First-home buyers: the time has arrived
If first home buyers are waiting for the right moment to jump into the market, The Block’s auction fizzer last Sunday night was a sign that now is the time. BNZ chief economist Tony Alexander said the house price cycle ‘‘petering out’’, with help from the banks tightening their lending criteria, meant opportunities were opening up. Prices have started to stagnate, particularly in Auckland, and turnover has dropped by as much as a third, year-on-year, in parts of the country. Reserve Bank statistics show that the amount of lending being done per month to investors fell by about $1 billion between July 2015 and July 2017.
Alexander said the recent lacklustre final of The Block demonstrated that the market had changed.
‘‘The ‘profits’ from 2012 to 2016 were $232,000, $299,000, $445,000, $633,000, and $981,000. On Sunday night they totalled only $65,000,’’ he said.
‘‘Young buyers should be less willing to be talked into offering higher prices by agents who can no longer back up their claim that lots of other buyers are circling around.
‘‘The Block outcome is one of the many little things which will continue to soak into market sentiment over the coming year, giving a slight downward bias to prices on average. Mainly the effect will be to encourage some potential buyers to remain on the sidelines, give up thoughts of upshifting, and perhaps opt to do up their existing house or place funds on deposit in the bank.’’
He said first-home buyers should forget about prices trending up, forget about the unwritten calculations of how much they might make on paper in a year or three as their house increased in value, and instead focus on their desire for a family home. ‘‘Now is the time to throw in some low bids, remember that although banks are tightening up their lending criteria, priority is being given to first-home buyers.’’
The latest Real Estate Institute figures show Auckland’s median house price was down 1 per cent, year-on-year, on a seasonally adjusted basis. Outside Auckland, prices were up 7.6 per cent.
Seasonally adjusted sales were down 19.1 per cent compared to 2016. The biggest drops were in Southland, down 3.57 per cent, Northland, down 28.4 per cent, Taranaki, down 24.6 per cent and Waikato, down 23.4 per cent.
Agents are working harder for a sale.