There has been a substantial jump in the number of people requesting market appraisals from real estate agents, but buyer interest from overseas is continuing to decline.
The latest survey of real estate agents by economist Tony Alexander and the Real Estate Institute of New Zealand, undertaken at the end of September, shows a sharp jump in appraisal requests. This comes after five consecutive months in which the number of requests for appraisals declined.
"This is the strongest result since October last year and could be an early sign that more people are thinking about placing their property on the market," the survey's report said.
On the demand side, the survey found the number of buyer enquiries from overseas was continuing to decline.
"Unlike virtually all of our other main gauges of market strength, there is no improving trend in place [for overseas buyers] since the April-May period," the report noted.
"The popular belief remains that when the borders open up a wave of Kiwis will come back to New Zealand and that right now as they queue for MIQ spaces, they are online searching for a property to live in.
"However, given that many people bidding for MIQ spaces are already in New Zealand and wanting to secure their return before booking an overseas trip, and given the high demand and rising wages being offered offshore for staff, the extent of this wave is likely to be much smaller than people believe," it said.
The survey also found that buyer interest from investors remained in negative territory.
Agents were also seeing fewer people at open homes and auctions, although that was not surprising given the lockdown restrictions the market has been facing.
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46 Comments
Running market sentiment off a mailing list of REAs. Good heavens. What has it come to. No disrespect to TA or REAs in general, but let's look at it for what it is.
Anyway, let's look off "the rock" that is NZ and see what's going on in the river of gold called China. At the end of June, according to Reuters, 21 big listed Chinese real estate developers in Hong Kong owed $1.06 in interest for every dollar of operating earnings they generated.
With debt unable to be serviced, they will rely on more asset sales (good luck with that). At the end of last year these companies owed 68 cents of interest for every dollar compared to 40 cents 3 years ago.
If people want to bet on these debt-driven bubbles, that's their choice. It does make you wonder how deeply people think about these things.
https://www.reuters.com/world/china/chinese-property-developers-ability…
Sorry J.C. - you've clearly not been listening to the crowd.
Everyone knows NZ is different - property doubles here every 7 years and Kiwi's will never sell their (I mean the bank's) house!
Everyone knows NZ is different - property doubles here every 7 years
This is a con. The '7 year' hook comes from the bible. “You shall count seven weeks of years, seven times seven years, so that the time of the seven weeks of years shall give you forty-nine years." Leviticus 25:8
Don't take math lessons from Ashley Church or spiritual guidance from Brian Tamaki.
Look, yes property prices are crae crae. But every time the markets hit the slightest little bump in the road, the RBNZ and government jump in and save everything. They can do this forever.
Forever is a long time.
Disaster is coming for NZ, it's just a matter of time.
I think my sarcasm may have been lost on you J.C. but I appreciate your advice re: "false profits (sic)"
Haha . Funny , and very apt
It would be interested to know how much property in NZ is owned by people in or connected to property development in China.
You know when you go to auction and there's that Chinese lady on the phone bidding no matter what the price is.
Could be interesting if it turns out its all about the marginal buyer, and said marginal buyer is about to become bankrupt.
MIQ probably isn't a good guage of demand because many people abroad aren't eligible for places. ImmigrationNZ is doing its best to keep the visa and permitting system ticking along but without border reopening that demand can't impact the market.
If the requirement for self-isolation is implemented it should really drive the short-term rental market to new heights. Revenge of Airbnb!
Had a buddy who I think I can subjectively say is a "Kiwi 1%er". Based in HK for quite some time and has a swish pad in Mission Bay. He put the property on the rental market at $3K per week and I wished him luck finding a tenant. All I could imagine is perhaps 6 well-off young professionals all living in the place. Who knows what would be going on in the weekends with high-end luxury cars coming and going and the party never-ending and people with boundless energy drinking all night and talking in excitable, 'stimulated' conversation. The comments from and among the old farts walking their poodles would be gold.
More like ready for launch (as in how a rocket gets going) than a take off!
Tony Alexander is a lobbyist so.....
Roy
Who is he lobbying?
Or is that simply an unsubstantiated throw-away line?
