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First National warns stalled housing market may force many real estate agents out of industry
Real estate agency group First National has warned the stalled housing market could force agents to exit the industry and offices to close.
Property prices had fallen in July and sales volumes remained very weak, Group General Manager John Stewart said.
“The presently stalled market is affecting many areas of the economy in general terms and is clearly seen in the real estate industry," Stewart said.
“The current hiatus reflects a lack of buyer confidence for a variety of reasons. Buyers remain concerned about the likely cost of money, job security, especially in regional towns and cities, the banks' deposit demands and possible further property value drops," he said, adding many were waiting for the positive effects of tax cuts in October," he said.
"This enduring and steepening downward trend in sales volume and value is now being reflected by business comments, which is a general concern for the future," he said, adding the Reserve Bank should have considered this before its last interest rate hike.
“Such areas as are reliant on discretionary spending, particularly holiday and recreational markets, and many rural service towns have been sorely hit, especially those not involved in the dairy market."
“From an industry perspective, I anticipate further losses of staff and closures or amalgamations of real estate offices. This could be quite marked in those markets likely to be slowest to recover, should a leveling or lift occur toward or immediately beyond the end of the year, as one would normally expect."
First National's monthly survey of its 70 offices representing 450 sales people found prices dropped in 80% of its offices in at least one part of the market.
This compares with property price drops in 65% of offices in June this year. In 17% percent of regions prices were the same as July last year.
Here's more detail from the survey below.
Wellington’s northern suburbs continued their golden run from June and were the only places seeing a rise in housing prices across the board for 2, 3, and 4 bedroom homes compared to July 2009.
Volumes: Fifteen percent of offices sold more properties compared to July last year but 55% of offices sold fewer and 30% sold the same number.
Auckland featured strongly in the offices that sold more than last year. Northern Wellington was a bright spot where house sales doubled month on month.
Listings: Listings continuing on a slight downward path overall with 46% of offices reported having fewer listings compared to this time last year.
However, 37% of offices saw in increase of listings and 17% of offices saw no change. Market activity: Visits to the Group’s property website were slightly above same time last year.
General enquiry had increased in Auckland, Whakatane, Johnsonville, Tauranga, Taumaranui and Wellington. Tauranga reported more interest in lifestyle and cheaper properties.
Selection of comment: “Buyers remain reluctant” – Rotorua. “Buyers are offering much lower than the asking price. Market somewhat depressed and nobody is in a hurry to make a deal” – Timaru.
“Less buyer urgency, tightening of mortgage finance” - Nelson city.
“Banks are tightening lending criteria and apart from the deposit are now requiring last 3 months saving records” – Whangarei.
“Buyers have the power, but vendors are reluctant to meet buyers” – Howick, Auckland.
“A lack of confidence, job security, interest rate increases are all adding to speculation of market trends. Purchasers market and cash is talking with an attitude of take it or we move to something else” – Ford Baker, Christchurch.
“Very little economic confidence as recession lingers…” – Mark Stevenson, Blenheim.