Auckland’s housing market search is ‘too horrible’

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An Auckland home hunter is shocked at how many properties have been lost and hit the rental market just weeks after being sold.

Data from economists and banks show that the buy-to-rent market is heating up.

But the Federation of Real Estate Investors contends that, in reality, first-time home buyers have the biggest impact on the housing crisis.

Renee and her family want to buy their first home; They have a healthy deposit, bank approval, and stable income, but every home they look at remains out of reach, despite their $ 950,000 budget.

The businesswoman and mother of two has been looking for a home with her partner since the confinement.

He said they are not fussy, they do not need a big place or a garden.

At this stage, they will take anything to stay in their area, so that their children can continue their education at the same school and can continue to be part of the community they have grown to love.

“The properties that we have been looking at are so varied, from small and small two bedrooms to something larger that we could perhaps convert. We are just looking for anything to try and put one foot on the ladder.

Weekend after weekend, they go through the houses hoping to find the one.

The same faces appear in the same homes, over and over again: families, couples, young people with their parents.

The mood is bleak.

“There’s no excitement there. There’s this kind of inevitability that this will go over budget, or stretch them, or they’ll be lost. And you look around and think ‘I don’t even want to be here, I don’t want to do this.’ It’s just too horrible. “.

When a friend returned from the US, Renee offered to help her find a rental in the same area of ​​Auckland.

He changed his search terms on Trade Me from “sales” to “rentals” for the same suburbs and was shocked by what he saw.

“I started to see all these houses, where we had gone to open houses, or we had passed by, or we got lost, they appeared in the search. Some of them had a coat of paint or a new fence, but they were the same houses.”

Seeing a house for rent is fine, he said, acknowledging that people’s plans change or may be in the process of moving.

Investors who own property here and there also make sense, he added, given the way the real estate market works.

“But I was surprised because I didn’t just see one,” Renee said.

A cursory search of recently listed rentals in the area shows that many of them have sold in the last few months.

Groups like Trade Me and the Real Estate Institute do not have the data, so it is difficult to know if these houses were already rented.

But figures from the Reserve Bank and CoreLogic show investors are piling up on property.

The CEO of Auckland’s rental and sales company Crockers Property, Helen O’Sullivan, said it is too early to know if the houses will be moved from property to rental.

“As for whether they are quickly returning to the rental market or not, we’re seeing a little bit of that, but not enough to say if it’s a big trend.

“We are having a lot of new properties brought to us by owners, but overall we are seeing more activity in the market across the board.”

Investors have an advantage over first-time home buyers, said Ajay Kumar, managing director of mortgage brokerage firm Global Finance.

Since the closing, house prices have skyrocketed, giving real estate investors more capital to leverage, he said.

“For first time home buyers, they still have to arrange a 10 percent or 20 percent deposit, but for investors, those who have shares in the property, they can buy without having that deposit because they already have that many shares. on your property. “

Property Investors Federation executive director Sharon Cullwick argued that while property investors may not be helping with the housing supply problem, they are not hindering it.

But she said first-time home buyers are when it comes to buying off-market rentals.

“If a first-time home buyer buys a property that was a rental property, then they will need another home to house the additional people living in that rental home.”

“So every time a first-time home buyer buys a home, even though it’s great that they’re entering the market, it actually makes the housing crisis worse,” he said.

The Reserve Bank said it will seek to restore the loan-to-value ratio if it believes that house prices are rising too fast.

Renee said she should act sooner rather than later, adding that the system is not fair.

“People who already have wealth and have houses can now accumulate more wealth and get more houses.

“It’s not about ‘you’re not a good saver, or you don’t work enough, or you don’t have a good job,’ none of those things are true.

“Who is really winning? We are not winning as a community.

“When people rent, they don’t put down the same roots as when they live somewhere. You don’t build a community like you do when you have a house.”