New Zealand Property Investors' Federation

The NZPIF is the umbrella body for 17 local Property Investors' Associations throughout New Zealand.

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Landlords benefit as first-home buyers retreat

Property investors are the early winners from the Reserve Bank’s loan-to-value speed limits.

By Susan Edmunds

Real estate agents and mortgage brokers say interest from first-home buyers has dropped dramatically since the mortgage rules changed at the beginning of the month.

The latest BNZ/REINZ survey of real estate agents reported a large drop in the number of first-home buyers in the market – the first time a negative result has been recorded in the series. But the agents reported they had not seen investors drop off in the same way. There was no expectation that there would be a negative impact on prices, although there has been a sharp decline in perception of auction clearance rates.

First-home buyers typically cannot now bid at auction because preapprovals are scarce.

BNZ chief economist Tony Alexander said first-home buyers might not be out of the market indefinitely - they and the banks would adjust to the rules and activity would resume.

Auckland Property Investors Association president David Whitburn said agents were receiving 60 per cent fewer calls from first-home buyers than they were this time last month.

But just as many properties were still being sold, because investors were in the market to snap them up.

Whitburn said: "There are fewer people at auctions and definitely fewer buyers. As a result, it is easier for me as a professional property investor to get good deals."

Real estate agent Amy Anderson said first-home buyers were no longer coming through open homes.

"They often weren't in a position to buy, regardless, because of the price increases," she said. "Now with the 20 per cent requirement as well, they've stopped coming to look because it's completely hopeless."

Mortgage broker Joel Oliver said he had to tell three-quarters of all first-home buyers that he could not help them get a mortgage. "But on the flip side, I work with a lot of investors and there's quite an elevated amount of inquiry for investment properties because there's less competition."

Property investor Sara Hartigan said the LVR change was "the best thing that's ever happened". She is a trader and investor primarily in South Auckland and has bought four new properties in the past two weeks.