Increasing fear in NZ’s hot property market
Increasing numbers of prospective home buyers are being gripped by a fear of missing out (FOMO), according to the latest REINZ and Tony Alexander survey.
According to the October survey of 381 licensed real estate agents across New Zealand, FOMO is high all around the country right now, which is likely to be another factor helping to drive rising house prices.
Stoking that fear for many buyers will be recent speculation about whether or not the Reserve Bank will reintroduce restrictions on high loan-to-value (LVR) ratio home loans – a move that Quotable Value (QV) general manager David Nagel described last week as being like “déjà vu all over again”.
“While I certainly agree that New Zealand’s residential property market risks becoming even more unaffordable for first-home buyers at the rate we’re going, I do wonder if the reintroduction of the LVRs will ultimately do them more harm than good and won’t actually address the underlying cause of our overheated property market,” said Mr Nagel.
That underlying cause is a shortage of houses. With 47% of survey respondents reporting increasing numbers of people attending auctions, an additional 59% reporting growing crowds at open homes, and with low housing stock a chronic issue, it’s little wonder that buyers are experiencing FOMO.
Is there hope for the increasing number of frustrated buyers? A net 32% of the real estate agents surveyed also reported that they were receiving more requests for property appraisals with a view to selling. So we can expect to see increasing numbers of houses on the market in the coming weeks.
However, the bad news is 59% of the real estate agents surveyed are reporting increasing numbers of investors active in the property market.