First-home buy­ers: the time has ar­rived

South Waikato News - - Your Local News - SU­SAN EDMUNDS

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.

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