I agree, have listened to T A recently and he is no longer an unbiased economist in my opinion, rather he is focusing on his new job, which is fine, but be aware of what his main interest now is.
I wouldn't be reading too much into the current survey.
The lock down simply pushed out vendors' timeline.
Enjoy.
That'll just be from my wife.
From Australia today ( although their cash rate is 0.1 percent) now 3 percent over loan product rate
https://www.apra.gov.au/news-and-publications/apra-increases-banks%E2%8…
I think the market is ready to flatten and this historically is initiated by patchy regional performances which has been evident in last months numbers. However, the prolonged lockdown in Auckland and shorter L4 elsewhere has confounded the latest data sets. Personally I would like to see a gentle downward trend (or at least stagnation) that continues for a good while, but I can't persuade myself that this is the start without better data. October will be revealing. Fingers crossed.
more sellers eager to take advantage of recent price increases, means prices about to level off / fall rather than “take off”…
Exactly! More supply on the market just means less people missing out on multiple houses so less FOMO driving large irrational prices.
Let us hope the lack of overseas buyer interest in residential property continues, all the way to being non existent would be my preference.
We need to wind back from the whole rentier culture that has grown in this country, and anything that begins to return us to a society of home owners, who then have a stake in society, who then contribute to an improvement in society rather than what we have come to see over the last several decades, falling home ownership and increasing breakdown of society.
Yeah, well seemingly unlike other posters here, I subscribe to Tony Alexander . . . . excellent value at $100 a year.
Numerous misconceptions amongst those posting which show they don't really have insight into what he and his reports are about. His surveys (note plural) are not only of REA (usually 350 respondents each month) but also separate monthly surveys of Investors (590), Mortgage Advisors (70), and Valuers (120) on which he reports separately.
The good thing about these surveys is it what is currently happening in the market, rather than the dated (dependent on sales going unconditional commonly 4 to 6 weeks after agreement) REINZ and CoreLogic data as to what happened in the market. There is no comparable source of information.
I thought that anyone astute wanting to really understanding what is happening in the property market would be talking to those in the business . . . which clearly he is doing.
Do I slavishly accept the survey results . . . of course not, but I critically note the range of comments and rationale and come to my own conclusions. It is either being naive or a simple bunny to outright dismiss this as a source of information.
A key question is “What are the indications as to what is happening to the market?” If I was a FHB, looking to trade up, or currently an investor I wouldn't be burying my head in the sand . . . or putting any weight on the one-line unsubstantiated opinions of posters commonly expressed on this site.
It's representative of a mailing list. Nothing more, nothing less. When your readership doesn't understand the basics of survey research, then you have a captive audience.
J.C.
If you have never asked someone in the RE sector what they think is happening to the market, then you live in a very dark space regarding what actually is happening. Clearly you rely on the Ouija board and talk around the water cooler.
Not really sure what your beef is . . . yes, it those 1100 who bother to complete his survey. To get the insight of one valuer let alone those of 120 valuers has merit . . . and the 120 valuers are just part of the 1100 plus across four sectors definitely has great value.
His survey is not intended to be what either all REA, or all valuers, or all advisors think . . . as he notes just what those and number who returned a survey think.
dp
Wow 1.06 interest to 1.00 asset - that is some massive leverage there
Great to read someone actually finally dismissing the myth of "all these buyers" waiting for an MIQ spot - then to trot swiftly to the nearest office of B & T, for that purchase of that 5 bdm Mission Bay SFR for a gazillion $$$.
The whole world is changing and you property bulls better get used to a new paradigm of government going in as "part owners" with FHB's, if you want these prices to even be sustained .....so more tax payer money to support the PPP !
Ridiculous ! .....a correction will never happen in Enzud .....because "we're diffrunt" :)
It could be interesting if supply onto market ramps up just as demand falls away. Investors are already pulling back and demand from FHB is likely to drop off after November (when new deposit limits for FHB kicks in). Also very little demand from immigrants and overseas buyers. Who’s left?
that is exactly where we are heading. And once this starts its going to drop at a rate that will make your jaw drop.
