NZ Housing Market: More Home Buyers Using Escape Clauses
March 15th, 2010
Buyer interest is high but commitment is low in what’s looking like a gloomy property market. First National says across the market there is a reticence to commit to paper and those who do are increasingly using escape clauses to get out of agreements. The company says “buyers are not only doing their homework well but support services, such as building inspections, and banks are having increasing influence. Minor repairs that may have been accepted six months ago are now causing contracts to fall over while funders are demanding greater equity than in the past, limiting prospective purchasers, especially in the lifestyle and rural markets, but also in the urban centres.”
First National says it’s tough for many sellers and there are compelling reasons for general market uncertainty and tightening household budgets. Unemployment, shortened work hours, the festive season, holiday costs and general rural income uncertainty along with disquiet over Govt-led tax change proposals are all affecting general confidence.
It notes buyer enquiries have dropped in multiple regions, and middle sector house sales also appear to remain stalled, often due to the owner’s lack of equity due to falling values First National says it may be spring before there’s a recovery in demand. “People who need to sell for financial and career reasons and those developing an investment portfolio will in the main be the movers this year.”
First national’s market trends
• Increased investor activity noted in Whanganui, Geraldine, Otaki and south Auckland.
• Rural sales still quieter than usual in all regions and even where interest in purchasing exists, banks are scuttling most propositions.
• Fewer buyers seeking lifestyle and coastal properties.
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