There was plenty of gloom coming from the latest survey of real estate agents by economist Tony Alexander and the Real Estate Institute of NZ.
"Agents still report the withdrawal of first home buyers and investors, weak attendance at auctions and open homes, falling prices, minimal offshore interest interest and no FOMO (fear of missing out)," the report's summary says.
The key points in the survey's results include:
- Price momentum in the market remains firmly downward for now.
- FOMO essentially disappeared from the market in February and is showing no sign of returning as yet.
- Investors remain firmly on the sidelines.
- There continues to be less and less interest in New Zealand property coming from outside the country.
- Fewer people are coming forward for appraisals of their property.
- Buyers are worried about overpaying for a property.
The main positive from the report was that although the market is in the doldrums, it's not getting any worse.
It noted that most measures were little changed from last month.
"Most results from this month's survey are very close to the previous one," the report said.
So although market sentiment is gloomy, it's not getting gloomier.
The other main positives were also about things that didn't appear to be happening.
There was no sign of a wave of distressed vendors or panic selling, either from existing home owners or investors.
"Employment is strong and very few people will find themselves paying a mortgage rate higher than the rate they had to prove to their bank they could service (the test interest rate) when they took their mortgage out some years earlier," the report said.
"Few investors are strained by rising mortgage rates and the strong jobs market means those who might be in a negative cash flow position are still able to service the demands of their investment from their wage and salary income."
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28 Comments
So Tony's conclusion here is that FHBs and investors are sitting on the sidelines because they think things aren't going to get any worse?
His comment was that that is what his survey results said.
Given the bias that now infects his articles on One Roof I cannot bring myself to read this. Opinions that appear at least, to have been bought and paid for in full.
How could this possibly be peak Gloom ? The OCR is just warming up !
A survey that confirms exactly what we are all aware of is good for the history books.
But the assumption it won't get worse has a hard question to answer. Why did it get this bad in the first place?
Tony Alexander never gave his own opinion. He was quoting the results of his survey. They showed that the gloominess was at the same level as in the previous survey. It would probably be better if commenters actually read the articles above their comments. I have taken part in a number of his surveys. He has said many times that his, and other economists predictions are worth nothing, but the reporting of survey results are a different thing. The results of the survey are what they are. If they differ from your own opinion, so be it. But don't resort to the classic personal abuse in lieu of constructive argument and debate.
But he places a lot of weight on his surveys, which is what you would expect - otherwise he wouldn't do them.
I don't think I can recall him ever taking a strong view that counters his survey results.
Personal insult deleted - Ed.
Other evidence supports your opinion of yourself, tomjones.
kidding right? ... how on earth can he say that, misleading and irresponsible ... "The main positive from the report was that although the market is in the doldrums, it's not getting any worse"
Hi Greg, I'm wondering, does Interest have any approval from T Alexander to share his findings? I'm wondering this because he is clearly going to get slayed by the posters on this site, who are surprisingly, mostly anti property.
..not anti property - anti at what it has allowed to become. Big difference.
Exactly
The news media do not need permission to discuss reports by people or bodies when those reports have been made publicly available ( in this case, published on a website). Nor should they need to ask permission - that would be a significant restriction on the freedom of the press.
anti property != anti homes
The ol' Goldilocks scenario. Not too hot. Not too cold.
I fell out of an aeroplane without a parachute and have yet to hit the ground, but I'm not any gloomier than when I fell out.
Nice one Tony
I was about to write something along the very same lines. But you came first. Upvoted :-)
Perfectly put. Normally like his analytical comments but the conclusions he draws from his surveys of late have been very one eyed.
The results are not TA's fault. They are what they are.
Not much on inflation and effect this has on families. This downturn has just started, the housing market is way over valued compared to incomes in Auckland no chance of FHB getting on the ladder, for a average wage couple to purchase a house is 10 x annual income. Who is going to bring life into this market if most of population can’t afford to buy. I know tony thinks rates will start to fall next year but no way will they go back too emergency levels or even low again until inflation is down, also missed the point that NZD has tanked 12% this year putting more pressure on inflation. The housing market is going to keep tumbling rates will continue to climb anyone who buys into this market will see deposit gone and be in negative equity this time next year.
[Personal insult deleted.-Ed.]
He deserves to be slayed. His opinions are so ridiculously biased by his vested interests, it’s ridiculous. And it’s got much worse over the past 9 months.
some of his commentary and forecasts have also been really poor over the past year.
Someone jog his memory about the predictions he made about 9 months ago for the 2022 housing market. Didn't he say it would be up +5%?
Anyone want one of my TA voodoo dolls? It might help to get all that angst out of your systems.
Peak gloom will be when everyone that took a mortgage or refinanced at 2-3% is paying over 4.9%.
334 billion in mortgage debt pulling 45 million a day out of the New Zealand economy in interest. Probably about 15 million more a day than in pre covid 2019 when market interest rates were 3-4% on 280 billion of mortgage debt
More important is that Tony Alexander is coping and has come to terms...
Does he not know that rise in interest takes time to tickle down.........appox 6 to 8 months.
It takes quite a bit of time for folks to become distressed and particularly in NZ with the prevelance of fixed rate mortgages we won't see those stressed sales for quite a while assuming rates stay at these levels.
It seems somewhat disingenuous to use this a positive when we aren't yet that far into the down cycle for distressed selling to be a feature. That said all the other negative stuff is fairly stated.
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