KEY POINTS:
A bank survey of residential real estate sector sentiment has presented a pessimistic picture, with many professionals saying the market has turned down fast.
BNZ chief economist Tony Alexander released the monthly confidence survey this week. The survey went to 11,500 people, who were asked how their sector
was going and if the economy would get better.
Results showed many people had noticed a downturn in house sales and were less optimistic about the sector's fortunes.
Agents said the market was extremely quiet, with low sales volumes and prices dropping, particularly in Auckland.
A valuer said some prices were "easing backwards" and valuation work was very slow.
The Auckland market had slowed noticeably and sales volumes in the eastern suburbs were down 30 per cent. Buyers were taking a long time to make a decision. 'For sale' signs were on display for a lot longer and investors were becoming cautious, respondents said.
August sales in the Howick/Pakuranga area were 20 per cent down on last year but prices were holding with a gain of about 1 per cent for the month. Listings were trickling in but many properties were sitting on the market because vendor and purchaser expectations were poles apart.
Another valuer said work had been very slow and there were signs that the Auckland market had slowed "very noticeably. Values are certainly not rising in residential Auckland".
Another agent predicted that rents would soon rise. "Soon the media will be full of 'pity the poor renter' headlines. Note the Australian experience: despite one of their biggest house building booms in the last 10 years, there has been a chronic shortage of rental accommodation for 18 months."
Property investors said the market had turned and the peak had been reached. But questions about construction showed a more optimistic outlook, with a buoyant sector and people expecting workloads to increase in the next six months. A tremendous amount of work in the infrastructure area was helping drive work.
Those surveyed about the building materials and supplier sector had noticed a tightening, more competition, tighter margins and slower decision-making.
Respondents reported the finance sector would come under more pressure.
"There is going to be serious blood on the wall over the next 24 months as finance company deals come up for roll-over with no funding out there," said one respondent.
Landlords might be hardest hit.
"Many investors would be looking to sell rather than purchase. First-home buyers need to see the opportunity."