It will be spectacular lockdown viewing...way better than anything on Netflix.
Lined up perfectly with this Evergrande fiasco and the lifting of eviction moratorium in the USA. Suddenly, oversupply.
Get your popcorn out.
TA is 100% correct - we now have take-off - of interest rates that is
T Alexander has the most in-depth RE analysis based on multiple data in NZ. Most people rubbish him not knowing his analysis and I suspect out of anger, ignorance and because they're not owning a house. A few don't even understand that his article above implies it's becoming a buyers market and prices are likely to stop rising or could possibly even fall
A buyer's market you mean?
Yes indeed, corrected now
Can I be allowed to drop in a reality check into the dizzy realms of theoretical speculation?
I live in a 'leafy' inner suburb, just outside the grammar zone so what do I see around me?
The townhouse in front of me is rented out and owned by an absentee Chinese owner who is highly skilled but chooses to work in Australia where wages are higher.
The two townhouses on my northern boundary are owned by Indian immigrants and rented out.
Of the two townhouses on my southern boundary the front one is owned by Chinese and rented out.
The townhouse next to the latter is owned by Chinese and rented out.
My sister lives in a nice area of a suburb one out from my suburb in one of a block of six units of which the front one is owned and rented out by Chinese.
The unit three is owned by a mysterious overseas buyer who bought it in April this year, and is rented out.
Unit number five is owned by an absentee overseas Chinese owner and rented out.
Perhaps an economist or someone versed in the esoteric art of graphicacy can convert this concrete information into some theoretical form so that it can be more comprehensible to those on this site who prefer their data in a more abstract mode.
Auckland is very diverse. I think immigrants have embraced the "never, ever sell unless you absolutely have to" philosophy.
Very, very few people have made money predicting a market downturn. I'll never forget some commenter here, a couple of years ago, writing about a mate of his that was very, very, clever, selling up because he was convinced there was no more money to be made in property.
The people who have lost fortunes by predicting a downturn outnumber those who have lost fortunes by incorrectly predicting a boom by 10,000 to one, probably more.
But..maybe this time. All I can say is this thread reminds me of similar ones I read when I first joined up here back in 2015 and also in 2016, 2017, 2018, 2019 and 2020.
And I even sort of want a bit of a downturn but I'm not hopeful.
Streetwise
Interesting comment on the number of immigrants about you and house (ok not “home”) ownership.
Can’t recall who it was, but someone was arguing black and blue that immigrants couldn’t afford to buy a house. Clearly not au fait with either the cash requirements for business migrants or reality such as you observe.
Tony Alexander, yes I remember.
Nice marketing guy, just do not pay too much attention to his predictions, card readings.
If you look behind the reasons why there has been a substantial rise in appraisal numbers its because agents
have been doing nothing else but ringing people up and sending people online appraisals without visiting properties especially in Auckland because they cannot do much else ..Much easier to do that to crank up the numbers.. Smoke and mirrors.
Auckland's selling up.
Be slow!
Out of interest, has anyone here considered if the 165,000 new residents could impact the property market and if so how?
I think any impact will be already factored in as most have already been living here since March 2020 at the latest. So they will already be in housing of some sort, probably rentals or employer supplied accommodation.
It appears that most aren’t high income earners, although they will need to earn above the median wage ($27.00 per hour) to qualify for residency - they mainly work in areas such as horticulture or agriculture, health or education, and personal care.
They don’t need to earn above $27 an hour, as long as they have been here long enough.
If you're long term focussed...
The housing market will continue to crash against a bitcoin standard, and most people will continue to not connect the dots.
This is a monetary revolution.
"substantial jump in the number of people requesting market appraisals from real estate agents could very well mean
more listings to come,
More listing less competition, prices stable at the very least
unless buyers come out in full force as well but given Interest deductability and rate rises ,interesting times
You have to be joking with the headline "market taxiing for take-off".
Prices are already as high as a kite, and so is the market.
For as long as the central banking system continues acting as "the house" offering easy credit to the punters, the music keeps playing and so do the punters!
It's springtime and tulips are in bloom.
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