Investors and first time buyers in ‘quiet battle' for property
Property investors are back in the market and doing battle with first home buyers for properties at the lower end of the market, according to First National general manager John Stewart.
Tuesday, July 5th 2011, 12:00AM
by The Landlord
He said he was "definitely hearing that investors are back, no question of that, and they have been for some time."
"If you look at our monthly surveys for the last five months, we would be saying the same thing insistently, that there is a quiet battle going on between first home owners or low cost family home owners and investors. It seems to be around 75-25% in those lower end markets, 75% is the new home owner, 25% is the investor, and that's really because the new home owner is very vigorous at the moment."
The First National June survey found buyers taking advantage of attractive interest rates, with cheap houses with renovation potential, houses targeted at first time buyers and entry-level family homes ranking as the fastest sellers for the majority of First National agencies.
Low mortgage rates presently offered by lenders are regarded by 50% of respondents as the catalyst for the sales and First National offices reported bargain hunters in the market.
Stewart said this month's survey saw a continuation of a trend for first time buyers to be demonstrating increased confidence that now is a good time to buy.
"First home buyers realise this is their chance. In most regions, prices have bottomed out and there are more and more multi offers. The best homes - those that are well presented and well priced - are being cherry picked," he said.
He did however suggest caution on the survey finding that investor activity has increased notably in the upper South Island.
"That's where the volume was in June 2011. [But] it's noticeable everywhere."
He also predicated as lower end properties get snapped up, there would be more temporary or casual rental properties taken off the market as people unwilling to sell for a lower price believe now may be a better time to sell.
"The trickle up effect, we'll end up with those that sold the low end houses moving up in the market, what I also think will happen is we're going to see a lot of those casual rentals, three and four bedroom homes, brick and tile, built in the last five years which people can't afford to stay in, they've had to shift, couldn't sell them so they've rented them out casually. They may see the market moving and we could see a flood of middle market, recent rentals on the casual market becoming saleable homes again."
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