Investor demand strong

Investor demand strong but some first home buyers may be backing off

April BNZ-REINZ Residential Market Survey Results

Video commentary on the release is loaded here.
http://youtu.be/b3JUXsiZ_5M

The full pdf is here.
http://tonyalexander.co.nz/wp-content/uploads/2013/04/BNZ-REINZ-Survey-April-2013.pdf

All our measures of residential real estate market strength eased off slightly this month but practically the same thing happened last year so we do not take this as an early sign that the market is cooling off. The anecdotes in fact suggest the exact opposite and trends for all our measures remain upward except maybe two.

One of those is the net proportion of agents reporting that they are seeing more first home buyers. That measure has levelled off in the past year suggesting that perhaps some young buyers are pulling back from seeking a property due to availability and affordability issues. If so then that would be consistent with previous housing cycles.

But the other non-rising trend is for the measure showing the net percent of agents noticing more appraisals being sought by potential vendors. There is at best a flattening in this measure at a very low level. This is consistent with more detailed measures showing a worsening listings shortage.

A net 29% of agents feel there are more investors in the market, which is twice the average reading.

At the regional level Auckland and Canterbury stick out as by far the strongest areas. We can see some signs of things shifting more toward sellers markets in Hawkes Bay and Nelson/Marlborough. But prices are strongly seen by agents as rising everywhere except perhaps Southland and Northland.

Over this year and through 2014 we expect to see the strength in Auckland and Canterbury spreading to other regions in the country as happened during the 1990s housing cycle. This will involve some older people selling and shifting with cash for spending, and younger people leaving Auckland in particular for cheaper housing and a less traffic-impeded lifestyle elsewhere. These developments however will not stop the worsening housing crisis in Auckland for first home buyers and those at the lower end of the socio-economic spectrum.
All the best

Tony Alexander produces five regular publications.
The monthly Growing With China issues are here.
http://tonyalexander.co.nz/topics/china/
The monthly Brain Gain NZ can be located here.
http://www.braingainnz.co.nz/
The Weekly Overviews are loaded here.
http://tonyalexander.co.nz/topics/regular-publications/bnz-weekly-overview/
The monthly BNZ-REINZ Residential Market Surveys are posted here.
http://tonyalexander.co.nz/topics/surveys/bnz-reinz-survey/
The monthly BNZ Confidence Surveys are available here.
http://tonyalexander.co.nz/topics/surveys/bnz-confidence-survey/

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