The New Zealand housing market is now a record "seller's" market according to the latest monthly BNZ-REINZ Residential Market Survey.
And according to the BNZ, it looks as if investors could be set to become the main drivers of the housing market.
The survey came out on the same day that the latest REINZ monthly figures again showed strong house price inflation both nationally and in the super-hot Auckland market.
The heated state of the market has been of concern to the Reserve Bank, which is introducing "speed limits" on high loan to value lending from October 1 in an attempt to protect financial stability and to partially rein in prices - particularly in Auckland. See here for articles on LVRs.
'No good news'
The September BNZ-REINZ survey, which attracted 418 responses from estate agents "contained no good news for buyers", BNZ chief economist Tony Alexander said. (See here for Alexander's current views on interest rates and the housing market as told to interest.co.nz)
"In fact a record proportion of agents see the current market as a seller’s one and investors are increasingly becoming the driving force," he said.
"A record net 30% of responding agents feel that it is a seller’s market. In other words, buyers are queuing up and sellers can pick and choose."
Alexander said a "high" net 51% of agents felt that house prices were rising - the highest reading since the March survey.
Upward trend
"This result is in line with those for all other surveys this year but is also consistent with a clear upward trend in place since our survey started over two years ago."
Interest from investors appeared "firm" with this measure rising for the second month in a row to sit at above average levels of a net 26% positive versus a 17% average, Alexander said.
"...There is not a seasonal tendency for an increase to occur at this time of year.
"Therefore we feel confident in saying that investors appear increasingly out in force. Note however that one of our other surveys, the BNZ-Nine Rewards Consumer Trends Survey for this month showed that just a gross 5% of our 521 respondents were thinking about buying an investment property."
While agents said they were seeing more first home buyers in the market (a net 24% from 18% in August) this perception was below the net 34% average.
Investors 'key drivers'
"Therefore when one takes into account the reduction in the ability of young buyers to make a purchase caused by the Reserve Bank’s new rules, New Zealand appears increasingly headed down the same track as Australia where investors are becoming the key driving force in many markets (caused by discontent with low bank deposit rates) while first home buyers are being squeezed out," Alexander said.
A strong feature of the recent housing market has been a shortage of available listings.
The survey featured good and bad news on that front.
Sharp jump
"There has been a sharp jump in the number of agents seeing more people asking for appraisals, which on the face of it suggests more listings soon," Alexander said.
But buyers should contain their enthusiasm, he said, because the rise from a net 0% of agents seeing more seeking appraisals, to 21%, was entirely a seasonal change that was also seen clearly during 2012 and 2011.
"Therefore one cannot conclude that the shortage of listings makings things so difficult for buyers is easing."
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