Not all bad news for property market

A couple of months ago I commented that getting finance for property deals was getting harder and harder to obtain and that lending criteria was tightening.

Recent conversations with a number of non-bank lenders suggest that this situation may change quite quickly.

I have come across a number of organisations who have money to lend are keen to find new business – this can only be good news, especially when you look at the latest real estate stats.

In the past week there have been releases from Barfoot and Thompon, QV and REINZ which all paint a gloomy picture of what is happening in the market.

The key messages being that vendor price expectations are too high, housing inflation has dropped from over 10% to being close to static, and the number of days to sell is increasing.

While it’s easy to be gloomy on what is happening, there are positives out there too. BNZ chief economist Tony Alexander said last week that the media are taking a too pessimistic view of the market and not reporting the positives. I tend to agree with him here.

Amongst the positives he lists are strong employment, buyers waiting on the sidelines for prices to become more affordable and rising rents.

Another new positive which, if it eventuates, will help the market is the prospect of interest rate cuts.

While it would be foolish to predict when they may happen there is an increasing likelihood that recent data releases may see this happening sooner than what we thought just a month or so ago.