Low confidence, overpricing bar buyers

Low confidence, overpricing bar buyers

Lack of confidence and overpricing were two key issues holding back property buyers in April, according to First National Group’s monthly survey.

However, the Government’s first home buyers grant through Kiwisaver may provide impetus for the winter market.

As part of the Group’s regular monthly survey, First National’s real estate principals around New Zealand were asked to comment on up to two main issues affecting sales in their regions (not just their own business).

Lack of confidence and properties being overpriced were tied, named as prime reasons in 30% of regions. Unavailability of finance was named as prime reason in 23% of locations. Offers being conditional on sale of the buyer’s own property was named as a prime reason in 20% of regions, and uncertainty around pending tax changes in 8%.

There was no significant change in trend when results from city offices were compared with regional offices.

First National Group general manager John Stewart said the Government’s first home buyers grant announced over the weekend may provide some badly-needed confidence.

" A focus on the first home buyer incentive is timely given the nervousness of some rental property owners regarding likely taxation changes in the Budget.

"It may well be that once the Budget has clarified things in that respect, that a number of presently rented properties will come on the market and be snapped up by diligent youngsters.

"Buyers particularly are sitting waiting to learn just what the Budget will mean for them - whether they will have more or less money in their pockets. Then they’ll tie that back to the messages coming from the Reserve Bank and retail banks on just when interest rates may change, by how much and especially, what is the likely direction of fixed rate money.
“New Zealanders are unique in their focus on fixed rate mortgages and until these settle back from their present highs, the family buyer, in our opinion, will stay out of the market," said Stewart.

Listings in April across First National’s offices increased slightly from March with the biggest jumps in the Bay of Plenty and Auckland regions (up to 4% each). Numbers of listings dropped slightly (by up to 2%) in Wanganui/Manawatu, Taranaki and Christchurch but were static in other regions.

Despite difficult market conditions, a healthy number of contracts were signed across the country.

First National has 70 offices across New Zealand, with around 500 salespeople.
The Group’s monthly survey measures key market indicators including buyer enquiry levels (open home attendance, emails, web views, walk-ins), listings and contracts signed.

ENDS

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