First timers are drivingmarket

Demand continues to outstrip supply in the Manawatu¯ property market right now, a continuation that is proving to be the new normal that people are understanding.

Real Estate Institution of New Zealand (REINZ) spokesperson Andy Stewart says the residential house market has kicked started reallywell, ‘‘We’re not back to wherewe were pre Covid-19 but I think sales will probably reach between 50 and 60 per cent of where they were, and that’s encouraging.’’

Palmerston North City and Rangitı¯kei District both achieved new record median prices of $595,000 and $386,000 respectively during the month of April even though 27 of those days fell within the full Level 4 lockdown.

What frustrates Stewart, is the generic reports of a 15 per cent decrease in house sale prices. ‘‘People read that and they think that it’s fact, when in Manawatu¯ it’s actually not true. We are still getting very good prices right now, and the people driving the market at the moment are the first home buyers.’’

In recent weeks that momentum is continuing with new buyers out viewing across the region, such as Devyn and Alex Pekamu, a young couple who married in January and are looking to purchase their first home in Manawatu¯.

‘‘It’s quite a rocky ride, because there’s just not a lot around, and what does pop up, goes really fast,’’ says Alex. ‘‘We viewed a house on Sunday and before we walked through the door we were told there were already offers on the table.’’

The couple had moved in with parents to help with their saving, and in the month before Level 4 lockdown they were excited to finally start searching for a place to call their own.

Initially they were looking to buy in Palmerston North, then Feilding, now the couple, post lockdown, have changed their tactic and thrown their net wider, even as far aswoodville in their attempt to secure a home.

Alex says it’s heart breaking to find a house that is everything youwant but miss out on again and again.

‘‘I do think that there’s been a build-up of people through the lockdown, that have now decided they want to buy too. There seems to be more buyers than ever out there.’’

Alex says they have shopped around the banks, because it was important to understand the current interest rates and particularly the terms now on offer. ‘‘We needed to consider carefully any increases particularly in the next couple of years.’’

Mortgage Connect director and adviser Craig Seton says all buyers who had preapproval, prior to Level 4 lockdown, which would have normally been valid for three months, are now having to be rechecked and reconfirmed.

‘‘The lenders certainly are being cautious, those buyers have to reconfirm their income and their expectations around where they think their income will go in the future. Everyone does have to reconfirm their pay, their deposit, and have their kiwi saver balances changed as a result of the falling share market.’’

Mortgage Connect is not a bank, they act on behalf of clients connecting them with the banks and lenders to secure the right solutions for them. ‘‘We’ve had a lot of buyers that were approved by the banks prior to Level 4.’’

Seton sayswhile none of his clients have had banks pull their approvals as yet, it’s to be expected that job losses or reduced incomes changes their situation. ‘‘If they don’t qualify for the amount they wanted to borrow, they may have to look at other alternatives or reduce their borrowing.’’

Mortgage Connect has had a huge influx of enquiry from people wanting to continue buying, both from existing clients and new, ‘‘There’s huge demand to buy and there’s very little on the market, it doesn’t feel any different to pre lockdown,’’ says Seton.

Stewart says people are right to still get their finance preapproved, if they’re keen to secure a property they need to get their offers in early.

‘‘We viewed six properties yesterday, and today already, some of these properties have multiple offers with three or four offers on each one.’’

‘‘People are unsure about whether to put their property on the market now or to wait for a bit longer and see what happens,’’ Stewart says.

There is a continuation of insufficient supply of houses to meet the demand of buyers right now.

First home buyers like Alex and Devyn Pekamu are driving the property market at the moment. Married in January, they started searching for a property in February, now after lockdown they’re back house hunting once again.