Property

Strong market attracting investors

There has been a jump in investor demand and activity over the last month, according to the latest REINZ/Tony Alexander survey of real estate agents.

Wednesday, November 04th 2020

Economist Tony Alexander

While all the measures of demand and price pressure rose over October, the report highlights the key change as being a firm lift in the proportion of agents noticing more investors in the market.

A net 59% of agents have reported that they are seeing more investors this month.

That’s up from 38% in October and 16% in June – and it reveals a pattern of a slow rise, followed by a jump in investor demand.

At the same time, a net 15% of agents said that they are seeing fewer investors looking to sell their properties.

The results for this measure have been negative since the question was first asked in the June survey, which suggests that investors are not flooding the market with properties in a bid to cash in on price rises.

REINZ and Alexander say the survey shows investors are becoming increasingly driven by low interest rates (covering both low mortgage rates and low term deposit rates).

Nearly 85% of agents reported that interest rate levels are a factor motivating investor demand.

In contrast, back in June when they first asked agents what the factors were motivating investor demand, 60% reported that the investors had hopes of finding a bargain.

“Only 27% report that investors are motivated by expectations that prices will keep rising – though this result is well up from just 6% in June,” REINZ and Alexander say.

The pattern of increasing investor demand is different to that for first home buyers which has been evident from the first survey in June.

REINZ and Alexander say that immediately after lockdown ended, first home buyers surged on to the market, encouraged by hopes of increased listings, mortgage interest rate reductions, and the removal of the LVRs.

In this month’s survey, a net 64% of agents report that they are seeing more first home buyers in the market.

While that’s the highest proportion reported to date, the figure has been sitting around the 60% mark since July. Over that time, it has been above that for investors every month.

Overall, the survey shows conditions remain very strong across the housing market nationwide, with all measures of demand and price pressure up.

It puts buyer interest at high levels, with 47% of agents reporting more people are attending auctions and 59% reporting more people attending open homes.

REINZ and Alexander say that, unsurprisingly, with buyer interest so strong, a net 97% of agents report prices are rising while a net 88% say buyers are gripped by FOMO (fear of missing out).

“Is there hope for the increasing number of frustrated buyers? A net 32% of agents report they are receiving more requests for property appraisals with a view to selling. So new listings numbers look like they will continue to rise.

“Of relevance for the market’s ability to keep rising is the continuing decline in reports of job worries. Only 16% of agents report that buyers are concerned about their job and income prospects, as compared to June when the figure was 48%.”

The survey results give no reason for believing that the current strong conditions around the country will be easing in the near future, Alexander adds.

Comments

No comments yet

Heartland Bank - Online 1.99
HSBC Special 1.99
The Co-operative Bank - First Home Special 2.09
HSBC Premier 2.25
ICBC 2.25
Kainga Ora - First Home Buyer Special 2.25
TSB Special 2.29
The Co-operative Bank - Owner Occ 2.29
SBS Bank Special 2.29
AIA 2.29
Westpac Special 2.29
SBS Bank Special 2.29
Heartland Bank - Online 2.35
HSBC Premier 2.35
ICBC 2.35
TSB Special 2.49
The Co-operative Bank - Owner Occ 2.59
AIA 2.59
ASB Bank 2.59
BNZ - Classic 2.59
Kiwibank Special 2.65
China Construction Bank Special 2.65
HSBC Premier 2.89
SBS Bank Special 2.99
TSB Special 2.99
AIA 2.99
ICBC 2.99
Westpac Special 2.99
BNZ - Classic 2.99
ASB Bank 2.99
China Construction Bank Special 2.99
Kiwibank Special 3.19
The Co-operative Bank - Owner Occ 3.19
Heartland Bank - Online 2.50
Resimac 3.39
Kiwibank Special 3.40
Kiwibank - Offset 3.40
Kiwibank 3.40
Select Home Loans 3.49
Bluestone 3.49
ICBC 3.69
The Co-operative Bank - Standard 4.40
The Co-operative Bank - Owner Occ 4.40
Kainga Ora 4.43

More Stories

Housing market shows possible first shoots of downward slide

Wednesday, March 03rd 2021

Housing market shows possible first shoots of downward slide

Sally Lindsay reviews the latest CoreLogic HPI data – could the property market may be heading for a slowdown?

Provincial towns worst hit by housing affordability issues

Tuesday, March 02nd 2021

Provincial towns worst hit by housing affordability issues

Houses are as unaffordable as they’ve been at any time in the past 17 years and the worst hit are provincial towns, CoreLogic’s bi-annual New Zealand Housing Affordability Report has found.

Auckland has the worst unaffordable housing market globally

Friday, February 26th 2021

Auckland has the worst unaffordable housing market globally

Auckland has the fastest-deteriorating housing affordability market globally after the average price of a home leapt $140,000 last year, the latest Demographia Housing Affordability report shows.

[Opinion] A solution for NZ's housing crisis

Tuesday, February 23rd 2021

[Opinion] A solution for NZ's housing crisis

Simon Angelo says New Zealand needs to look to a European-inspired solution to solve the housing crisis in New Zealand.