Recent immigrants' role in the real estate market

Recent immigrants' role in the real estate market

First National Media Release

5 December 2011

Recent immigrants play a larger role in the real estate market than departing Kiwis

One in five First National Real Estate offices had buyer or rental tenant enquiries from recent immigrants in November, while considerably fewer people intending to leave New Zealand listed their home for sale or concluded tenancies, according to the nationwide group’s monthly residential property survey.

First National Group general manager John Stewart says, “Much has been reported recently about there being more departures than inbound migrants, but our network’s experience is that more recent arrivals are active in the market then those looking to depart.

“Perhaps I am speculating, but it may just be that a larger proportion of those departing are not property owners, while the skills and or higher net worth that immigrants typically bring sees them better able to purchase,” Stewart adds.

“After a relatively quiet October, the usual and eagerly anticipated lift in vendor requests for appraisals and subsequent listings shown in our survey this month is usual for this time of the year,” Stewart says.

“However, in most areas, buyers are frustrated by the limited numbers of good listings and they are regularly ‘fighting’ over the better properties, disregarding those less appealing or priced on the high side.
“Many people who sought appraisals in November consequently indicated they are not yet sure now is the right time to sell, reflecting again a general lack of confidence in the economy at large,” Stewart says.

“We know that if you sell and buy on the same market, there’s little if any effect. Nonetheless, seller equity is eroded at times like this and we certainly hear that concern often, as no doubt do the banks when considering subsequent loan applications.”

The survey, which measures listing levels, sales, market trends and overall activity across First National’s nationwide network, found price norms were generally lower in November compared with a year earlier across almost half of the country, a marked deterioration from October when a similar proportion reported prices were consistent with a year earlier.

As has been the case for some time, parts of the Auckland market are bucking that trend, with First National offices in Glendene, Manukau and Papatoetoe reporting prices have increased across all sized properties.

Christchurch, Timaru and Ashburton First National offices share that view across medium to large sized homes particularly, as do Gore and Papakura.

Over 40% of offices report the price drops to be most noted in the two and smaller three bedroom properties, this November compared with last.

“Interestingly, while appraisal and listing requests are markedly up over the month, the numbers at open homes and those contacting through email and at our offices seemed to slip back compared with recent months,” Stewart says.

This was not the case for First National offices in Manukau and Papakura in the north and Wanaka in the south, which experienced strong increases in all forms of enquiry along with resilience shown in Papatoetoe, Blenheim, Te Kuiti and Tauranga.

National sales volumes for November were similar to October.

There was notable interest from investors in Howick, Manukau, Alexandra, Blenheim, Motueka, Johnsonville, New Plymouth, Taumarunui and Taupo, but overall that part of the market is still subdued.
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