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 sentiment. Loan preapprovals 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 400 350 300 250 200 150 100 50 Jan Feb Mar Apr May Jun Jul 2018-19 2019-20 10 Source: Loan Market