Provinces suffer from LVR restrictions
National property market analysis - provinces suffer from LVR restrictions
Please find attached national property market analysis from New Zealand’s largest real estate group, Harcourts.
Around the country our provincial sales are showing very clearly the negative effect loan-to-value restrictions have had in these fragile markets.
Written sales are down across the board in the Central, Wellington and South Island provincial regions, however, average prices remain similar or slightly higher. This indicates it is buyers at the lower end of market who are unable to make a purchase.
In Auckland sales are also down, but for different reasons. A continued lack of new construction, combined with a growing population, is leading to a hesitancy among vendors to sell, for fear they will not be able to buy a suitable property elsewhere. Rental yields are also attractive, meaning vendors are much more likely to retain property when buying elsewhere.
In Christchurch it is a similar story, however there is hope on the horizon. Residential construction and new builds are ramping up and this will soon lead to more choice for buyers.
Construction in Auckland and Christchurch is desperately needed to ease demand and ease rising prices. The market elsewhere can only be helped by a removal of the LVR restrictions, allowing first home buyers the freedom to step on to the property ladder.