"First home buyers are increasingly present in the market. However, following the latest rise in mortgage interest rates they too are slowing, with investors also stepping back. To help sliding property values, perhaps it's time to widen the net," says Tim Kearins, Owner of Century 21 New Zealand.
His comments following REINZ releasing November's REINZ & Tony Alexander Real Estate Survey.
Notably, the survey reported: 'There is minimal interest in New Zealand property from people located offshore, with a net 39% of agents reporting reduced enquiries. People overseas lost interest in the New Zealand residential real estate market late in 2020 and remain disinterested.'
Mr Kearins notes that when the market was heating up, the Government limited investment to try to cool it. Now with a cooling market, he asks, is it time to reopen the doors to investment?
"Immigration remains well down, and all non-residents remain banned from buying existing Kiwi homes. Maybe it's time to carefully revisit the 2018 foreign buyer ban? At least very strategically and for parts of the country really hurting," he says.
The Century 21 leader says with the likes of Queenstown and Rotorua battling, an injection of offshore investment in those property markets would make a real difference. Other regions, or even types of housing stock, could also be made exempt from the Overseas Investment Amendment Act.
"The reality is people overseas are now looking elsewhere for investment property. We know this because our foreign buyer enquiries through Century 21's global website are well down this year," he says.
Mr Kearins says with interest rates rising and consumer and business confidence sliding, domestic demand for housing will continue to weaken. Carefully filling any obvious gaps with targeted overseas investment would help to support and sustain New Zealand's all-important property sector at this critical time.
"Sadly, New Zealand has lost appeal for overseas investors and migrants despite the Reserve Bank's assurances that our financial system remains stable. Should the Government now dangle some carrots, identify, and attract the right foreign and human capital to ensure Kiwi homeowners can weather the storm and protect their greatest asset?"
The real estate boss says securing a good real estate agent and agency has never been more important. The contracting market has led to many real estate agents exiting the industry. In contrast, Century 21 continues to expand in New Zealand, with new offices now open in Northland's Dargaville and Auckland's Epsom.