Yet real estate agents found signs of weakness after housing package announcement
The New Zealand real estate market remains red-hot despite the government’s new housing package and the return of loan-to-value ratio (LVR) restrictions this year, according to a joint survey by the Real Estate Institute of New Zealand (REINZ) and independent economist Tony Alexander.
However, according to the survey, licensed real estate agents have found signs of some easing off in the strength of the residential real estate market following the Reserve Bank of New Zealand’s (RBNZ) confirmation that LVRs were coming back at an increased deposit level of 40% for investors.
Yet the survey also found that a net 56% of 369 respondents continue to feel that prices are skyrocketing, the same proportion as in August 2020.
“This tells us that there has been no immediate downward correction in prices in response to the government’s housing policy announcements. But the result does cement in the ending of the period of rising price observations which started as soon as the nationwide lockdown ended. Between September and March, there was no overall perception of a change in pricing pressures away from upward – but that has now shifted,” the report said.
A net 66% of the respondents felt that fear of missing out (FOMO) remains, a result that has not changed much since August. A net 11% also reported seeing fewer people in auctions, reflecting observations after the housing package’s announcement and before the Easter break.
Moreover, a net 23% of the respondents reported fewer people in attendance at open homes, a sharp turnaround from the net 43% in late February who reported more people attending, and the lowest result since the survey started in May.
Derryn Mayne, the owner of Century 21 New Zealand, commented: “This is the first significant industry survey since the housing initiatives were announced on March 23, and it supports what we’re hearing and seeing anecdotally: Overall, things are not slowing yet.
“If the government was seeking a substantial and sustained slowing of the residential property market, then its work is not complete.”
