland?
If it looks close, then yep, I think the market will slow down a bit. If it looks like a clear win to national-led government, then maybe things barrel on. If it looks like more likely a turn, then again, you'd be more mindful of what sort of policy change could that mean. So yeah, Yeah, it's an intriguing one.
I'm sure we'll touch on it throughout today, but that's probably the headline figures I get to. Tom, I think when we talk about mortgage affordability, that's been one of the other streams of conversation we've had lately, which is that according to our own cotality measures, affordability, particularly mortgage affordability, is back to long-term average.
Do you think that's the key thing that's going to have an impact on the amount of mortgages? I know you're pretty close to that banking industry at the same time.
Yeah, look, I think it will. And I think, Diego, you called it a kind of a plateau in values. I think when you get a plateau in values and interest rate reductions coming through, plus for anyone who didn't buy during that bubble that we talked about, you've probably got some equity, even if it's not a huge amount. We bought in 2017. We've got equity.
It's not as much as it was in 2021, 2022, but there's something there. So I think that there's maybe some confidence that will come with that. I think it gives you some more options. There was a point where it would have been incredibly difficult to swap your mortgage provider because your equity meant that you may even have been negative.
So I think that moving even from a confidence piece is probably going to help buyers and look you know we're part of this but yeah access to property information to know how much your property might be worth or the estimated value for that is easier and easier to get as well and if anyone like me is like me they're checking that value on a weekly basis so i think that that will play into it the
you know the affordability is an interesting piece people tend to hold their interest rate payments if they could afford them unless they have to drop them so you then start to get ahead on your mortgage as well and you start to open up longer term investment opportunities with that increased equity because you speed up rather than yeah so there's a few different dynamics but all pointing in a really positive direction what i can see yeah i think there's good reason to expect most buyer groups to have better years this year than they have in the past
And investors are certainly a part of that. But I take your point, Diego, that, yeah, depending on election result, maybe I'd maybe personally be slightly surprised if we saw a massive change in policy once again, if we have a big change in government. But I suppose it's always a potential there, particularly, I suppose, with the Labour Party talking more about.
for something like a capital gains tax. I suppose people would be mindful of that. I'm still in that sort of position where it looks like investors have sort of changed their tech more recently. We've been talking about it for a long time now that we don't expect the same capital growth in the future.
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Chapter 5: Why is Invercargill's property market performing well?
The oversupply is something that we've experienced now since 2022 and probably will linger for a few more years, even if the market will be improving. Look, it wasn't too long ago in 2021 that people were buying land for $2,500, $3,000 a square meter, and now it's worth just $1,100, $1,200, $1,300. So those people at the time
Then obviously came to building a lot of very high density townhouses, especially in Auckland. There was somehow the council allowed certain location to have townhouses without car parking as well, just creating not the most optimal community sort of, you know, the way that it's been designed. So what do you find at the moment?
You still find a high oversupply of townhouses and it's, you don't want to, you know, put them all under one bracket, but very much when you're looking at the blocks of like eight to 10, all next to each other with limited parking. And there is a lot of them now for, there is hundreds and hundreds of them for sale in Oakland.
And a lot of them, if you're looking at how long they've been on the market, They seem to be lingering for quite a long time where average days on the market across the residential spaces is decreasing, is decreasing. The townhouses are still taking months and months of time to sell. And you can find some very sharp prices out there, you know, to the point that, yes, they started selling.
They started selling slowly.
but that was because the owner the developer who was selling it has to bring down their price essentially it's either that or there is more landlords unintended landlords right um to give an example you know in west auckland you can buy two bedroom one bathroom townhouse at five hundred thousand and that was a little bit of unheard of thing even 12 months ago um but it's either that or the properties don't sell and therefore then what you do right so
So I don't envy any developer that is on the market that has been working really hard on a project, getting resource consent, building consent, building their own thing, landscaping it, getting title, CCC, and then nobody wants to meet the market for them to be able to get a profit. So I sympathize with that very well. No, there are cycles as well.
And developers make a lot of money in a good market. And unfortunately, now that's where the market is.
