CoreLogic: Early home buyers in Tauranga pay an average of $ 770,000 to get a mortgage. Photo / Getty
If the new mortgage rules go into effect, buyers of a first home in Tauranga may be faced with an even larger mountain to climb to secure their home.
The latest CoreLogic Market Pulse report found that first-home buyers in Tauranga pay an average
$ 770,000 to get on the stairs of the property.
But chief real estate economist Calvin Davidson says new RBNZ measures to tighten credit-to-value and debt-to-income ratios could further squeeze the wallets of first-home buyers.
The Reserve Bank is advising to reduce the proportion of tenant owners willing to borrow more than 80 percent of their purchase price, from 20 percent to 10 percent of all bank lending.
These are people who can now borrow, even if they have less than 20% of the deposit, and they are most burdened with debt compared to their income.
“They were the ones who benefited the most from the current regulations.”
Based on calculations that assume first home buyers now require a 20 percent bond, the additional bond required from first home buyers in Tauranga would be $ 77,000, Davidson said.
“The share of first-home buyers in Tauranga in the second quarter was slightly lower (19 percent), but in fact this is quite a lot compared to her own history – indeed, almost at the level of past peaks.
“In general, both markets have been heavily represented by first-home buyers lately.”
The latest data from the Real Estate Institute of New Zealand showed that the average home price in Tauranga fell 1.1% from June to $ 930,000.
Simon Anderson, managing director of Realty Group Ltd, which operates Eves and Bayleys, said anything that makes it difficult for first home buyers is bad for the market.
“We really want people to own their own homes in New Zealand, and given the potential outlook for higher interest rates, this is a double whammy.”
Anderson said that first home buyers are still active even during the last lockdown, with some buying properties through online auctions.
“They are still on the market.”
Buying a home was “a big problem,” he said, but getting into it was never easy.
“This is not everyone’s right. This is what you have to work on and plan for, investing, saving, making decisions. This could be your buying option outside of Tauranga in an area with a lower average price. “
But Anderson said the problem was not LVR or interest rates, but low home supply. “There is still not enough home.”
REINZ Regional Director Neville Falconer said first-home buying activity remains stable.
“However, bank lending remains the longest part of the process.”
Falconer said more properties in Bay of Plenty are now selling for $ 1 million or more, accounting for 31.4% of all sales in July, up from 14.5% of all sales in July 2020.
The average number of days for sale dropped to 31 from 40 days at the same time last year.
“This is the lowest average number of days for sale in the month of July since recording began.
“Offers are expected to increase in the coming months as spring approaches.
and the warmer months. “
ANZ’s external relations manager, Christy Martin, said that banks are still free to provide loans at a higher price.
“We will always work with our clients in the best possible way, based on their individual circumstances.
“We understand how difficult it is to get up the stairs and are always looking for ways to help.”
Martin said the ANZ Blueprint to Build offer, which launched in July, gives first home buyers a 2.76 percent discount (with the rate dropping to 1.68 percent of the standard floating rate for new builds or turnkey properties.
First home buyers can also receive a $ 3,000 down payment offer when they apply for a new loan, she said.
“It is in everyone’s interest that residential property prices are sustainable in the long term and that home ownership is affordable for as many people as possible.
“This is why last year we were the first bank to increase the LVR for investors in an attempt to balance the market.”
Meanwhile, Tauranga residents who resold their home in the second quarter of 2021 earned an average return of $ 437,500 on real estate.
The city’s gross profit from resale in the period from April 1 to June 30 this year was 188,046,504 dollars. No real estate was resold at a loss.