Support package welcome, but low supply remains

Press Release: Harcourts

12 August 2013

New Zealand’s largest real estate group Harcourts is welcoming the government’s announcement yesterday to better support first home buyers through KiwiSaver deposit subsidies and Welcome Home Loans.

Harcourts CEO Hayden Duncan says he is in favour of any policy that makes it easier for first home buyers to enter the market.

However, Mr Duncan believes lack of housing supply and fierce competition is the number one reason some first home buyers struggle.

“Our most recent statistics show across New Zealand there are 12% fewer properties for sale than there were at the same time last year. Auckland (-10.2%) and Christchurch (-22.6%) remain the worst affected, but the Central Region (-6.9%), Wellington (-8.3%) and South Island Provincial (-9.3%) are not far behind.

“This shortage of available housing is driving prices up and making it more difficult for those not already in the property market.”

However, Mr Duncan says Harcourts’ statistics also show the number of people buying homes for the first time has not significantly reduced over the past two years.

Harcourts conducts a post transaction survey to map trends demonstrated by vendors and purchasers. The results are cumulated and allow for monthly and yearly comparison. The survey reveals in 2011 a total of 27.1% of buyers were making a first home purchase, compared with 25.4% so far in 2013.

This indicates first time buyers are still entering the property market in good numbers, Mr Duncan says.

“A first home buyer will struggle to purchase in the most popular suburbs, for example the inner suburbs of Auckland. What we are seeing is people widening the scope of where they will consider living and looking further outwards.”

This means housing stock considered less desirable in the past is now clearing. However, with the country’s overall property on hand figure down by 12%, this will not cater to the demands of our growing population for long.

Mr Duncan says low housing stock must be fundamentally addressed by reducing development fees and building costs and speeding up the consents process.

“It’s simple. We don’t have enough houses, particularly in Auckland and Christchurch, to keep up with the demand. We need to make it easier for developers. The change to KiwiSaver and Welcome Home Loans criteria is good news for some, but it is not going to alter the source of the problem.”

ENDS

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