It outlined factors affecting buyer behaviour
With many reforms and other factors impacting the housing market, it is unpredictable what forecasts experts have, so the Real Estate Institute of New Zealand (REINZ) and economist Tony Alexander figured out agents' insight on the New Zealand housing market and buyer activity in October 2021.
According to the report, a net 27% of real estate agents said they saw more people seeking appraisals of their property's market value, well above the average since April last year of only 9%.
The REINZ and Alexander explained that the latest figure could be an early sign that listings would improve shortly to a degree over and above what one would expect as summer approaches and the reopening of Auckland.
However, a net 10% of agents said they saw fewer people in property auctions (a slight decrease from the net 4% in September), while a net 24% reported seeing fewer people in open homes, with the lockdown in Auckland expected to further suppress activity.
Speaking of buyer activity, a gross 70% of agents said they saw fear of missing out (FOMO) among buyers, almost the same as the result in late September of a gross 72%.
“This tells us that so far, rising mortgage rates have yet to dent the determination of people to make a purchase. But the recovery in this measure following the fall to low levels in April and May following the March 23 tax announcement affecting investors has ended,” the report said.
“Given rising interest rates, early talk of shortages being addressed, and tightening lending rules from banks, it would be unsurprising if FOMO were to start trending down fairly soon.”
Read more: Joint survey delivers latest property investor insight
Focusing on types of buyers, a net 2% of the respondents reported seeing fewer first-home buyers (FHBs) in the market aiming to purchase a property –unchanged from the previous month's net positive 3% result.
However, with rising mortgage rates and tightening credit criteria, the REINZ and Alexander claimed the measure could easily consolidate in negative territory in the coming months.
Meanwhile, since the March 23 tax announcement, agents have seen a dramatic reduction in investor activity in the residential real estate markets across New Zealand.
The report found that buyers are mostly concerned about a lack of listings, with 66% of agents having cited this factor. Meanwhile, a gross 52% of agents claimed buyers are concerned about rising mortgage costs, up from only 13% when we first asked this question in May. Understandably, a high 64% of agents said buyers are still concerned about high prices.
