Real Estate Still Flying Out The Door According To Latest Survey

“Despite the Government’s housing initiatives announced last month, aimed particularly at cooling off investors, the country’s overall real estate market remains hot,” says Derryn Mayne, Owner of Century 21 New Zealand.

Her comments come as REINZ today released April’s REINZ & Tony Alexander Real Estate Survey. It revealed a net 56% of real estate agents continue to feel that prices are rising – the same proportion as August last year. At the same time, a net 66% feel that FOMO remains a factor for buyers – also a very similar result to August.

“This is the first significant industry survey since the housing initiatives were announced on 23 March, and it supports what we’re hearing and seeing anecdotally: Overall, things are not slowing yet,” says Ms Mayne.

The survey showed a net 41% of agents have reported seeing fewer investors. This is the weakest result since our survey started in May last year, but the survey notes the flow of new investors has been easing off since December.

The Century 21 leader acknowledges some softness has appeared in specific areas with the bright-line test for investors extending to 10 years and the removal of interest cost deductibility undoubtably having some impact. However, generally the market continues to enjoy significant interest from buyers with strong sale prices still being achieved.

“I agree with REINZ’s conclusion that if the Government was seeking a substantial and sustained slowing of the residential property market then its work is not complete,” she says.

Derryn Mayne says record low interest rates continue to help drive demand for those seeking their first home, next home, or investment property. What’s more, high rents and low returns on offer in other sectors continue to make residential property an attractive option for investors despite the tougher rules.

“LVRs now at 30% for investors are also slowing a few down, but April’s holding up alright when it comes to investment purchases. Let’s not forget many are now taking their chance to get in before the deposit requirement lifts to 40% for investors on 1 May,” she says.

www.century21.co.nz

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