This might be too granular for this conversation, but are they in areas that are going to be well serviced by the city rail line? Like is CRL going to be a bit of a saviour for these places so that then people go, I'm more interested to live here now because I know my transport to town is going to be better or is it a bit hard to tell at this stage?
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Chapter 6: What challenges is the Wellington property market currently facing?
You have to run your business as well, and it can't be the only thing that you focus on. I'd be very interested to hear from James and Diego on practically how that starts to roll out, but I think that
it's not not just about owning data it means that you own it but then you can do something with it once you own it and that's where the value creation from our perspective is is there and that's why we're really trying to support agents with that with tools that help you prospect faster help you you know produce digital advertising in a more sophisticated way or in a faster way or even just kind of keeping up with
non-real estate people who are kind of flooding the market as well i say non-real estate people i mean non-real estate industry entirely you see bunnings advertised all the time online that's you know that's the the eyeballs and we'll probably talk about ai we haven't yet we'll probably talk about ai so but that starts to play into it so this is a range of factors there um but i guess for us it's how do we help with those digital experiences and then how do we help make sure that when
a person is needed that the handoff then is seamless and it kind of all connects together from the start of that journey through to the end yeah connectivity and enablement right like those could be two key things i think one of the other thing from the report was talking about you know the advertising spend by agencies continues to concentrate on those third-party distribution channels but we are seeing that landscape changing there's more and more new players as you've touched on there tom james i think you know the strength of that ray white brand must be so useful for you to operate
And I know that the business is very data savvy. I've seen lots of reporting coming out of your head office there. What's your experience of the performance and insights gained from properties listed directly on your website first or from what you've heard from the other offices? Do you yourself list there first?
Good question. Not yet, but it is work in progress. We're sort of in talks at the moment just in our Invercargill office about just making a bit of a change to potentially launch listings onto our local website first and then push them out onto the other portals after that. I think some of our other offices in New Zealand are having some really good results doing it that way.
So, yeah, that's something we're looking into. It hasn't started yet, but we're certainly looking at it. But, yeah, you're right. I mean, Ray White certainly is –
um as a heavy hitter when it comes to technology access to amazing technology we've got a new system called nurture cloud which has all been rolled out in australia we've sort of got the first part of it the second um the second module will be rolled out in new zealand sometime this quarter um and there's a big ai element to that it's it's very cool so yeah we're pretty lucky
Yeah, no, it's a great setup and the connection to loan market as well is obviously a big part of the business as well. So yeah, really, really cool to hear. Diego, same sort of question. I mean, the website question first as well, but I also know that you're pretty prolific across different social media.
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Chapter 7: How are interest rates affecting property buyers' decisions?
Technology can be used at our advantage.
Yeah, that personalization is really important there, right?
Yeah, I think if you're going to an open home and the agent's getting you to write your name and your phone number on a bit of paper, that's probably not the best agent in town.
Yeah, we've got to move on from that, that's for sure. All good. Hey, Tom, I'll leave the last word for you on AI. I suppose just AI tools and real estate. I know that we've got some ourselves at Cotality. That sort of fits within those gaps of that market that the guys talked about, right?
Yeah, so we've got our AI conversational tool, which is kind of primarily SMS or text messages. We're actually seeing a shift to what we've discussed around more calling, more interaction with those agents themselves.
So where we're really looking is you've got the conversational capability, but what is that next best conversation with that person, whether they're a vendor or whether they're a prospective vendor or whether they're someone that came to an open home three years ago and how do you start at scale when you've got 5, 10, tens of thousands more within your database? How do you do that at that scale?
I'm sure that Nurture Cloud is playing into that space exactly as well, James. That's kind of where we're shifting to now, and I think what AI does is it takes the The pieces and the processes where the value is not in doing the thing, the value is having done the thing. So if you want to communicate with the person, sending the communication is not what's valuable.
It's having communicated to that person. And then as it becomes more accessible and better, it's that hyper-personalization. So those videos sound extremely cool, Diego. I'll be very keen to see some of those.
Yeah, well put. And I think this is another conversation where I'll be interested to see how this lands. I'm really keen to hear other people's experiences too. So I think off the back of this, really I encourage listeners, viewers to get back in touch with us, tell us about your experience.
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