by The Landlord
The latest Real Estate Institute figures show that the number of properties selling for less than $400,000 fell 17.7% last month when compared with February 2013.
That has been pointed to as evidence that the loan-to-value (LVR) restrictions, which require banks to limit their lending to people with small deposits, has driven first-home buyers out of the market.
But NZPIF executive officer Andrew King said it showed that property investors, too, had left the lower end of the market and were not swooping in to pick up bargains, as had been predicted by some commentators.
A survey by NZPIF found that 71% of investors said they had not been affected by the LVR rules.
Only 7.87% said they would probably buy more property because of the LVR restrictions, but 13.48% said that these restrictions would cause them to buy fewer rental properties.
King said: “This contradicts the perception that property investors are benefiting from the effects on the market of the Reserve Bank’s LVR policy. The number of association members have been restricted in making property purchases by the LVR restrictions is higher than the number who stand to benefit from them. ”
He said it was $138 per week cheaper to rent than to own the average New Zealand home, which was another factor that would keep first-home buyers from purchasing.
"Many potential first-home buyers will look at the numbers and make the decision to continue renting. The expected rise in mortgage interest rates will make renting even more advantageous. “
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