First-home buyers are deserting the real estate market, giving up hope of buying a property in the near future, BNZ chief economist Tony Alexander says.
Releasing the BNZ-REINZ residential market survey, Mr Alexander said a net 78% of the 250 licensed real estate agents replying to the November survey reported seeing fewer first-home buyers than they had a month earlier.
The result a month ago was a net 41% of agents were seeing fewer and in September, before the Reserve Bank's new lending rules became effective, a net 24% were seeing more first-home buyers at open homes.
The Reserve Bank introduced credit controls on lending to people with deposits below 20% of a house's value - loan-to-value ratios (LVRs).
Mr Alexander said the survey result supported data from other sources showing first-home buyers were giving up hope of making a property purchase in the near future.
''But are the changes achieving the Reserve Bank's desire of limiting price rises? Only marginally.''
A net 23% of agents felt house prices were rising compared with 41% in October and 51% in September, he said.
Tellingly, a net 17% of agents felt it was now a buyer's market with sellers more motivated to transact than buyers. Last month, a net 11% felt it was a seller's market and in September, a net 30% felt that way.
The BNZ survey showed the residential market in New Zealand was taking ''quite a hit'' from the introduction of credit controls but it was aspiring first-home buyers wanting to put down roots in New Zealand who were suffering.
A net 6% of responding agents still said they were seeing an increase in investors wanting to make a purchase.
In the detailed survey results, a record net 45% of agents said they were seeing fewer people going through open homes.
There was also a sharp fall in agents seeing people completing the sales process. A net 12% reported they were seeing fewer written sales going through to be completed and buyers had backed out of deals.
Auction clearance rates had fallen - another sign of weakness, Mr Alexander said.
Requests for appraisals were rising slightly. While buyers had backed off, potential vendors appeared to not have changed their stance.
A net 8% of agents reported seeing more requests for property appraisals.
The bank asked agents a special question regarding the impact they were seeing from the LVR rules to see if there was anything happening which the survey questions were not capturing, he said.
The strongest theme was the withdrawal of first-home buyers. After that, some agents noted increased interest from investors, while many noted decreased investor interest.
Several noted strong and rising demand from offshore buyers, especially out of Asia.
