First-home buyers are scrambling to get in before LVR restrictions kick in, one broker says.
It is believed that the Reserve Bank will introduce a “speed limit” on the amount of low-deposit lending banks do, probably at the end of September.
Broker Jeff Royle said it was a flawed idea because less than 10% of all purchases had been with a deposit of 10% or less. The problem was a lack of supply, he said.
“By even mentioning these proposals all that’s happened is a panic amongst ordinary Kiwi first home buyers who are calling me and I guess others, scrambling to ‘get in’ before the restrictions take place. Whether they do or don’t doesn’t matter, it’s the threat that counts. All this does is push prices further and more dangerously, makes first-home buyers take huge risks in bidding at auctions when they really should not.”
He said he had had to dig at least one buyer out of a hole caused by fear of missing out. “The real estate industry has a lot to answer for when promoting auctions as a way to sell ordinary property. With some exceptions the only ‘winner’ at an auction is the agent.”
REINZ statistics released yesterday backed him up but the BNZ/REINZ survey of real estate agents indicated that fewer first-home buyers were in the market. The report said a record low of 18% of respondents were seeing more first-time buyers in the market, down from from 28.4% in the previous month and an average of 34%.
That report said it was possible that some were putting their purchasing ambitions on hold because of bank moves to tighten lending criteria ahead of the introduction of official restrictions.
BNZ chief economist Tony Alexander said the difference could be due to survey method. “My survey captured responses from 253 agents at a point in time. The REINZ data, if they capture first home purchases, cover a full month and is a full population measure.”
Loan Market’s departing chief executive David Hart said the Reserve Bank needed to get on with whatever it was going to do. “Everyone is concerned about LVR ratios, I wish the Reserve Bank would sort it out and let people get on with it. If they’re going to do it, they should do it. Then everyone is on the same playing field. There’s been too much talk for too long.”
Source: Landlords.co.nzcomments powered by Disqus