Property stock rising, prices falling
Independent economist and speaker Tony Alexander wants mortgage advisers across New Zealand to work with their clients and educate them about property stock levels increasing.
Alexander (pictured) said sales were declining and property prices falling across the country.
“Advisers need to tell buyers to go and look their property wish-list they wrote six, 12, 18 months ago when they first started looking,” Alexander said.
“They would have scraped off walking distance to school, scraped off the easy commute, they would have compromised and compromised.”
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Alexander said he wanted to reassure advisers that no one could predict whether property prices would rise or fall in future.
“We do not know where property prices are going, and we have all proven we cannot forecast house prices. The volume of properties available is increasing and vendor expectations are becoming more reasonable too,” he said.
Alexander said there was a correction phase underway in accordance with the fixed mortgage rate increase and official cash rate rising.
“Add to that the credit crunch with the CCCFA regulations tightening and some banks experimenting with debt-to-income ratios,” he added.
The economist said it was too late for the government to backtrack on the restrictions implemented in December.
“The rush in the market is over and buyers are sitting back waiting for prices to fall further,” Alexander said.
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He said there were concerns in the New Zealand market about newer properties under construction with residents concerned about moving into a newly built, poor-quality build.
“Inexperienced, over-optimistic, and over-capitalised developers are getting into the market and their products are failing,” he said. “People wanting to get into a new property are hesitant as to whether their new home would even be completed.”
A recent REINZ survey found 45% of real estate agents said buyers had the greatest control, with areas such as Bay of Plenty increasing to 63% and Wellington at 71%.
“These areas stick out as more overvalued than other regions across the country and prices have shot up quite quickly,” he said.
