Nearly nine of 10 agents have seen an increase in prices in their area
Real estate agents have seen a decrease in attendance at auctions and open homes in December, according to the Real Estate Institute of New Zealand (REINZ) and independent economist Tony Alexander.
The latest joint survey by Alexander and the REINZ revealed a slight decrease in the presence of first-home buyers and investors in the market in December, which might have been due to the reinstatement of loan-to-value ratio (LVR) restrictions in some banks.
“It is also possible that some people may simply be getting tired of weekends in a row spent attending open homes and frequent presence at auctions. Support for this possibility is seen in the fact that an unchanged net 88% of agents still report the presence of FOMO (fear of missing out) on the part of buyers,” the report said.
A high net 88% of agents also reported seeing an increase in prices in their area, with only 12% claiming that buyers have employment concerns (down from 48% in June) and 49% reporting that buyers are finding it difficult to get finance (up from 43% in November).
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Century 21 New Zealand owner Derryn Mayne said she hopes the Reserve Bank of New Zealand (RBNZ) would scrap its plans to reinstate LVR restrictions in March 2021 as activity from first-home buyers cools down slightly.
“With buyers feeling more comfortable about their future and highly motivated to buy for fear of missing out on a property, it's safe to conclude that vendors can expect strong interest in their properties this summer,” Mayne continued.
She added that the timely reported cooling could help save first-home buyers from blanket higher deposit requirements being imposed from March 2021 as toucher LVR restrictions would “unfairly kill off the Kiwi homeownership dream for many young people.”
“The market remains strong, yet we're seeing some slight cooling in activity exactly where it needed to come from. That's partly a reflection that perhaps first-home buyers are tiring of this market, while retail banks are already self-policing their higher-risk lending. Regardless, hopefully, the Reserve Bank is pleased with such cooling and won't have to introduce punitive lending restrictions next year,” Mayne concluded.
