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Hi Everyone

At present the unbelievably low levels of homes for sale are the hot topic of conversation not only for us in the business (real estate agents, lawyers, insurers, bankers, mortgage brokers to name a few) but home owners and purchasers as well WHY……?????

Best educated guess….
The traditional drivers of a buoyant real estate real estate market are usually

  • Low unemployment (if you have a job you can pay a mortgage)
  • Low interest rates
  • Confidence levels
  • Stable government
  • Growth in the economy
  • High numbers of buyers

All these “drivers” exist and have for some time and the situation looks set to continue for the short term (3 years)

I believe home owners are in the enviable position of being COMFORTABLE but still remember the 07-08 crash that resulted in hardship for many. The alleviation of hardship has taken 8 – 10 years but in response to that house prices have gone up generally across the country.

Along side that the Government and Regional Councils and Banks have been under fire for

  1. lack of infrastructure foresight.
  2. new housing developments cost and timeframes
  3. The amount of money borrowed for mortgage lending
  4. LVR’s (good or bad) they are restricting various groups
  5. Reserve bank policy around the amount of money borrowed that has a home as security
  6. Household debt

As this information has been “pounded” into everyones psyche over a number of years, owners of homes have I believe become more RISK ADVERSE and are enjoying

  • Low interest rates which allows them to pay mortgages back quicker or be under less financial pressure
  • Help their children with their education costs
  • Help their children purchase a home
  • Renovate their existing home
  • Enjoy life a little more (holidays, eat out, etc..)
  • Save money

They are under no pressure to sell therefore only move when they find a better option, selling and buying on the same market is relatively risk free.

In my opinion the law makers should –

  • Relax the LVR’s for first home buyers
  • Allow investors who are purchasing a second property (one only) as their “super/retirement fund” do that without restriction, then require any further purchases to be at a higher deposit level (e.g. 40% as it is now)

Kiwis understand this type of tangible investment rather than the share market, finance company and the like.

So there it is, my opinion on WHY the real estate scene is what it is at the moment, interesting to say the least!