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ANALYSIS: <a href="https://www.oneroof.co.nz/news/44496">Last week I wrote</a> about the key results from my post-election survey of existing property investors. These included no change as yet in net intentions of buying a property, but decreased concerns about the 2021 tax changes and tenant rules, obviously driven by anticipation of them changing. I also noted a sharp rise in the proportion of those opting to sell who said it was in order to finance another purchase.This week I am able to make some comments on the early results from my first post-election survey of real estate agents around the country. One key result is that whereas in late-September 40% of agents said that buyers were displaying FOMO – fear of missing out – that has now eased off slightly to 33%.This tells me that the market is not running away on itself with people feeling time is no longer on their side. However, there is now high awareness that prices are rising. A net 35% of agents say prices are going up in their location – essentially the same as last months 38%.But when asked about the things potential buyers are concerned about, only 9% of agents said falling prices after purchase. This is my FOOP measure – fear of over-paying. Last month the reading was 13%, three months ago 28%, and six months ago 68%. The latest result is the lowest in three and a half years. People accept prices are rising.Worries about a shortage of listings have eased slightly, likely reflecting anticipation of some investors soon moving to sell their properties when the brightline test goes back from ten years to two years. Also, in recent months listings have edged up slightly.But what about investor buying specifically? The net proportion of real estate agents saying that they are seeing more of them in the market has risen to 27% from 14% last month, 0% two months ago, and a net 44% six months ago saying fewer investors were appearing. This group of buyers is becoming increasingly active.In fact, investor net buying intentions (selling subtracted out) have just risen to their highest level since January 2021. For first home buyers this is important news which reinforces my point in recent weeks.The window of opportunity for young buyers to pick and choose from a large number of properties on the market and face little competition in the auction room and tenders is closing. I don’t think the speed of that closing is necessarily that fast, not with investors still out of favour with banks to some extent and interest rates so high. But the days of first home buyers accounting for 28% of all property purchases are numbered.On another matter, Statistics NZ this week reported that the number of consents issued for new dwellings to be built in September was down 37% from a year ago. These numbers have been falling reasonably steadily on a monthly basis since October last year. Before then consents for standalone houses had been dropping away, now multi-unit development consents are headed southwards.In an environment of strong population growth this decline in new house supply can do only one thing to prices – push them higher - unless interest rates should rise firmly again. They have certainly increased from a few months ago. But with householders still feeling good job security, as each month goes by more and more people are getting used to interest rates at these non-pandemic levels.The effectiveness of monetary policy therefore at restraining the economy is to some extent easing, not strengthening. Now, imagine what will happen when rising population and falling construction meet falling mortgage rates from probably late next year. It is not surprising that other forecasters are now approaching my expectation of prices rising 10% next year from 5% this year. 2025? Probably 15% or thereabouts.Welcome to the upward leg of the house price cycle. It usually runs for about six years, and we are now entering month six. &nbsp;

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There's growing acceptance that we're in the upwards leg of the cycle.

