Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Buyers and investors leave market

Buyers and investors leave market

REINZ's latest housing statistics for February showed that sales for properties under $400,000 fell 17.7% compared with February 2013. Some commentators believed that LVR restrictions would force out first home buyers and allow investors to swoop in and buy up bargains. However the REINZ information shows that property investors as well as first home buyers have left the market.

This evidence is supported by data from a recent NZ Property Investors’ Federation (NZPIF) survey of members of the 20 Associations affiliated to the Federation. The NZPIF survey asked these members “has the introduction of LVR restrictions changed your thoughts on buying rental property?” 71% said these restrictions had not had any effect. Only 7.87% said they would probably buy more property because of the LVR restrictions, but 13.48% said that these restrictions would cause them to buy fewer rental properties.

Executive Officer of the NZPIF, Andrew King, said “This contradicts the perception that property investors are benefiting from the effects on the market of the Reserve Bank’s LVR policy. The number of Association members have been restricted in making property purchases by the LVR restrictions is higher than the number who stand to benefit from them. ”

An additional factor influencing first home buyers is the cost of renting.

Results of a NZPIF study in December 2013 comparing the cost of buying or renting a home found that it was $138pw cheaper to rent than to own the average New Zealand home.

"Many potential first home buyers will look at the numbers and make the decision to continue renting" says King. "The expected rise in mortgage interest rates will make renting even more advantageous. “

From 1 September 2013 to 28 February the medium rental for a three bedroom house throughout the country was $350 a week. Principal economist of the NZIER, Shamubeel Eaqub, confirmed in November that although there had been strong growth in house prices, not much growth had occurred in the level of rents. This means that, in general, landlords are not taking advantage of the current pressure on rental property.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news