The national manager of a global real estate agency has called on the government and reserve bank to do more to help struggling first home buyers.
His comments follow the reserve bank’s figures showing more first home buyers are taking out mortgages with less than a 20% deposit, helped by the LVR restrictions being eased earlier this year.
But Geoff Barnett, national manager of Century 21 New Zealand, said the deposit hurdle still remains too high for many, despite settled house prices and low interest rates.
He said reviewing the need for LVRs and lessening the deposit requirements for first-home buyers is where the Government and reserve bank should now put their focus.
He added, “The real estate market has changed so a policy response from the reserve bank to reflect that is now well overdue. Too many first-home buyers are missing out on attaining the Kiwi dream when they shouldn’t have to anymore.
“The mainstream banks are still implementing their increasingly rigorous criteria, and so for most first-home buyers getting a pre-approved mortgage with less than a 20% deposit remains just about impossible.”
With the reserve bank’s recent comments that the official cash rate is likely to remain low until at least 2020, Barnett said this gives people confidence that their mortgage commitments are not going to dramatically change in the immediate future.
He also pointed to a Massey University Residential Market Report released last month showing that rents have increased steadily over the past five years across the board, with the average national rent up by 25.5% over that time.
He said, “Recently the government signalled a number of changes affecting both tenants and landlords, but regardless rents are not dropping. In fact, some claim the proposed tenancy law changes could only increase rents further.
“Now’s the time to buy and in fact sell. There are always more buyers than sellers out in the market in spring, providing a great opportunity for anyone wanting to sell their property to get noticed before summer brings an avalanche of competing listings.”
At the end of August, Century 21’s new listings were up 40.4% nationwide compared to the end of July, and up 47.5% compared to the end of August last year.
Barnett said, “The spring surge is certainly already happening for us. Regardless, at this time of year real estate companies can never get enough listings.
“The most frustrating thing for any real estate salesperson is that prospective buyers are coming out of the woodwork after a wet winter, but there’s just not enough stock to satisfy them.”
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