Tony Alexander: Expect house prices to rise 10% in 2024, and 15% in 2025

ANALYSIS: Recent figures from property analysts CoreLogic show that first time buyers accounted for 27% of all house purchases in the September quarter. This is well above the long-term average of 21% and consistent with what my surveys of real estate agents and mortgage brokers started showing in February this year.Late in 2022 a net 16% of agents in the survey I run with NZHL said that they were seeing falling numbers of first home buyers. Come February a net 22% said they were seeing more and in August this measure hit a peak of a net 66 seeing increased young buyers. My latest survey produced a 55% result which is still very strong and above the average of just 12%.As discussed here since early this year, young buyers have been accelerating their purchases because prices have fallen near 18%, listings are very strong, investors were absent in open homes and auctions, and deposits had grown after a period of good wages growth and reduced spending opportunities.Now, also as already discussed here, investors are showing increased interest. But there is no investor buying frenzy underway. At the end of 2022 a net 69% of real estate agents reported in my survey that they were seeing fewer investors. Come February this eased to 41% then 13% in July before hitting exactly zero in August. &nbsp;Now, a net 26% of agents say they are seeing more investors looking to make a purchase. This is the strongest reading since just before the tax changes announced in March 2021. But it is nowhere near as high as the measure for first home buyers.Why are investors looking to buy now? They can see prices are rising, so fears of losing capital from falling prices have almost entirely disappeared. They can see the logical implications <a href="https://www.oneroof.co.nz/news/44601">discussed here last week</a> of rising demand for housing from accelerating population growth set against falling construction of new dwellings.They also anticipate the return of interest expense deductibility slowly over the next three years and this is where we get an important driver of investor demand. They are buying because they expect other investors to buy. That is how asset markets work and why share prices sometimes soar and sometimes fall away quicky.First home buyers in contrast are mainly buying because they want a secure home to live in. The primary motivations are different - but they are deeply intertwined. In fact, first home buyers are now probably looking to intensify their house search because they are reading stories about investors coming back. They anticipate higher demand, reduced choice, and higher prices.Thus, much as it seems quite reasonable to say that high mortgage rates will prevent any rapid growth in house prices in the next six months, I’m not so sure. Buying to beat price rises is a powerful motivator. For the moment this feeling of FOMO – fear of missing out – is only running at about average levels. But it may not take much to take it above 50% from the current 33% reading – meaning 33% of agents in my latest survey felt buyers were displaying FOMO.&nbsp;What might be a trigger for even more haste and FOMO? My best guess would be good news on the inflation front bringing heightened expectations of easing monetary policy next year. So, keep a eye on things such as business price setting intentions measured in the ANZ’s monthly Business Outlook Survey, general commentary about businesses finding it easy to get staff and predictions of much higher unemployment, plus changes in international oil prices.- Tony Alexander is an independent economics commentator. Additional commentary from him can be found at <a href="http://www.tonyalexander.nz/">www.tonyalexander.nz</a> &nbsp;

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First home buyers are out in force.

Tony Alexander: Why Kiwis shouldn't bet against a rapid rise in house prices

During the pandemic, both New Zealand and Australia saw very fast increases in house prices. And last year, both countries saw prices fall as interest rates started to rise. Australian house prices however are now on the rise, with New Zealand continuing to see declines. Does this mean that New Zealand house price increases are just around the corner? Or is there something fundamentally different to New Zealand property markets that will hold back a turn in market conditions.1. The Reserve Bank of New Zealand has been far more aggressive on monetary policyCentral banks around the world have taken varying approaches to controlling inflation. A key difference between the Reserve Bank of New Zealand (RBNZ) and the Reserve Bank of Australia (RBA) is the level of aggression in trying to tame inflation. RBNZ has moved a lot faster at raising rates than the RBA. As a result, price falls have been greater in New Zealand than what has been seen in Australia.Like Australia, New Zealand is likely close to its interest rate peak. This will be positive for house prices.2. Population growth is less strong in New ZealandIn both New Zealand and Australia we saw population declines during the pandemic, driven by very strong restrictions to entry. Since then, Australia’s population growth has gone back to pre-pandemic levels. This has been a key driver of price and rental growth - there are now too few homes for buyers and renters. In comparison, New Zealand’s population growth has been more subdued in comparison.Migration to New Zealand however is starting to pick up again and is expected to accelerate more this year. While this will put pressure on housing demand, it will also assist some businesses that are struggling to find workers.3. New Zealand economy is contractingMore aggressive monetary policy has had a much greater impact on slowing the economy in New Zealand compared to Australia. There is now a real risk that New Zealand will go into recession. If this is the case, ideally the Reserve Bank of New Zealand will be able to move quickly to reduce interest rates and avoid large rises in unemployment. It however may not be possible if inflation remains high. There is a lot of uncertainty around this but it is the main factor that has the potential to keep house price subdued longer.4. Construction costs are high in both countriesTrying to build a home right now in New Zealand and Australia is really difficult. Construction costs have hit record highs, driven by both supply chain problems, building material cost increases and labour shortages. While supply chains are improving and building material costs are coming down, labour is still a challenge, particularly in New Zealand.These construction challenges are leading to a shortage of homes being built. This has become very clear in Australia where rents are sky rocketing and price growth is on the move. It is yet to show up in New Zealand because migration has been comparatively a lot lower. With population growth set to pick up however, New Zealand is set to have a home shortage in the next 12 months.5. New listings in both countries are fallingIn both New Zealand and Australia, there is a shortage of new property listings. While interest rate increases have led to lower buyer activity, it has also meant that vendors are less likely to want to go to market. In Australia, this has been a key to price growth starting up again. There is simply a shortage of properties to buy, particularly given the rate of population growth. With New Zealand population increasing again, it is likely to be a similar challenge in New Zealand, pushing up prices as a result.6. Rents in New Zealand remain steady, for nowAustralian rents are now increasing at their fastest rate ever recorded. This reflects a shortage of housing compared to the level of population growth. This imbalance is now showing up in house price increases. New Zealand rents have remained comparatively stable, primarily because population growth has only recently returned to positive.This year, New Zealand is expected to see much higher levels of population growth. This will lead to more demand for housing, higher rents and higher prices.Based on what has happened in Australia, and what is set to happen in New Zealand, house price growth in New Zealand is imminent. In particular population growth is back, driving up demand for housing. Soon, it is likely this will outweigh the aggressive monetary policy that has been implemented in New Zealand. A key risk factor however is recession. Hopefully policy implemented by both the New Zealand Government and the RBNZ will avoid this occurring.&nbsp;- Nerida Conisbee is chief economist for Ray White

