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Agents Report Positive Bounce For Housing Market – Survey

“Government and Reserve Bank policies aimed at cooling down the housing market have seemingly lost some of their impact, with real estate agents now reporting a bounce,” says Derryn Mayne, Owner of Century 21 New Zealand.

Her comments follow the release of July’s REINZ & Tony Alexander Real Estate Survey. It revealed a net 53% of agents continue to feel that prices are rising in their area, compared to 32% last month. At the same time, a gross 60% feel that FOMO (fear of missing out) remains a factor for buyers – up from 51%.

The survey showed there is still a high net 52% of agents who say they are seeing fewer investors in the market.

Ms Mayne says that is to be expected given the Government is scrapping interest tax deductibility for investors. It has also extended the bright-line test to 10 years which sees any capital gains taxed if an investment property is sold within a decade.

While fewer investors are looking, the survey notably reported there is ‘no wave of investor selling underway’.

“Investors haven’t all gone. There are still plenty buying and very few are selling! Residential property remains a very safe haven for returns over the medium to long term. However, without doubt Government policy is squeezing investors and that’s really starting to impact their decision making,” she says.

Many of Century 21’s franchises nationwide oversee large property management portfolios. Some report the new Residential Tenancies Amendment Act, with its extra rules and restrictions, is seeing ‘mum and dad’ property investors opting for the likes of commercial property syndications instead.

Ms Mayne says an ongoing housing shortage and record low interest rates continue to drive buyer demand.

“We’re still seeing plenty of first-home buyers, as well as next-home buyers making the most of the low interest rates. For as long as servicing a mortgage remains, in many cases, cheaper than paying rent, there will be plenty of buyers,” she says.

The Century 21 leader says all eyes will be on REINZ’s median sales price statistics for June. One prediction, however, looks at odds with reality. Treasury’s forecast of house price growth falling to 0.9% by June 2022, as announced in May’s Budget, seems increasingly unlikely.

“It’s a very positive real estate market for the middle of winter, with many agents reporting prices on the up and strong buyer FOMO. The biggest problem for now is the lack of listings,” says Derryn Mayne.

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