BNZ survey of real estate agents finds strong first home buyer interest and Auckland leading 'next upswing in housing market.' Your experience?

A monthly survey of more than 10,000 real estate agents by Bank of New Zealand and the Real Estate Institute of New Zealand (REINZ) has found continued strong growth in the number of first home buyers, some further interest from investors, and signs of strong buyer interest in Auckland.

BNZ Chief Economist Tony Alexander said Auckland stuck out has having more motivated buyers than sellers.

"These plus other results show clearly that, as was the case in the 1990s, it is Auckland leading the country’s housing cycle upward," Alexander said in the report.

"Our March survey of over 10,000 licensed real estate agents tells us that prices are generally rising, more and more first home buyers are entering the market, investors have also started to make their presence more widely felt, and there are strong increases in the number of potential vendors seeking property appraisals," Alexander said.

"The results are firmly consistent with an upward leg in the housing cycle," he said.

The survey found a net 38% of licensed agents reported noticing more people going through open homes, the second month of strong increases following muted growth in the latter part of last year.

Clearance rates rose with a record net 23% of agents reporting auction clearance rates were improving.

"But at the same time as we can see more buyers entering the market, so too are more potential vendors thinking about listing," Alexander said, pointing to a net 39% of agents reporting  more requests for property appraisals.

A net 17% of agents reported more investors in the market and first home buyers were seen as more active in February.

"Yet again, agents report that they are noticing more first home buyers entering the market. This month a net 43% reported this compared with 49% in February," Alexander said, noting it was the second highest reading for this measure.

This is consistent with figures released by Veda Advantage yesterday showing mortgage applications in the last three months at their highest levels since 2005, with younger Generation Y home buyers among the most active.

Prices rising, but sellers more motivated

Agents on average reported they perceived prices were rising with a net 26% reporting this in March, from 24% in February.

"However, reinforcing the strong anecdotal evidence that while the market is picking up, it is not leading to aggressive bidding up of prices, a net 10% of agents this month reported that they feel sellers are more motivated to transact than buyers."

Last month a net 5% of agents reported buyers as more motivated.

"We read these oscillating results as indicating no intense feelings of pressure to move on either the buyer or seller side," Alexander said, with fewer and fewer unwilling buyers citing expectations of price declines as reason for holding back.

Auckland dominant

"A dominant feature of the regional disaggregated results is that in contrast with most of the rest of the country, Auckland areas have buyers far more motivated than sellers," Alexander said.

New Zealand recorded its biggest loss of migrants in a 12-month period since August 2001 with 38,100 leaving in the 12 months to January 31. The biggest loss of migrants was in Canterbury with an annual outflow of 3,700, while Auckland was the only region to attract a net inflow of people at 5,600.

"Wellington continues to be perceived by responding agents as having more motivated sellers, but prices nonetheless are near unanimously seen as rising," he said, adding investors were perceived as unusually active in Tauranga and Taranaki, while first home buyers are perceived as active throughout all regions.