First-home buyers are frantically looking for their first home to buy before investors return and potentially push prices up, agents said.
While others, the agents added, want to buy now because they feel that interest rates are not likely to go much higher and prices are near the bottom, and some just want to be in their new home by Christmas.
Lodge Real Estate managing director Jeremy O’Rourke said there was a lot of urgency from first-home buyers who wanted to buy while there was less competition from investors.
They were well aware that investors might re-enter the market under National’s well-publicised policies around the bright-line test and reinstating interest deductibility – that would make owning an investment property easier – and wanted to buy before they returned, he said.
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“First-home buyers, they read newspapers and OneRoof. They don’t have to be geniuses to work out that it’s not long until they will be in competition with investors, and they don’t need to spend much time with a real estate agent to realise they haven’t been dealing with many investors up until this point.”
O’Rourke said first-home buyers were also getting the sense that the market was either at or near the bottom and wanted to get in before prices started rising, especially as some had missed out on properties that had sold for or above the asking price. Market predictions around interest rates also either being at or near the peak were also making them feel more confident about it being a good time to get on the property ladder, he said.
Last Wednesday, Lodge salesperson Chase Gray took four groups around to show them properties and three were first-home buyers looking for properties under $750,000.
A property at 3A Denz Street, in Maeroa, would suit first-home buyers and has an asking price of $629,000. The three-bedroom home has just undergone a major renovation after being picked up for $420,000 in August, OneRoof property records show.
The three-bedroom property on Denz Street, Maeroa, has an asking price of $629,000 that would suit a first-home buyer's budget. Photo / Supplied
The Maeroa property in Hamilton has just undergone a major renovation. Photo / Supplied
Gray said many first-home buyers had started looking prior to the election because they had anticipated a change in government that would encourage investors to return.
In Canterbury, first-home buyers were also out in numbers looking for homes in the lower price range. Bayleys Canterbury general manager Rachel Dovey said first-home buyers knew investors would be the next to return to the market so were trying to buy before they did.
Properties priced between $550,000 and $600,000 in places such as Rangiora were seeing up to 50 groups through open homes, she said.
Loan Market mortgage adviser Dave Williams did not think it was the absence of investors that was the driving force behind first-home buyers being back in the market, but added that it helped create good conditions for them.
“As interest rates have gone up and house prices have gone down and they can actually buy a house for $700,000 [in Tauranga].”
However, Williams didn’t expect to see investors rushing back because while interest rates were still at 7% the numbers just didn’t add up, he said.
Harcourts salesperson Alex Dunn, who sells a lot of property in South Auckland, said there were definitely more first-home buyers in the market at the moment and a lot wanted to settle before Christmas.
“They want to have family around at Christmas time in their new home. That new year, new me, home type of thing.
“A lot of the narratives people are hearing is that this is the bottom of the market and the peak of interest rates. Either they are scared that interest rates are going to go up or they come down and prices lift up because of that.”
The recently renovated three-bedroom home on Gloaming Place, in Conifer Grove, is expected to attract first-home buyers. Photos/ Supplied
The Gloaming Place property goes to auction on November 23. Photo / Supplied
Dunn said most first-home buyers were looking in the $750,000 to $850,000 price bracket and in suburbs such as Papakura there were a lot of properties to choose from.
He has just listed a three-bedroom, one-bathroom home at 1/10 Gloaming Place, in Conifer Grove, which was bought for $600,000 in August this year, according to OneRoof records, and has undergone a big renovation. The house is being sold at auction and Dunn expected it would appeal to a lot of first-home buyers.
But Mortgage Managers mortgage adviser Stuart Wills, who runs a popular first-home buyers Facebook page, said while there was a lot of talk about first-home buyers trying to buy before investors, he wasn’t sure if in reality that was the case.
Wills said the urgency coming from first-home buyers this week was due to them trying to buy before their pre-approval for Kāinga Ora’s First Home Partner scheme closed on Thursday because it had run out of funding. Under the scheme, the first homeowner purchased a majority share in a new home with Kāinga Ora owning the minority share.
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