House sales in Auckland have slumped by almost 30 per cent over the past year as tighter lending conditions take their toll on both first-home hunters and cash-starved investors.
The latest round of loan-to-value ratio (LVR) restrictions from the Reserve Bank are affecting investors, but banks have also tightened lending criteria – making it harder for all borrowers to get finance.
Latest figures from CoreLogic show first-home buyers have been hit especially hard.
“We have seen a dramatic drop in first-home buyer activity,” said Nick Goodall from CoreLogic.
“There were less than 1280 sales to this group in April and May which is the lowest we’ve ever seen since 2005, including during the Global Financial Crisis.”
CoreLogic figures show the number is down 27 per cent on the same two months of 2016 and down 31 per cent on 2015.
In October last year tighter LVR restrictions required property investors to have a 40 per cent deposit for a mortgage loan and owner-occupiers a 20 per cent deposit.
Housing unaffordability, winter, rising interest rates and uncertainty about the election were other factors in the widespread slowdown, Goodall said.
The CoreLogic buyer classification data showed all buyer groups had been affected – except investors buying with cash.
The LVR requiring investors to have a 40 per cent deposit had reduced the number buying property with a mortgage to 1750 sales in April and May.
Source: NZ Herald
Image Source: NZ Herald