Lending regulations adversely affect very sector of market that we're trying to protect. Photo / Brett Phibbs
Managing director, Bayleys Corporation
The lending regulations introduced by the last Government and the Reserve Bank of New Zealand over the past year have combined to adversely affect the very sector of the market that we're trying to protect.
The outer Auckland suburbs and provincial cities, which were traditionally the domain of entry-level to middle-value homes, are where first homebuyers have borne the brunt of these new regulations through fewer listings and sales.
With a proportion of first homebuyers re-entering the market now that the new Government has been finalised, and with investor-activity remaining in a flat-line state, it appears that the LVR restrictions have achieved their short-term goal of reigning in the rampant growth of a runaway housing market.
Lower mortgage lending rates over the past seven years have been a boon for those home-owners and investors who have bought during that period and have been one of the factors sustaining a huge period of growth in values.
Looking ahead to the first quarter of 2018, it's safe to say that the four main drivers of the residential property market — desire, debt, death and divorce — will still be in play, no matter what stage of the residential property cycle.
For vendors looking at selling their residential property, yes, they have missed the peak.
But there is opportunity to sell in the second-best residential property market New Zealand has seen this generation. Hold out until later next year and they may well be selling their home in the third best market seen in this generation.
CEO, Harcourts
The average house price in Auckland was $963,359 in October, an increase of 4.73 per cent when compared to the same period in 2016.
Meanwhile, sales dropped by 17.4 per cent in October when compared to October last year, and new listings were down 1.21 per cent.
What that all says to me is that the market still has plenty of buyers who are prepared to spend on the right property.
It's fair to say it has been a quiet winter, much more so than we've been used to over the past couple of years, but the figures for October are giving us strong signs that the spring wake-up is finally here.
It may be smaller and later than usual but there are clearly buyers out there returning good results for vendors.
I think a particularly volatile election campaign and a change in Government have been at least partly responsible for some of the market fluctuations we've seen over the past quarter.
Now, as both buyers and sellers have processed that election result, people are easing back into the market.
Finally, we have also seen a drop in the number of auctions in Auckland in October by 33.1 per cent year on year.
That happens because so many people believe auctions are most effective as a sales method when the market is strong.
In fact, no matter what the market is doing, an auction will always give you the best reflection of exactly where the market is and what your property is worth.
Head of Agency Operations, Ray White NZ
The third and fourth quarters of 2017 have seen a change in the real estate market, with a strong sense of caution from both buyers and sellers given the traditional election slowdown period.
In the lead-up to the election, numbers slowed across New Zealand, particularly in Auckland, with sellers electing to stay out of the market during this time.
This resulted in longer days on market for current sellers and price stabilisation in the majority of areas.
Looking ahead, we will see an increase in listings. This will allow buyers to better assess pricing levels and become more active.
Current lending criteria is still restraining the first home buyer and investment market; however, we see more property being available for these purchasers, particularly outside the Auckland region.
The new Government's position on real estate is not clear; however, the current policy will restrict some foreign buyers from being able to purchase property in New Zealand.
The full make-up of this policy is unknown, but it will have some effect, as will any pronounced change in the immigration level.
Wellington has a low level of stock and remains a strong sellers' market. Canterbury is more balanced, with numbers easing back and inventory levels increasing. In the buyer's favour, we expect no change in interest rates until late 2018.
Rental yield is holding firm and is expected to lift, which is a positive for the investment market. New compliance for rental properties may affect yield, but it is good for tenants that properties will have more liveable conditions.
Managing director, Barfoot & Thompson
The coalition Government has made it clear it sees maintaining house price stability as important, and nothing it has implemented or talked about doing since the election contradicts this position.
Against this background, market conditions that have existed since this year's second quarter — stable prices and moderate sales numbers — are unlikely to change through to the first quarter of 2018.
Auckland prices have remained stable despite the number of properties coming to market increasing, and sales numbers being lower than for the previous two years.
This combination of lower sales numbers and greater choice would normally result in falling prices, but these factors are being countered by mortgage lending rates being forecast to remain around current levels through most of 2018, and the population continuing to grow.
This growth is coming not only through external immigration but also from natural growth and the movement to Auckland from other centres.
The new environment has changed the way properties are selling at auction. Far fewer now sell under the hammer with a significant number of those that are passed in selling within a week post-auction.
Bank lending restrictions are a factor in this new development, as many potential buyers are forced into being conditional buyers, entering the process only post-auction. A big plus for auctions for vendors remains the shorter sales process timeline.
I see a positive outlook for housing in 2018: sales numbers will increase while prices will show little movement.
General manager, LJ Hooker & Harveys Group
Auckland the City of Sails is becoming the City of Snails, with motorways, schools and hospitals overflowing.
Many families are endeavouring to get on the housing ladder with others just managing to stay on it. The reason is the rising cost of living, with increased rates, insurance and a proposed 10c/litre petrol tax.
More listings will be generated as the cost of living tightens. Some Aucklanders will head to the regions for a more affordable lifestyle and to be debt-free.
Auckland is now a buyers' market with properties taking longer to sell and more stock available with a lack of urgency from potential buyers.
LVR restrictions are still having a slowing effect, especially for first home buyers and investors.
The banks are also tightening their criteria, focusing on quality lending to reduce their exposure to risk.
Some investors may choose to sell one or two or all of their rental property portfolio as changes to the Residential Tenancies Amendment Act come into effect in 2018.
This act places the onus on landlords to provide rental accommodation that is warmer, drier and safer for tenants who occupy the 500,000 rental properties across New Zealand.
Under the new act, many properties will be non-compliant. From experience, I realise many investors don't like spending money on maintenance and repairs. This might bring investment properties to the market.
This is good for availability of listings and may be helpful for first home buyers. All in all, a healthy real estate market for realistic vendors and informed purchasers.
Unlimited Potential Real Estate
Overall market activity in the areas we serve is on the increase, although at lower volumes than previous years.
There is always a surge at this time of the year; the interesting thing this time is there appears to be a multi-tiered market emerging with prime property in demand, while properties with compromises and impediments to title or construction are needing to meet the market.
When the market is on fire, everything seems to go for a premium. So things appear to be changing in that regard. The price points throughout central Auckland and the Bays are proving to be case-by-case specific.
Talk of limitations on foreign buyers has not had a major effect. There is no doubt that banking restrictions around new home buyers, investors, and the use of the bright line test have influenced overall demand. Consequently, sale volumes are down.
We note a wave of activity as baby boomers, cashing in years of capital gains, are making their next move. This demographic is becoming a large part of our business and will be for many years.
We await the proposed review of the LVR mechanism and the Reserve Bank Act and the implications around both. In the meantime, our auctions are well attended and for the most part competition remains,despite buyers' increased caution.
We don't see dark clouds on the horizon. Yes there is much spoken about the potential downside looming. The big picture for central Auckland and the Bays in particular: history shows fortune favours those who defy the current headlines.
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