Reaction offered to latest report
With house prices flattening overall along with government deposit schemes and changes to lending requirements, keen buyers out there this winter may finally have the opportunity to enter the property market, according to Tim Kearins, owner of Century 21 New Zealand.
Read more: "Homeownership for now is in reach of more Kiwis" – C21NZ
Kearins’ comments follow REINZ releasing its Monthly Property Report for June – a month which saw a 1.1% increase in median house prices across New Zealand month-on-month and an annual rise of 4.2% to $850,000, from $816,000 in June 2021.
“With more stock on the market, more opportunity for negotiation, and prices off their peak, for those with access to finance, there is opportunity here,” REINZ said. “Reports from real estate professionals across New Zealand suggest owner-occupiers remain strong in the market. First-home buyers are re-emerging…”
“Rents are still high, with Trade Me’s latest Rental Price Index showing median weekly rent now well above $600 in many Auckland and Wellington districts,” Kearins said. “Softening prices and more housing product coming to market is giving many tenants an opportunity to finally consider homeownership.”
And with house price caps for the First Home Grant increased and entirely removed for First Home Loans, thousands more potential first-home buyers are also now eligible for government assistance to pull together that all-important deposit.
The Century 21 leader said recent changes to the Credit Contract & Consumer Finance Act (CCCFA) regulations will also help more mortgage applicants secure lending.
“Changes to the CCCFA regulations will help but the big banks remain tough with new borrowers,” Kearins said. “However, it doesn’t all begin and end with the banks. More and more first-home buyers are discovering that mortgage brokers can deliver competitive rates and greater borrowing flexibility than traditional lenders.”
Across New Zealand, the number of residential property sales in June saw a 38.1% drop to 4,721, from 7,629 in June the prior year. The total number of properties available for sale nationally, meanwhile, rose 89.5% to 26,271, from 13,861 in June 2021
“For vendors, periods like this are a good reminder of just how important it is to engage the right agent and agency,” Kearins said. “People, not advertising, sell properties in quieter or challenging times. What’s more, with the borders back open, an international brand like Century 21 with a global reach is once again an important advantage.”
Read next: Agent more important than advertising in this market – realtor
He said that with further interest rates hikes expected in the foreseeable future, any buyers stalling to see if house prices fall much further risk paying more to service their lending.
“In recent years, many prospective first-home buyers have been locked out of the housing market,” Kearins said. “This winter they’ve finally been handed some keys and that’s great for them. There are also plenty of next-home buyers out there. A change in personal circumstances, opting for more work-life balance, or a new job, are arguably happening more than ever, and that often means a new address. For whatever reason, many Kiwis still want to buy a house.”
