First home buyers have deserted the market in droves, according to the latest BNZ-REINZ Residential Market Survey.
And the overall mood in the market has swung so much that for the first time in a year and-a-half real estate agents are now calling this a "buyer's market".
Among the fairly low number of agent respondents - 250 - to the latest survey, a net 78% reported seeing fewer home buyers than in the previous month.
Last month the result was that a net 41% were seeing fewer first home buyers, while in September - before new "speed limits" on high loan-to-value lending were introduced - a net 24% of agents reporter they were seeing MORE first home buyers.
"This result supports data from other sources showing first home buyers giving up hope of making a property purchase in the near future," BNZ chief economist Tony Alexander said.
In terms of this now being a buyer's market for the first time in 18 months, Alexander said a net 17% of agents now say that it is a buyer’s market whereas last month a net 11% said it was a seller’s market.
"In September a net 30% said that, and the average reading is a net 7% saying a seller’s market dominates.
"...Our survey results this month show that the residential real estate market in New Zealand is taking quite a hit from the introduction of credit controls, but that it is aspiring first home buyers wanting to place roots down in New Zealand who are suffering. A net 6% of responding agents still say that they seeing an increase in investors looking to make a purchase."
Likewise, there's still a perception in the marketplace that prices will keep rising - though the support for this notion is not as strong as it has been.
A net 23% of agents feel that house prices are rising compared with 41% in October and 51% in September.
"More tellingly, a net 17% of agents now feel that it is a buyer’s market with sellers more motivated to transact than buyers. Last month a net 11% felt it was a seller’s market and in September a net 30% felt that way," Alexander said.
A record net 45% of agents this month said that they are seeing fewer people going through Open Homes. That figure has dramatically turned around from a net 24% of agents seeing more people through homes just two months ago.
"Consistent with fewer people going to open homes has been a sharp decline in agents’ experiences of people completing the sales process. A net 12% this month reported that they are seeing fewer written sales go through to being completed. Buyers have backed out of deals," Alexander said.
A net 28% of agents reported that auction clearance rates have declined, "another sign of weakness", he said.
But while buyers have backed off potential vendors appear to have not much changed their stance. A net 8% of agents report that they are seeing more requests for property appraisals, though this is down form a net 20% two months ago.
A net 6% of agents report that they are seeing more investors in the market. This is down from 9% in October and 26% in September, but only just under the average outcome of a net 16% positive.
"This is a far smaller decline and movement to a below average setting than for first home buyers and possibly tells us that funding of investment property purchases in New Zealand may not be as debt-dependent as many had been thinking," Alexander said.
A net 23% of agents feel that house prices are rising.
"Thus while first home buyers may have deserted the market in droves, upward pressure on prices persists," Alexander said.
"The latest reading is however down from a net 51% two months earlier in September and below the average outcome of a net 32%."
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