CCCFA regulations are wiping out new purchasers
One of New Zealand’s leading bodies for real estate agents has sounded the alarm over first home buyer numbers, with the new CCCFA regulations cited as the key barrier to people getting on to the housing market.
Changes in stock levels have tilted the market in favour of those looking to purchase, according to the latest data published by the Real Estate Institute of New Zealand (REINZ), but that is still not enough to get people on to the property market as new lending regulations start to bite.
Read more: Auckland property prices likely to fall in near future
The report, which surveyed active real estate agents, found that 89% of respondents said that the biggest problem for buyers is an ability to get finance.
“The Government’s Credit Contracts and Consumer Finance Act (CCCFA) changes have had a substantial impact on the residential real estate market, especially for first home buyers,” said the report.
“Whereas it was the March 23 announcement on tax changes that encouraged many investors to step back from purchasing anew, the CCCFA changes from December 01 have prevented even willing and well capitalised first home buyers and older people from making a purchase.”
A further 65% of respondents said that they had seen fewer FHBs in the market, with the report describing their numbers as having ‘virtually collapsed’ since November, despite having held steady for the whole of 2021 to that point. The CCCFA regulations came into effect on December 01.
Fears over finance have overtaken fear of over-paying and lack of listings as the major concerns for the buyer cohort.
“Worries that prices might fall have risen — meaning FOOP is up (fear of over-paying).,” said the report.
“Fewer agents report that the high level of prices is a concern for buyers, but the upward march in worries about interest rates has continued. Sixty-nine per cent (69%) of agents now say buyers are worried about rising interest rates while 89% say they are worried about the inability to get finance.”
