The Real Estate Institute of New Zealand (REINZ) has released its June survey of licensed real estate agents.
The report is wall-to-wall bearish, with fewer people attending open homes and auctions, collapsing buyer demand from investors and first home buyers, widespread price falls, alongside buyers displaying FOOP – the ‘fear of over-paying’ and seeing prices fall after they buy.
Below are some of the key indicators presented in the survey.
First, a net 65% of responding real estate agents said they are seeing fewer people attending auctions. In fact, the withdrawal of attendees at auctions has been strong ever since the tightening of Loan to Value Ratio (LVR) lending rules in November and the much tighter requirements of the revamped Credit Contracts and Consumer Finance Act (CCCFA) introduced by the Government at the start of March.
In a similar vein, a net 60% of agents have reported seeing fewer people at open homes since November last year:
A record 70% of real estate agents are seeing prices decline in their areas of operation. This is a sharp turnaround from seven months ago when a net 60% of agents reported that prices were rising:
FOMO (‘fear of missing out’) has virtually disappeared with only 4% of agents reporting that they can see buyers displaying FOMO:
Agents are also reporting a huge loss of buyer interest from first home buyers and investors:
Overseas buyer interest has also tanked:
Finally, rising interest rates are by far the number one concern of home buyers according to agents:
The Reserve Bank of New Zealand’s ‘forward track’ guidance suggests that the official cash rate will rise from its current level of 2.0% to 3.9% by June 2023.
If this guidance comes to fruition, then housing sentiment will collapse further and prices will crash.
