Banks play hard to get as house sales slump

Taranaki Daily News - - Business -

Dif­fi­culty get­ting fi­nance is be­ing blamed for a slump in house sales.

Ex­clud­ing Auck­land, the num­ber of homes sold in New Zealand fell 10.5 per cent in March com­pared with the same time last year.

Auck­land’s sales fell 18.2 per cent year-on-year but there were still more sales in the city than there had been in four months. Gis­borne had the big­gest fall, down 33.3 per cent.

Bindi Nor­well, Real Es­tate In­sti­tute chief ex­ec­u­tive, said: ‘‘At a time when sales vol­umes are nor­mally very strong and to­tal sales fig­ures for the coun­try are typ­i­cally well over the 7000 mark, with 6938 sales this was the low­est num­ber of prop­er­ties sold for the month of March since March 2011.

‘‘De­spite some ex­tremely com­pet­i­tive mort­gage rates on of­fer from the banks and the high chance of an OCR [overnight cash rate] cut in the

New Zealand Share Mar­ket

near fu­ture, it ap­pears the leg­isla­tive changes on the hori­zon and the dif­fi­culty ac­cess­ing fi­nance are now re­ally start­ing to im­pact the hous­ing mar­ket in terms of sales vol­umes.’’

She said 15 of 16 re­gions had a fall in sales vol­umes. Only the West Coast saw more houses sell.

List­ings were also down in Fe­bru­ary and March, Nor­well said.

Mort­gage rates are at his­toric lows, which would nor­mally be con­sid­ered a boost to the prop­erty mar­ket. But bro­ker Glen McLeod said it was hard to get fi­nance deals done.

He said banks were as­sess­ing bor­row­ers’ abil­ity to pay rates al­most 4 per­cent­age points higher than were cur­rently be­ing of­fered.

Econ­o­mists at In­fo­met­rics said in­vestors were wait­ing for more in­for­ma­tion on things like the po­ten­tial for a new cap­i­tal gains tax.

Auck­land house prices fell by 2.7 per cent over the year to a me­dian $856,000. Out­side Auck­land, prices in­creased 4.5 per in the year to March.

Su­san Ed­munds

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