Investors ‘knocked out’ of market
Too many people have been taken out of the property market due to out of reach house prices, particularly in Auckland, CoreLogic says.
The property research firm’s head of research Jonno Ingerson said the usual winter drop in market activity had hit, and was compounded by Reserve Bank restrictions on small-deposit loans and on investors.
There was also political uncertainty ahead of the election, he said, and affordability was keeping buyers out in Auckland.
CoreLogic’s data showed that fewer people were applying to the banks for money.
‘‘That means fewer out on the street looking to buy property,’’ Ingerson said.
Real Estate Institute data showed that, in May, sales numbers in Auckland were down 27.5 per cent on the year before, and 18.4 per cent nationwide, or 13.6 per cent outside Auckland.
Ingerson said while Auckland and Christchurch property values had started to drop off, Hamilton and Tauranga’s were flattening and the strong increases seen a year ago in other parts of the country were ‘‘ancient history’’.
He said, as a percentage of sales, firsthome buyers were holding their own.
CoreLogic data shows that in Auckland, investors are 44 per cent of the market, movers 22 per cent and first-home buyers 21 per cent.
Six per cent of buyers were people who were new to the New Zealand market and paying in cash.
Nationwide, investors are 39 per cent of the market, compared to first-home buyers’ 21 per cent.
But Ingerson said given the smaller number of sales, the actual numbers of first-home buyers getting into their own properties had fallen markedly, particularly in Auckland.
Investors who needed a mortgage have dropped away to the lowest level seen since during the GFC, he siad
‘‘Job done, Reserve Bank, you’ve knocked out investors from the market.’’
First-home buyers were the collateral damage, he said.
The number of sales to first-home buyers was the lowest in 20 years.
Over the rest of the country investors had dropped out, but the effect on investors was not so bad.
The market was now unbalanced, he said. ‘‘In Auckland, we’ve taken too many people out of the market,’’ Ingerson said.