Ray White Now New Zealand 29.6.2020 Version 6 - 29 June 2020 - Page 10
Buyers normally start their journey by looking online.
Online enquiries show that the number of buyer enquiries
on our websites dipped by 25% in April but is now up on
this time last year. In fact, we are seeing unprecedented
levels of online traffic across our Ray White websites.
Industry portals like realestate.co.nz and trademe.co.nz
are also reporting significant increases in buyer enquiry.
The usual stage in the buyer journey is inspections
followed by offers and buyers bidding at auction on
property. This is transparently reported through our
auction data. When we look at our auctions in recent
weeks, we have seen the average number of bidders per
auction exceed the numbers that were achieved at the
same time last year.
Pre-approvals are a key leading indicator to buyer
confidence knowing they have the financial capacity to
buy the property. Loan Market our loan brokerage partner
is currently sitting on over NZ$1.2 billion of pre-approved
buyers across New Zealand. These are buyers ready to
make offers with no finance clause required.
So what factors are contributing to buyer confidence?
Today interest rates are at record low levels and are
advertised from 2.60% fixed for a one year period.
• Importantly, the general consensus among
economists is that they will remain at these low
levels for the foreseeable future.
• Interest rates are a driver of home affordability and
in many areas, while prices have risen in the last 12
months, corresponding interest rates have reduced.
• Banks and lenders remain very supportive of lending
for residential property. The chart below shows the
monthly home loan pre-approvals recorded by the
Loan Market Group, which is our loan brokerage
partner and New Zealand’s largest independent
broker that settles over NZ$650 million in loans per
month. Pre-approvals are indicative loan approvals
obtained by buyers before they buy a property to
enable them to bid confidently.
• Record levels of government stimulus are part of the
supporting reason behind a high proportion of buyer
This chart compares the number of loan pre-approvals submitted via Loan Market brokers over the 18-19, and 19-20
financial years. It shows higher levels of pre-approvals now compared to 12 months ago.
# Loan Pre-approvals / 28 days
Jan Feb Mar Apr May Jun Jul
Source: Loan Market