"Those contemplating listing a property would be wiser to act sooner rather than later"
The property market is active again after the Christmas break, and February is likely the best month to list your property this year, says Century 21 New Zealand owner Derryn Mayne.
“Those contemplating listing a property would be wiser to act sooner rather than later,” Mayne said.
The realtor boss’s comment comes as the Reserve Bank of New Zealand (RBNZ) reviews a public consultation on its plan to reinstate loan-to-value ratios (LVRs) this year.
Last year, the RBNZ temporarily removed LVR restrictions in response to the first COVID-19 lockdown. Lower deposit requirements have since contributed to a surge in buyers and house prices. Experts predict it will see 20% minimum deposit requirements for owner-occupiers, and possibly even 40% for property investors.
With property investors now making up around 27% of all buyers, Mayne believes putting the brakes on them will have a demonstrable impact, as has been the case in the past.
“Five years ago, when property investors were hit with a 40% deposit requirement, it took many of them out of the market and helped cool the jets somewhat. Combined with major tenancy law changes taking effect on February 11, I think we’ll soon see many Kiwis pull back from buying a residential investment property,” she said.
Mayne highlighted the strong demand due to record-low interest rates and fewer properties available for sale. However, she warned that the end of the mortgage holiday scheme will add pressure on many Kiwi families.
“Banks will endeavour to work positively with their customers, but, sadly, there will be plenty of cases where banks or homeowners have little choice but to sell the property. If we see a noticeable rise in exit or mortgage sales, that will only have a negative impact on overall house prices,” she continued.
She expects property rises in 2021 to return to a more sustainable track despite the Real Estate Institute of New Zealand (REINZ)’s December sales data showing a 19.3% increase in the average median house price over the previous year.
“When you weigh up economic uncertainty for the year ahead, a shrinking buyer pool due to borrowing restrictions, and more Kiwis surrendering their mortgages, it’s easy to see why February may well prove to be the best time to sell in 2021,” she said.
“One thing is definitely looking likely: February is set to be the last month that many first-home purchasers and property investors can get into the market with a smaller deposit. Note to prospective sellers: Don’t miss out on these highly motivated buyers.”
