Welcome to Ray White Parnell's monthly market update. All Statistical infomration is gathered from both REINZ Statistics & Ray White Parnell Statistics. Any questions please dont hisitate to contact us: 09 - 379 7066
Article: CCCFA Changes 17 Ray White Parnell 18 Meet the team
The New Zealand property market has experienced a slowdown in April 2023, according to REINZ Chief Executive Jen Baird. This is largely due to public and school holidays, as well as the tight economy, which are continuing to affect the market. However, Baird emphasizes that there is some good news amidst the slowdown.
Despite median prices decreasing across the country, they are now moderating, and inventory levels have stabilized. Although sales counts have eased annually, there are reports of green shoots in the market. Baird notes that "our members are seeing further alignment as vendors come with a desire to meet the market – those who are prepared to negotiate and be realistic are the ones selling, there are buyers out there ready to buy. Two districts reached record median prices in April."
Nationally, the median price for April 2023 decreased by 10.9% year-on-year to $780,000. The days to sell have risen to 47 days, only an increase of 2 days compared to March 2023. Baird reports that "Salespeople across the country are
reporting positive signs in the market this month as first home buyers show more interest after the Reserve Bank’s announcement on the easing of LVR restrictions"
While the total number of properties sold across New Zealand in April 2023 was 4,262, down from 5,984 in March 2023 (-28.8%), and down 15.3% yearon-year, Baird notes that "for those looking to buy, lower prices and good stock levels mean there are opportunities as we head into the cooler months." She also emphasizes that there is a positive trend in terms of vendor alignment with the market, as more vendors are willing to negotiate and be realistic about their expectations.
In Auckland, the median price has decreased by 15.0% year-on-year and is now below the $1 million mark at $995,000. Owner-
occupiers in Rodney and Auckland Central have been particularly active in the market, but there have been fewer first-home buyers. Baird suggests that this may be due to recent changes to Australia's immigration policies, which have led many New Zealanders to pursue opportunities overseas.
Overall, while there is some uncertainty around the economy and securing finance, Baird remains optimistic about the property market in
New Zealand. At the end of April, the total number of properties for sale across New Zealand was 28,643 up 1,593 properties (+5.9%) year-on-year, and down 2.19% month-on-month. She notes that "despite the current slowdown, there are still opportunities for buyers in the market," and encourages buyers and vendors alike to be open to negotiation and realistic about their expectations.
There was a 46% decrease in the total number of sales year on year.
There was an 40.2% decrease in the average Sale Price year on year.
There was a 57% decrease in the total sale value in Parnell year on year.
RAY
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This article was first published on OneRoof.co.nz and is published here with permision
Homeowners can now chill and watch Netflix and still be eligible for a home loan after the latest and final changes to the Credit Contracts and Consumer Finance Act came into effect last week.
The backpedal from the government around allowing banks to narrow the expenses considered by lenders and exclude discretionary spending came into play last Thursday.
A review of the CCCFA was carried out after it was blamed for a drop in lending activity across a range of consumer credit products. Initial changes in July last year saw banks no longer consider savings and investments as ongoing expenses and disregard previous spending habits and future spending habits.
EasyStreet mortgages financial adviser Gareth Veale said some banks had already adopted the changes ahead of them and the result had meant more people were either eligible for bank loans or could borrow more and therefore buy a better home.
“There’s no longer the same scrutiny over expenses that there was which is huge."
Discretionary expenses such as subscriptions like
Netflix – or even shopping trips to Kmart – are now excluded from the banks’ calculations on eligibility.
Veale said this made far more sense as after paying rent, power and other expenses people usually spent what they had left and the banks shouldn’t expect someone with a home loan to have these same spending habits.
The new CCCFA rules introduced at end of 2021 impacted about one in five borrowers, he said, and these people were now able to borrow again or borrow more.
“… And not necessarily go through three months of living like a pauper in order to meet a loan that they should have been eligible for all the way along.”
Although the latest changes appear to have snuck under the radar, CoreLogic chief property economist Kelvin Davidson said it was only a small part of the problem. He said it would not override other mitigating factors such as whether someone could meet the banks’ serviceability criteria which was proving harder for some with the higher interest rates. Mortgage serviceability test rates now sit in the mid-8% to early 9%, according to the latest Financial Stability Report from the Reserve Bank of New Zealand.
“OK, they may be able to ignore a few more of your expenses than previously, but you still have to be able to fork out the cash to pay the mortgage.”
People also had to be able to prove income stability. “I think it adds a little bit more demand for sure, but it probably doesn’t transform things on its own. But then when you add it to LVRs (easing), to peaking mortgage rates, tighter listings, net-migration – it’s just another thing on the list that suggests this downturn is almost
done."
Whereas the CCCFA was people’s big concern over a year ago, it now seemed to have been pushed right down the list and this could be because of changes made last year, he added.
New Zealand Banking Association chief executive Roger Beaumont said the latest tweaks to the CCCFA regulations still meant affordability assessments were needed for all types of lending and borrowers.
The assessments were also carried out on any new credit from an increased overdraft or credit card limit to a home loan and that could make it tricky in the case of natural disasters or a change in personal circumstances.
“We saw that to devastating effect with the recent North Island flooding and Cyclone Gabrielle, where the government had to introduce two separate temporary changes to the regulations to provide banks with the flexibility to provide affected customers with credit, including low or no interest loans or overdrafts. That took time.”
Ray White Parnell is based at the heart of our communities who form Auckland’s historic boutique suburbs. We are a team of dedicated professionals who understand this unique market and are experienced in all property types - whether it’s for a family home, landmark property, city lifestyle or investing. As the surrounding suburbs remain a destination of choice for lovers of art, history and proximity to city life we are in the right location and the right frame-of-mind to provide market leading advice with a focus on people.
We encourage a unifying atmosphere where opportunities are created, individuals are recognised and everyone grows - from our team to vendors, buyers, investors, property owners and tenants. Our experienced and established team service many aspects of the Auckland City market - from rental apartments to luxury penthouse sales and from the classic family home to an epic waterfront estate.
Ray White Parnell also has a strategic partnership with Loan Market connecting our clients with experienced brokers to provide home, construction and refinancing loans with some of the best market rates.
We are all about open doors and open minds.
Phil Horrobin Principal Wayne Bulog Sales Manager
Andrew Fava Licensee Salesperson
Blair Stanaway Licensee Salesperson
Bryan Santos Licensee Salesperson
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Anne De Liefde Licensee Salesperson
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