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Australian economist on what Kiwis can learn from the rebound in the housing market across the Tasman.

Why house price growth in New Zealand is imminent

Guide

Home staging has become an influential aspect of the selling process. While it may seem like a minor detail, the way a home is presented can make a significant impact on its perceived value and the likelihood of a successful sale. In this article, we will explore the importance of home staging and how it can benefit sellers and buyers.<h3>Home staging can be a cost-effective way to improve the value of your home.</h3>Home staging refers to the process of preparing a home for sale by arranging and decorating it in a way that appeals to potential buyers. This includes decluttering, rearranging furniture, making minor repairs, and adding decorations to create a warm and inviting atmosphere. The goal of home staging is to help buyers envision themselves living in the space, and to showcase the home's features and potential.One of the most significant benefits of home staging is that it can help to sell a home more quickly. Staged homes are often more appealing to buyers, and can help to generate more offers, leading to a faster sale. Research has shown that staged homes tend to sell more quickly and for more money than non-staged homes.Another benefit of home staging is that it can help to increase the perceived value of a property. A well-staged home creates a favourable first impression, making it more appealing to potential buyers. This, in turn, can lead to higher offers and a higher selling price.For sellers, home staging can be a cost-effective way to improve the value of their home. By investing in some minor improvements and upgrades, sellers can increase the value of their property and attract more buyers. Home staging can also help to reduce the stress of the selling process by allowing sellers to present their home in the best possible light.Real estate agents also benefit from home staging, as it can make their job easier. A well-staged home is more attractive to buyers, leading to increased interest and more showings. By presenting a home in its best light, real estate agents can help to generate more offers, making the selling process faster and more successful.In conclusion, home staging is an important aspect of the selling process, providing numerous benefits to sellers, buyers, and real estate agents. By presenting a home in its best light, home staging can help to sell a home more quickly and for more money, making it a valuable investment for sellers and a key tool for real estate professionals.

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We explore the importance of home staging and how it can benefit sellers and buyers

