SCF demise may help property market

SCF demise may help property market

Lending conditions are yet to ease for many residential property buyers, First National Groups real estate agents monthly survey shows. However the rescue of SCF investors by the Government may provide a much-needed catalyst, Group general manager John Stewart suggests.

"With the demise of SCF, investors soon to be repaid by the Government will face a new dilemma. Where should they put their money now?

"Is their money safer in the bank? Or will they inject it directly into property?

No doubt both sectors will be waiting for these decisions with bated breath.

"If the banks have a cash injection from investors that could loosen the mortgage reins, with positive flow on effects to the property market. If investors put it straight into property, it may kick start the building, the buying and the selling.

"Either way, the Government's rescue package may be the catalyst that Spring has not yet provided for the country's property market."

The First National Groups monthly survey, representing around 450 salespeople in approx 70 offices nationwide, includes buyer enquiry indicators, sales volumes, listing level measures, and buying and selling trends.

August was a very quiet month for sales and although buyers were reported as being in the driver's seat, finance and confidence were both key issues.

Just over 84% of respondents reported buyers access to finance was not improving, with around 10% reporting lending conditions were easing for their buyers.1

Summary of survey findings:

Prices House prices continued to drop from last month in 57% of the offices. Some agents reported that vendors were now basing offer acceptance on their ability to service existing mortgages rather than making a profit. In 42% percent of regions prices were the same as they had been in July. Just 1% of offices reported price increases and these only involved 4 bedroom properties.

Volumes: Sales volumes were lower in August than First Nationals 12-month average. Fifteen percent of offices sold more properties compared to August last year but 56% of offices sold fewer and 29% sold the same number.

Listings: Listing levels continued to tighten as people took their homes off the market. Nationwide, 57% of offices reported having fewer listings compared to this time last year (10 more than last month). However 35% of offices saw an increase of listings compared to the same time last year and listing levels in 13% of offices were unchanged.

Buyer enquiry Buyer enquiry levels were significantly lower than the same time last year in 58% of the offices and moderately lower in 23% of offices. Buyer enquiry was higher than August last year in just 3% of offices. For the first time since January, website enquiry over the past two weeks had dropped below the same time last year, to 73,000, around 5000 visits below August 2009. In May this year, web visits per day peaked at around 130,000, 45,000 visits per day higher than May 09.

ENDS

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