First home buy­ers drop

Central Leader - - SITUATIONS VACANT - SU­SAN ED­MUNDS

‘‘Job done, Re­serve Bank, you've knocked out in­vestors from the mar­ket’’

Too many peo­ple have been taken out of the prop­erty mar­ket, par­tic­u­larly in Auck­land, CoreLogic says.

The prop­erty re­search firm’s head of re­search 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, first-home 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.

‘‘The num­ber of cash in­vestors is un­changed over time. They don’t care about end­ing re­stric­tions.

‘‘If they want to buy prop­erty, they just buy. [In­vestors] who need a mort­gage have dropped away con­sid­er­ably, they are at the low­est level we’ve seen since dur­ing the GFC.

‘‘Job done, Re­serve Bank, you’ve knocked out in­vestors from the mar­ket.’’

First-home buy­ers were the col­lat­eral dam­age and the mar­ket was now un­bal­anced, he said.

The num­ber of sales to firsthome buy­ers was the low­est in 20 years.

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