Home owners and investors are coping with rising mortgage rates, Tony Alexander/REINZ Report

The housing market may have hit peak gloom already, with no sign of a wave of distressed sales – Tony Alexander/REINZ survey

There was plenty of gloom coming from the latest survey of real estate agents by economist Tony Alexander and the Real Estate Institute of NZ.

“Agents still report the withdrawal of first home buyers and investors, weak attendance at auctions and open homes, falling prices, minimal offshore interest and no FOMO (fear of missing out),” the report’s summary says.

The key points in the survey’s results include:

  • Price momentum in the market remains firmly downward for now.
  • FOMO essentially disappeared from the market in February and is showing no sign of returning as yet.
  • Investors remain firmly on the sidelines.
  • There continues to be less and less interest in New Zealand property coming from outside the country.
  • Few people are coming forward for appraisals of their property.
  • Buyers are worried about overpaying for a property.

The main positive from the report was that although the market is in the doldrums, it’s not getting any worse.

It noted that most measures were little changed from last month.

“Most results from this month’s survey are very close to the previous one,” the report said.

So although market sentiment is gloomy, it’s not getting gloomier.

The other main positives were also about things that didn’t appear to be happening.

There was no sign of a wave of distressed vendors or panic selling, either from existing home owners or investors.

“Employment is strong and very few people will find themselves paying a mortgage rate higher than the rate they had to prove to their bank they could service (the test interest rate) when they took their mortgage out some years earlier,” the report said.

“Few investors are strained by rising mortgage rates and the strong jobs market means those who might be in a negative cash flow position are still able to service the demands of their investment from their wage and salary income.”

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