Recently the volume of houses sold has dropped drastically by a quarter in the past year. This has prompted the Real Estate Institute to seek for an end to the stringent lending restrictions put in place by the Reserve Bank. Unfortunately, these restrictions affect first-time buyers more then the seasoned investor. Would New Zealand House Sales continue to drop?
Records have shown that the number of houses sold in New Zealand last month fell by a quarter (24.5). As at last year July, the volume of houses sold in Auckland dropped by 30.6 percent and this is according to a current report by Real Institute of New Zealand (REINZ).
According to the chief executive of REINZ Bindi Norwell, who said that the LVR restrictions have slowed down the pace of the real estate but it was time to review same especially as it regards first-time buyers. Norwell further stated that the biggest hurdles in buying a house are the inability of people to access finance. Banks have continued to tighten their lending conditions and LVR restrictions. This has created a huge barrier that makes it very difficult for first-time buyers to access the real estate market.
Agents across the country have consistently said they have prospective buyers but access to fund has continued to hinder their desire to own a house.
The REINZ House Price Index, which evaluates the variation in the value of property in the market, has shown that the value of houses in New Zealand overall increased by 1.2%. except in Auckland. While national values increased by 7.5%, whereas in Auckland the value of houses has declined by -2.1%.
One year ago, the prices of houses in the median for July increased in all but four regions across the country. The national median price gained by 3.4% year-on-year to $518,000 and the New Zealand’s median price, except Auckland, gained 6.1% which is about $415,838 year-on-year.
However, the median price has continued to fall and the days to sell trend has also continued to ease. The House Price Index is a little bit steady for the main time but is reducing compared both twelve months ago.
The volume of houses for sale across the country rose by 1,441 (7%) compared to 12 months ago, in addition, the volume of houses for sale in the Auckland region enhanced by 2,648 (49%) which means buyers have more choices to make. Except for Auckland, the volume of houses for sale declined by 1,207 (-8%)showing the effect Auckland has on the entire picture. In July 2016, the volume of houses listed for sale increased 19% in Waikato, 11% in Wellington and 10% in the Bay of Plenty. The regions with the biggest reduction in inventory were Southland (-32 percent), Otago (-25 percent) and the West Coast (-23 percent).
Auckland has a lot of properties available for sale, because the volume properties available has risen by nearly half. The problem is the inability of purchasers being hamstrung by finance and LVR restrictions. In the lower South Island, listings have reduced which makes it harder for investors and first-time buyers to bid for properties.
The number of days to sell increased by a day in the month of July, from thirty- eight days in June to thirty-seven days in July. The number of days to sell also reduced by six days compared to July last year. For the past ten years, the minimum number of days to sell in July for Auckland has always been thirty-five days. Recently, Auckland has twenty-three weeks of inventory, an increase of thirteen weeks when compared to July last year.
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