Investor demand is strong in the Hutt Valley and Wellington but nationwide investors are “sitting on their hands.”
The latest BNZ-REINZ Residential Market Survey of real estate agents found the housing market is improving but with a small ease in the strength of some indicators in comparison with recent months.
The survey found a net 3% of responding agents saying they are seeing fewer investors in the market, however there were large variations on the reported amount of investor interest across the country.
The Hutt Valley was the stand out location as far as agents reporting investors active in the market, with a net 66.7% reporting investors buying.
"In Wellington's Hutt Valley investor demand is quite strong even though overall buyers are not considered to be too motivated," the report said.
Wellington and Porirua was the region with the second-most active investors, with 26.9% of agents reporting investors buying property.
Other locations where agents reported strong investor activity included New Plymouth City (20%), Waitakere City (16.1%), Other Auckland (15.8%) and Auckland City (10%).
Bucking the national trend for investors, the survey found a surge in first time buyers across the country.
"In contrast to the disinterest of investors the level of enquiry from first home buyers continues to grow with a net 28.8% of agents saying they are seeing more such buyers."
The report said this measure has been at strong levels since July, suggesting more first time buyers believe now is the right time to make a purchase.
Another measure that has seen a rise is around auction clearing rates, with a net 13.4% of agents responding that auction rates are rising. The report claims auction rates are a leading indicator of market strength in other countries, and "this result suggests that fundamentally the market remains firm."
On the issue of prices, a net 17.7% of agents report they feel average house prices are on the up, a measure that has been in positive territory since July.
After four strong months when more agents reported rising numbers of people through open homes only a net 7.7% reported a rise this month, and while more reported rises than falls, "the result does suggest some easing in the momentum of improvement."
The survey results also suggest more potential vendors are entering the market, with a net 36.8% of agents reporting an increase in the number of appraisals requested by potential vendors - a record level in the seven months the survey has been running.
"First home buyers remain keen to buy, investors are sitting on their hands, it appears to be neither a buyer's nor a seller's market, and there are signs of more potential vendors coning forward," said the report.
"We read the measures as indicating a market generally improving but showing some signs of a mild pause."