One Govt review must be on tough deposits

Century 21 New Zealand

Thursday, 6 September 2018

“With settled house prices and interest rates staying low, buying this spring is an attractive proposition. However, for many the deposit hurdle simply remains far too high,” says Geoff Barnett, National Manager of Century 21 New Zealand.

He says reviewing the need for LVRs and lessening the deposit requirements for first-home buyers is where the Government and Reserve Bank should now put their focus.

“The real estate market has changed so a policy response from the Reserve Bank to reflect that is now well overdue. Too many first-home buyers are missing out on attaining the Kiwi dream when they shouldn’t have to anymore.”

His comments follow the Reserve Bank releasing figures showing more first-home buyers are taking out mortgages with less than a 20% deposit – helped by the LVR restrictions being eased earlier this year. However Mr Barnett believes more can be done.

“The mainstream banks are still implementing their increasingly rigorous criteria, and so for most first-home buyers getting a pre-approved mortgage with less than a 20% deposit remains just about impossible.”

He says the Reserve Bank’s recent comments that the Official Cash Rate is likely to remain low until at least 2020 gives people confidence that their mortgage commitments are not going to dramatically change in the immediate future.

He also points to a Massey University Residential Market Report released last month showing that rents have increased steadily over the past five years across the board, with the average national rent up by 25.5 percent over that time.

“Recently the Government signalled a number of changes affecting both tenants and landlords, but regardless rents are not dropping. In fact, some claim the proposed tenancy law changes could only increase rents further.

“Now’s the time to buy and in fact sell. There are always more buyers than sellers out in the market in spring, providing a great opportunity for anyone wanting to sell their property to get noticed before summer brings an avalanche of competing listings.

At the end of August, Century 21’s new listings were up 40.4% nationwide compared to the end of July, and up 47.5% compared to the end of August last year.

“The spring surge is certainly already happening for us. Regardless, at this time of year real estate companies can never get enough listings. The most frustrating thing for any real estate salesperson is that prospective buyers are coming out of the woodwork after a wet winter, but there’s just not enough stock to satisfy them.

“We’re saying to vendors, don’t wait till the New Year, go now! We’ve got the buyers many of which want to settle into their new homes by Christmas.”

Mr Barnett says many real estate companies will be running spring campaigns to try to entice people to list their homes. However, vendors wanting a successful outcome need to carefully assess an agent and agency’s ability to market a property and negotiate a great sale price.

“That’s where Century 21 New Zealand has an advantage over local competitors. No one can compete with our unbeatable global reach and reputation, international training, and sales systems,” he says.

www.century21.co.nz

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