Independent economist Tony Alexander has released his latest survey of New Zealand real estate agents, which seeks to gain their insights on the state of the housing market.
The key takeaways from this month’s survey is that the majority (59%) of agents are still seeing home values fall in their areas of operation. Attendance at auctions continues to decline. And around two-thirds of buyers are concerned about prices falling after they make a purchase, alongside being concerned about rising interest rates and access to finance.
ARE MORE OR FEWER PEOPLE SHOWING UP AT AUCTIONS?
Following the Reserve Bank’s tightening of monetary policy on 23 November, agents reported a substantial decline in the number of people attending auctions. Our latest survey undertaken at the end of January shows that people remain at home. A net 33% of respondents have said that they are seeing fewer people attending auctions, little changed from the net 39% of two months ago when our last survey was undertaken.
ARE MORE OR FEWER PEOPLE ATTENDING OPEN HOMES?
For the first time in a long while a key difference has emerged in what agents are noting with regard to auction attendance and open home attendance.
Whereas in this survey a net 33% said they were seeing fewer people attending auctions, a net 2% have said that they are seeing more people at open homes. This “neutral” reading is perhaps another early indicator of people pulling back from the brink they were pushed to by the Reserve Bank’s late-November policy tightening and warning of recession.
HOW DO YOU FEEL PRICES ARE GENERALLY CHANGING AT THE MOMENT?
Agents overwhelmingly feel that prices are falling. A net 59% this month have reported that prices are falling in their location. This is little different from the net 74% of two months ago and as the graph shows is consistent with price change observations broadly since early in 2022.
DO YOU THINK FOMO IS IN PLAY FOR BUYERS?
FOMO = Fear of missing out
FOMO remains absent from the New Zealand residential real estate market.
WHAT ARE THE MAIN CONCERNS OF BUYERS?
As has been the case for some time now, the top three worries which potential residential property buyers have remain high interest rates, access to finance, and concerns that prices will fall after they have bought.
The following graph shows that there is a mild trend decline underway in worries about gaining access to finance. But such access is perceived by people to be a lot more difficult than before the November 2021 tightening of LVR rules on banks and then the December introduction of changes to the Credit Contracts and Consumer Finance Act.
