Fewer people attending auctions, open homes, says survey
Buyers are stepping back from the property market for now, says an independent economist.
Tony Alexander (pictured) partnered with REINZ for its June real estate survey which gathers feedback from real estate agents throughout New Zealand on the trends they are seeing in the residential property market.
A total of 557 real estate agents took part in the survey. The results showed only 4% of agents were seeing FOMO (fear of missing out) as a factor among property buyers. But 73% reported FOOP (fear of overpaying) amongst home buyers, and fewer investors were listing their properties to market to sell.
Meanwhile, 65% of real estate agents said there were fewer people attending auctions and 49% reported there were fewer first home buyers.
Alexander said there were many factors which led to buyers laying low in the current market conditions.
“In the face of rising interest rates, tight credit availability, worries about recession, negative developments offshore, talk of a brain drain, business failures and resourcing issues in the construction sector and widespread reporting of house price falls, it’s no wonder people are avoiding property,” Alexander said.
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Alexander said for the second month in a row, 65% of real estate agents were seeing fewer people attending auctions.
“The withdrawal of people from attending auctions has been strong ever since the tightening of LVR lending rules in November and the much tighter requirements of the revamped CCCFA introduced by the government at the start of March,” he said.
“The same factors are causing people to step back from attending auctions have been at work over the same timeframe for those contemplating attending open homes. Over a net 60% of agents have reported seeing fewer people at open homes since November last year and there are no signs of this withdrawal from inspection as yet.”
Alexander said there were no signs of the return for first home buyers to the market.
“A net 49% of agents report seeing fewer first home buyers, consistent with results for all other months since November,” he said. “They feel in no hurry to make a transaction.”
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Alexander said agents were noticing fewer investors wanting to buy.
“Investor withdrawal started in 2021 when the first LVR rules returned and the tax rules were changed at the end of March. A net 65% of agents in our survey report are seeing fewer investors,” he said.
Alexander said there were fewer agents saying buyers were concerned about the availability of listings. There was also the issue of clients having difficulty getting property finance approved.
“Until these concerns are eased, our evidence suggests buyers will not return to the market until more stock is available to buy and lending regulations are loosened,” he said.