The Importance of Home Staging in the Selling Process

As a boutique real estate agency, we understand the importance of staying up-to-date on current property market trends and conditions. One of the most significant factors that affects the property market in New Zealand is mortgage rates. In this article, we will explore how changes in mortgage rates can impact the New Zealand property market, and what this means for buyers, sellers, and real estate professionals.Mortgage rates are the interest rates charged by banks and other financial institutions for lending money to buy a property. In New Zealand, the official cash rate set by the Reserve Bank of New Zealand (RBNZ) is the benchmark for mortgage rates. When the RBNZ raises or lowers the official cash rate, it directly impacts the interest rates charged by banks and other lenders.When mortgage rates are low, it makes borrowing money to purchase a property more affordable, leading to increased demand for property and a more competitive market. On the other hand, when mortgage rates are high, it makes borrowing money more expensive, potentially reducing the demand for property.In recent years, New Zealand has seen a low-interest rate environment, which has helped to stimulate the property market, particularly for first-time buyers who are able to enter the market more easily. However, the low mortgage rates have also contributed to higher property prices.For sellers, low mortgage rates provide an excellent opportunity to sell their property, as there is a higher demand for property in the market, which can lead to multiple offers and competitive bidding.As real estate professionals, it is essential to stay informed on changes in mortgage rates and their impact on the property market. This information helps us to provide our clients with up-to-date market insights and advice on buying, selling, and investing in property.In conclusion, mortgage rates play a significant role in determining the state of the property market in New Zealand. As real estate professionals, it is crucial to stay informed on changes in mortgage rates and their impact on the market to provide the best advice and guidance to our clients.

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Learn about how mortgage rates impact the New Zealand property market.

The Influence of Mortgage Rates on the NZ Property Market

When buying or selling a property, choosing the right real estate agent can make all the difference. A good real estate agent can provide you with expert guidance, support, and expertise, making the process of buying or selling a property much smoother and less stressful. But with so many real estate agents to choose from, how do you know which one is right for you? Here are some tips to help you choose the right real estate agent for you.<h3>Look for Experience</h3>Experience is key when it comes to choosing a real estate agent. Look for an agent who has a proven track record of success, and who has experience in the specific type of property you are looking to buy or sell. This will give you peace of mind knowing that you are working with someone who has the knowledge and expertise to help you achieve your goals.<h3>Check Their Reputation</h3>Reputation is important when choosing a real estate agent. Look for an agent who has a good reputation in the industry, and who has positive reviews from past clients. You can also ask for recommendations from friends and family, or check online for reviews.<h3>Ask About Their Communication Skills</h3>Good communication is essential when it comes to buying or selling a property. Look for an agent who is responsive and easy to communicate with, and who will keep you informed throughout the process.<h3>Find Out About Their Marketing Strategy</h3>A good real estate agent will have a strong marketing strategy in place to ensure that your property is seen by as many potential buyers as possible. Find out about their marketing approach and ask to see examples of their past campaigns.<h3>Look for a Good Fit</h3>It's important to find a real estate agent who you are comfortable working with, and who you can trust. Look for an agent who listens to your needs, and who takes the time to understand your goals and expectations.<h3>Consider Their Fees</h3>Finally, consider the fees charged by the real estate agent. Make sure you understand their commission structure, and that you are comfortable with the fees they charge.In conclusion, choosing the right real estate agent can make a big difference when buying or selling a property. By looking for an experienced and reputable agent with strong communication skills, a good marketing strategy, and a good fit for you, you can ensure that you have a smooth and stress-free experience.

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Choosing the right real estate agent can make all the difference.

How to Choose the Right Real Estate Agent for You

Buying a property can seem like a stressful process, especially for first-time homebuyers. With so many factors to consider, from budgeting and property inspections to negotiating the sale and settlement, it's easy to feel overwhelmed. But with the help of a good real estate agency, the property buying process can be made simple and manageable.A good real estate agency can provide expert guidance and support throughout the entire property buying process, making it easier for you to achieve your goal of homeownership. Here's how:<h3>Determining Your Budget</h3>The first step in the property buying process is to determine your budget. A good real estate agency will help you determine what you can afford, and will provide you with a pre-approval for a mortgage if needed. This will give you a clear understanding of what you can spend, making the property search process much easier.<h3>Finding the Right Property</h3>Once you know your budget, a good real estate agency will help you find the right property for you. They will take into consideration your specific needs and requirements, such as location, size, and features, and will search for properties that match. This will save you time and effort in searching for properties on your own.<h3>Negotiating the Sale</h3>When you find a property you like, a good real estate agency will help you make an offer to the seller and negotiate the price and terms of the sale. They will have the experience and knowledge to ensure that you get the best deal possible.<h3>Property Inspections</h3>Before purchasing the property, it is important to have a building inspection and obtain a Land Information Memorandum (LIM) report in New Zealand, or a pre-purchase building and pest inspection in Australia. A good real estate agency will arrange for these inspections and provide you with a detailed report, giving you peace of mind about the condition of the property.<h3>Closing the Sale&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</h3>Once the offer is accepted, a good real estate agency will guide you through the process of closing the sale. They will help you arrange for insurance and transfer the property into your name, and will ensure that all the necessary paperwork is completed accurately and on time.<h3>Moving In</h3>After the sale is closed, a good real estate agency will assist you with the process of moving into your new home. They will provide you with information about the property, and answer any questions you may have.In conclusion, a good real estate agency can make the property buying process simple and manageable by providing expert guidance and support throughout the entire process. From determining your budget to closing the sale and moving in, a good real estate agency will ensure that you have a smooth and stress-free experience when buying your first home.

