"The supply of houses just isn't there"
The mortgage space in New Zealand has proven remarkably resilient throughout the COVID-19 pandemic, but The BD Ladder’s Ben Paul says that mortgage advisers could still start to struggle - not due to the crisis, but due to a lack of housing stock.
Paul says the lack of stock has been the biggest issue facing New Zealand’s housing market for some time, and while the competition in the adviser sector increases, the number of properties to sell is quickly dwindling.
“The mortgage space is interesting, because the only thing that will slow prices down is the availability of properties,” Paul commented.
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“The mortgage adviser space may still be impacted even if the housing market is booming, because the reality is that there aren’t enough houses coming up. They’re selling fast, and the lack of stock may mean that there’s very little for the real estate agents and the advisers to sell.”
“Since the borders closed, there are a lot of returning Kiwis who are coming back from overseas ready to buy, but the supply of houses just isn’t there,” he explained.
“It’ll be interesting to see if that leads to a slowdown or not, because the demand is clearly there, and the rates are very attractive. We might see more and more people wanting to become home loan advisers, but if the market is busy, then that’ll just mean more competition - so it’ll be harder to stand out.”
Paul says the lack of housing has been the biggest issue for some time, and the problem isn’t likely to go away. He says it may also lead to a reluctance to sell for some homeowners, as there will be relatively few options that’ll make climbing another rung worthwhile.
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“I would never take a guess at the housing market, but the lack of houses is definitely the biggest issue,” Paul said.
“There are certainly less in my own local area than there have been for a while, and we went through a big boom of people cashing in. But now people are considering whether there will be anything left on the market that would be worth them selling their current property for.
“Advisers will need to start afresh, look at the market, and look at what the clients in their sector would be interested in and engage with, and then plan anew from that.”
