By Bernard Hickey
The BNZ-REINZ monthly survey of real estate agents in September has found more first home buyer inquiries, higher auction clearance rates and firmer agent perceptions about future prices.
BNZ Chief Economist Tony Alexander said the survey results showed the real estate market had slowly strengthened in favour of sellers over the last month, although there were possibly seasonal signs emerging of new supply about to hit the market as the Spring and Summer weather arrived.
"All of the main eight measures we use to gauge the current strength of the residential real estate market around New Zealand have strengthened over the past month, indicating that slowly but surely on average things are shifting to a sellers market," Alexander said in the monthly BNZ-REINZ survey of 561 real estate agents.
"More and more first home buyers are appearing, prices are perceived to be edging upward, and auction clearance rates are considered to be improving," Alexander said.
"However there has been a sizeable lift in potential vendors seeking appraisals of their properties, and in the opinion of agents the market balance is only marginally in favour of sellers. Regional variations remain strong," he said.
A net 31% of agents said they were seeing more people going through open homes, which was the strongest result since the survey started six months ago, although Alexander noted the survey had only been running for six months and would take a couple of years of results to get a feel for how much of this move was seasonal.
"Regardless, the trend from June, in the depths of Winter, is fairly clear. More people are kicking the tyres," Alexander said.
A net 31% of agents said buyers were following through to complete written contracts, which was the strongest on record, while a net 21% said auction clearance rates were rising.
More sellers appearing
The survey also found a net 31% of agents said more vendors were coming forward and seeking appraisals, which was a continuation of a trend seen since June.
"This result could simply be the result of Spring starting, or it could represent one of the waves of vendors we suspect could appear as the market improves."
Alexander said the survey showed little serious evidence that more rental property investors were looking to buy, apart from in Auckland, where Asian investors were seen to be more active.
Agents reported an increasing number of first home buyers, with a net 37% seeing more first homers, while a net 23% perceived prices were rising.
"This measure has turned sharply in the past three months when compared with the three month period ending in June. Back then most agents felt prices were falling," Alexander said.
A net 5% of agents believed buyers were more motivated than sellers, indicating they believed the market was swinging more to being a sellers market.
"But at a net 5% positive the latest result is low and not suggestive of sellers being able to flick properties quickly for strong prices."
48 Comments
Yes, must be annoying for all those doomsayers on thissite when property is on the way back up and interest rates going down - the opposite. Of their gloomy. Predictions
Maybe they will be forced to buy a house to live in. Horrors. They were so clever renting and watching their cash depreciate
1/2 n 1/2.....Ive said for a long time interest rates will stay low or at worst rise marginally.....house prices going up? little sign of that except in very specific very wealthy areas....the rest languish.
Cash in a depression is king.....standby for a 50% loss on property....watch your "wealth" evapourate...
regards
We can only guess at what might happen and you may be right. But in my opinion it's so unlikely that house prices will fall by such an extreme percentage as you suggest. Why would anyone sell and crystallise such a huge loss when they can sit tight and wait for the market to improve - even if it takes years?
What is more likely to happen is that house prices stagnate during an inflationary period, leading to a cumulative "loss" over some time.
In Auckland, where I live (and own our first house) my guess is that property prices are going to rise in line with inflation, as we are not building enough to create a significant oversupply and hold prices down.
Rental prices are up 3% YOY across all NZ and in Auckland probably twice that which are probably a precursor of house prices going up...but who knows. I am not an expert, that's for sure.
Ah, but your house is depreciating faster than my cash and in the meantime I can rent a better house than I can afford to buy. The break-even point for buying requires house prices to drop another 15% real (or rents to increase but that's subject to supply/demand), about 18 months away I reckon.
Unless you live in central Auckland where things are always different :-)
You better not let Margaret Mutu hear you say that, Kunst. She doesn't want any more of those foreign racist honkies flocking to New Zealand and bringing their agendas with them. Gosh, who would have ever thought that Margaret and I would have something in common, well sort of.
Margaret Mutu is concerned about immigrants with racist attitudes towards NZ Maori and Pacific peoples. Her call for some sort of screening process is impracticle and undesireable IMHO however she is quite correct, paricularly with those from UK and SA
I worked as a real estate agent and encountered overt racism from these folk on a regular basis. I would always seek to find out from buyers their reasons for coming here , motivation and requirements for property, schools etc. Many of the comments I found deeply offensive, I'm part Maori but look Pakeha. One lot I dropped back at the office with the suggestion that Queensland might suit them better. I gave it away shortly after that.
They would often say they didn't want Maori nearby or at the school their precious kids went to, that type of thing. One outfit, when asked why they decided to abandon the UK responded "too many bloody immigrants" (a bit rich given that was now what they were) turned out it was dark skinned immigrants that they hated.
It struck me their attitudes were a bit premature given that they'd only been here for five minutes but they get onto their blogs and get stuck into the racism there. Sad really.
Well put KiwiDave - being of Maori decent myself I have witnessed racism first hand from many bigots. NZ is full of them and it appears there are "many" still arriving.
Funny how people have labeled Ms Mutu racist for calling a spade a spade.
Maybe she should have balanced he views to include "non-white" racist immigrants as well - like the yellow, pink, green, blue and olive ones.
KD and DB: That needs to be said, but less gently. Unfortunately you are in the wrong forum as 75%+ of the posters here are foreign blow-ins who frequently display their lack of appreciation of the history of New Zealand. The locals and originals need to defend their heritage. 50% of the current population were not born in New Zealand and 40% of the current Auckland workforce were not born in New Zealand.
Sounds great, enjoy! Its nice your heart is still here and the fact that you still bother to be interested enough in NZ to bother to contribute opinion to this forum suggest that is so.Hopefully one day you will take the opportunity to return and truely contribute to your country. Judgeing by your contributions here, you would be an asset.
Just remember that those that have moved here and contribute their opinion are just as valid whether they are agreed with or not. I say this as also a 4th generation New Zealander and one who's desperately keen to have my daughters live the dream as 5th geners.
Good to hear, Chairman M. I'll be there next Wednesday, for a bit of a scout about before the planned shift in November, and I tell ya.... If it looks good, I might just cancel the return ticket; send in 4 weeks notice to the old landlord ( ..just love the flexibility with renting!) and bring the move forwards.
Getting warmer (hot) now. 25C today.. You'll love it here! Cost of living is much cheaper than NZ (i.e at the super markets)
I suppose you already know. If you've been renting, agents here will expect refs from previous landlords - without it they wouldn't even accept the application. As a home owner, we were lucky that we had a character ref. from our property manager..
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