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Learn how a good real estate agency can make the property buying process simple and manageable. 

The Buying Process: How a Good Real Estate Agency Can Make it Simple

Buying property in New Zealand and Australia can be a complex process, but with the right preparation and guidance, it can be a rewarding experience. Here is a guide to the steps involved in purchasing a property in both countries:<h3> Buying a property in New Zealand</h3> Determine your budget Figure out how much you can afford to spend on a home and get pre-approval for a mortgage if needed. Find a real estate agent A good real estate agent can help you navigate the buying process and find properties that match your needs and budget. Search for properties Look for properties in areas that you are interested in, and attend open homes to get a feel for the properties and the neighbourhood. Make an offer When you find a property you like, make an offer to the seller. Your real estate agent can help you negotiate the price and terms of the sale. Get a building inspection Before purchasing the property, it is important to get a building inspection to make sure the property is in good condition and there are no major issues. Obtain a LIM report A Land Information Memorandum (LIM) report provides information about the property, such as the council’s view on the property's compliance with building regulations, any outstanding rates, and other relevant information. This is usually carried out by your solicitor.&nbsp; Obtain a title search This report will show you who owns the property and any restrictions or encumbrances that may affect the property. This step is also typically carried out by your solicitor.&nbsp; Close the sale Once the offer is accepted, the contract is signed and you arrange for a settlement date. You will also need to arrange for insurance and transfer the property into your name. At this stage, the contract is considered “unconditional”. Move in Congratulations! You are now a homeowner. Enjoy your new home and make sure to take care of any maintenance or repair needs as soon as they arise.<h3> Buying a property in Australia &nbsp;</h3>Determine your budget Figure out how much you can afford to spend on a home and get pre-approval for a mortgage if needed. Find a real estate agent A good real estate agent can help you navigate the buying process and find properties that match your needs and budget. Search for properties Look for properties in areas that you are interested in, and attend open homes to get a feel for the properties and the neighbourhood. Make an offer When you find a property you like, make an offer to the seller. Your real estate agent can help you negotiate the price and terms of the sale. Get a building inspection Before purchasing the property, it is important to get a building inspection to make sure the property is in good condition and there are no major issues. Obtain a pre-purchase building and pest inspection This report will provide information about the property's structural integrity and the presence of pests or termites. Obtain a contract of sale This document outlines the terms and conditions of the sale, including the price, settlement date, and any special conditions. Exchange contracts Once the contract of sale is signed by both parties, the sale becomes legally binding. Settle the sale On the settlement date, you will need to pay the remaining balance of the purchase price and take ownership of the property. Move in Congratulations! You are now a homeowner. Enjoy your new home and make sure to take care of any maintenance or repair needs as soon as they arise. These are the steps involved in buying a property in New Zealand and Australia. It is recommended to seek the advice of a financial advisor or a lawyer to ensure that you fully understand the process and your rights as a homeowner.&nbsp; As always, the team at Executive Real Estate are here to help you, every step of the way. Speak to one of our property specialists today to learn more about buying or selling property.&nbsp; &nbsp;

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Learn the steps involved in purchasing a property in New Zealand and Australia with our guide.

The Property Buying Process in NZ & Australia

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