First-home buyers are keen to capitalise on market conditions
One in four real estate agents saw an increase in investor buying activity in New Zealand despite the impacts of COVID-19 on the market, according to a joint report from independent economist Tony Alexander and the Real Estate Institute of New Zealand (REINZ).
The survey showed that a net 25% of agents noticed more investors in the market this month, up from a net 16% in May. The increase might have been driven by investors' hope of cut-price deals, with 60% of agents claiming that investors were looking for bargains and 64% pointing at record-low interest rates.
“[The figure] was unsurprising, considering the low level of interest rates which investors in bank deposits are currently receiving and the hopes many undoubtedly have to purchase something more cheaply than might have been the case four months ago,” Alexander said, as reported by Landlords.
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Around half of the respondents claimed that buyers were concerned about insufficient listings in the market, while 37% said buyers were more worried about getting a loan.
However, it seems that first-home buyers still want to explore the property market despite the risks, with a net 55% of agents revealing an increase in the number of first-home buyers in the market this month.
“The upshot of examining both the demand and supply sides of the real estate turnover equation is this: Demand is still there, with more investors and first-home buyers hoping to make a purchase in the near future, offsetting the backing away of some people whose income positions mean they have had to put purchase plans on hold,” the report said.
“On the supply side, numerous factors tell us listings will not surge, but the experience during the global financial crisis (GFC) tells us they will not collapse.”
“In the end, the chances are now looking very low that residential real estate turnover will fall by anywhere near the 40% we were thinking was possible when the virus shock first hit – principally because the buyers are still there,” the report concluded.
