Feature article
What’s stopping buyers from purchasing right now?
We spoke to buyers around the country about where they are at right now, to get some insights into wider sentiment.
Uncertainty in the market means that chances are higher you’re dealing with some hesitant buyer behaviour at the moment.
Lesley Harris, Media Director of the First Home Buyers Club understands the buyer hesitancy out there, and puts down to the perfect storm of uncertainty. The Government’s dissolution of the First Home Grant in May came out of nowhere for many, and it put people into a tizzy, she says.
“That was $20,000 off buyers’ deposits overnight (if a couple were buying a new home at $10,000 each), so that’s a good two more years of saving.”
It made potential buyers wonder what else the coalition Government might produce in 2024 in terms of new policies, she says. On top of this, news stories about first home buyers “losing their deposits” because of price falls since they had bought at the peak of the market a couple of years ago, has done nothing to assuage current buyer fears. Then add in job insecurity in the big cities, and buyers are a bit gun shy.
But for those who are not in a chain of property sales, like first home buyers starting out, they have real fire power in the current market, says Lesley. “If I were a first home buyer I wouldn’t be afraid - but I’d be looking at a short-term interest rate of 6 to 12 months.”
Trade Me Property spoke to buyers around the country about where they are at right now, to get some insights into wider buyer sentiment.
Rebecca - seeking an entry level price of $500,000+ in Tauranga
“Going to the mortgage broker was a bit terrifying to be honest. Buying solo as I am, it’s not just the rates, it’s the insurance, then there’s the builders’ reports, lawyers… it all adds up, and then there are expenses on top of that.
“To be honest, I need to get over the fear. There’s a reason why the brokers lay it all out to you, what your repayments will be. A little sacrifice goes a long way. It’s about training your brain.”
Belinda and James - looking to buy a property between $575,000 to $700,000 in South Auckland or Tauranga
“We’re not in any hurry but if we find the right thing we’ll go for it.
“With a young family, we don’t have the time or energy to go to open homes every weekend or to attend auctions. So we’re thinking of paying an intermediary property finder around $20,000 to come up with a shortlist of three good properties we can choose from, that 100% tick the box of what we’re looking for.
“A lot of agents know exactly what we’re looking for but they’ll only take action if they’re going to get 100% share of the commission and they’ll only show us their own properties.”
Ani and Mark - looking to buy in Porirua on a $650,000 budget
“The volume of listings is actually kind of low for our price bracket. We’re looking at maybe two properties every week that come on and we’ve put in offers on four houses.
“We’re definitely fearful of negative equity and being able to make mortgage payments, then also the precarious state of the job market.
“Now is the best time to buy, but the job market is a black cloud, there’s a constant state of fear. Mark and I have done this on our own, there’s no bank of Mum and Dad.”
Madeleine and Rory - $1.5 million pre approved, house hunting in the Hutt Valley and Kāpiti Coast
“The houses we like are in the $1.5 million to $1.8 million price range but we haven’t seen anything that’s tempted us to put an offer in on yet.
“It feels like vendors are wanting more than the market is prepared to pay.”
Esther and Emil - pre-approved finances of $625,000, looking in Tawa and nearby
“What we’d get in Melbourne for our budget currently is a lot better quality and a wider variety than we get here. We’ve been told many times that building is out of the question here because it’s more expensive than buying an established house. In Melbourne building was a cheaper option and building a good three bedroom house on 300 sqm of land was well within our $625,000 budget.
“We’re quite comfortable with this budget, we’re not keen to be borrowing so much and having to slave and pay it off.
“Within the first few hours of seeing the property, whether or not we’re going to make an offer, we’re getting back to the agents quickly.
“We want to know that a property will resell but I think if there’s too much interest in a property, we lose confidence, we think we’ll lose out with our budget. That’s one of the barriers that stops us from making an offer.
“Pricing is hard, all we put down is what we feel we’re willing to spend. We’re happy to walk away knowing we’ve put our best foot forward.”
Annabel - $1.5 million+, looking Miramar, Seatoun Wellington (current family home owner)
“I’m thinking of paying less for more of a house. I’d like a house with sea views, that’s dated, which might put other buyers off, but just needs some cosmetic improvements.
“Our house was worth over $2 million but prices have dropped significantly in Seatoun and all over Wellington so to get a good price it would require several people to fall in love with it and want to buy it. It would be a summer sale ideally.”
Many thanks to Wellington mortgage broker, Jenny Cheevers who helped with interviewees for this article.
Author
Other articles you might like
