Agents report more first-home buyers in the market
New Zealand has handled the COVID-19 pandemic with flying colours – which is why it's not surprising that investor demand and activity skyrocketed, according to the Real Estate Institute of New Zealand (REINZ) and independent economist Tony Alexander.
The latest REINZ/Tony Alexander joint survey of real estate agents revealed that a net 59% of agents reported seeing more investors this month, a dramatic jump from 38% in October and 16% in June.
Investors are becoming increasingly driven by low-interest rates, with nearly 85% of agents reporting interest-rate levels as a factor motivating investor demand – another jump from 60% of agents in June reporting that investors had hopes of finding a bargain.
“Only 27% report that investors are motivated by expectations that prices will keep rising – though this result is well up from just 6% in June,” said Alexander and the REINZ, as reported by Landlords.
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Alexander and the REINZ said that first-home buyers surged on to the market immediately after lockdown due to increased listings, mortgage interest rate reductions, and the removal of loan-to-value ratios (LVRs).
This month, a net 64% of agents reported seeing more first-home buyers in the market, the highest figure so far as it had been sitting around 60% since July.
As buyer interest continues to become stronger, a net 97% of agents reported a rise in prices. Meanwhile, a net 88% said buyers are gripped by FOMO (fear of missing out).
“Is there hope for the increasing number of frustrated buyers? A net 32% of agents report they are receiving more requests for property appraisals with a view to selling. So, new listings numbers look like they will continue to rise,” said Alexander and the REINZ.
“Of relevance for the market's ability to keep rising is the continuing decline in reports of job worries. Only 16% of agents report that buyers are concerned about their job and income prospects as compared to June when the figure was 48%.”
