The housing market is slowly coming back to life, but home owners looking to sell this year for large amounts of profit may be disappointed.

National’s campaign promise to bring foreign buyers back in the market had luxury home owners holding their breath with anticipation. But their hopes were dashed when it was scrapped by coalition partner New Zealand First.

“We’re almost down 70% in the last quarter on luxury sales across Auckland,” real estate agent Caleb Paterson told 1News.

The figure is a fall of $1.5 billion in 2023 compared with the previous year.

However, Paterson is feeling more optimistic this year.

“What we’re expecting is actually a big influx because homeowners now have certainty and confidence that look, we’ve got to change – albeit not the change that we’re expecting – but now we can actually get on with what we want to do on the market,” he said.

The market had a mixed year in 2023, with high interest rates putting a slight damper on demand, while supply shortages kept the market tight.

It comes as ASB’s end of year housing market report found that for the first 18 months, more Kiwis expected house prices to rise rather than keep falling.

“In the most recent housing data that we’ve seen, prices have been increasing so people are probably responding to what they are seeing when they go to open homes and go to auctions and things like that,” the bank’s chief economist, Nathaniel Keall, said.

“We’ve also seen net migration’s been very strong, construction’s sort of started to come off a little bit, potentially interest rates are getting closer to that sort of peak.”

Home loan rates have risen from less than 3% to 6.5-8.5%.

Mortgage brokers say it’s been a rollercoaster year.

“There’s still quite a few feeling the pain. I call it sticker shock. When your rate goes from 3% or 4% to 7%, it’s like ‘where am I going to find that money?’,” My Money director Stephen Robertson said.

Treasury expects house prices to pick up by about 5% in 2024.

“I think February/March is going to be a big jump in listings and property coming on the market,” Robertson said.

Keall said the bank is “not seeing prices get up to those magnitudes of rises that we saw during the last upswing”.