The latest market update from CoreLogic suggests that New Zealand is starting to get a good feel for the likely changes to the property market, after the announcement of a new government.
CoreLogic head of research Nick Goodall said the government has been clever in using the Overseas Investment Act to restrict foreign citizens from buying existing property.
However, Goodall said there’s no official measure of foreign buyer activity, so the potential impact of this is unknown.
“What we have heard is that foreign buyer activity has already diminished due to our banks not accepting foreign income to satisfy income criteria on mortgages,” he said. “It’s my expectation that it’s a pretty minimal overall impact – maybe put this one down to a savvy popular political move rather than one for major marker impact.”
Goodall said there was a consistent lift in new property listings since the start of September. Other levels are still below the same time last year and the effect of super low total listings on the market has been minimal – not so much in Auckland but in places like Wellington and Otago.
“No doubt that all the monitored announced and detailed changes that will affect investors will definitely have some investors weighing up their options,” he said. “But my initial feeling is that this will mostly impact purchasing decisions and not selling decisions.”
There hasn’t been a major change in the type of people listing their property currently, Goodall said. The mix between owner occupiers and multi-property owners remains consistent with the rest of 2017.
“My theory is that if we see a lift in experienced investors divesting from the market, it could be a strong indicator that the market is on for tougher times than we otherwise expect.”
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