A marked increase in homes for sale locally is not a sudden supply boom, Clutha realtors say.
Real estate professionals contacted by the Clutha Leader this week said instead it was ‘‘buyer›end’’ conditions causing the situation.
Those contacted, who asked not to be named, said the root cause was buyers becoming hampered by the Covid›19 pandemic, in combination with more stringent bank›lending criteria.
‘‘The two factors are definitely Covid and the banks. Six months ago a house sale could be completed within two weeks. These days it’s taking three or four,’’ one agent said.
‘‘No matter the conditions, people are always moving around, for work reasons, upsizing, downsizing, into rest› homes, passing on, so houses are always up for sale and listing a property is no problem.
‘‘But purchasing involves so many people — vendors, buyers, agents, tradie inspections, lawyers, mortgage and insurance brokers, bank staff. Those people get sick or are close contacts with Covid and they’re not there to move the process along, and the ones who are at work are snowed under.’’
Amendments to the Credit Contracts and Consumer Finance Act were also a significant factor. ‘‘The criteria to get finance are so tight now because of the new legislation,’’ a second local agent said.
‘‘Even people with high incomes and plenty of equity are getting asked how much they spend on coffee and takeaways or having their hair done.
‘‘I don’t think when the Government brought in that legislation they realised the ramifications of it, but now they’re trying to change it,’’ the agent said.
Officially aimed at protecting vulnerable borrowers, the amendments came into effect on December 1 last year, and were immediately blamed by lenders and brokers for causing a credit crunch and subsequent cooling of the housing market.
Responding to criticism of the effects of the changes, the Government has already ‘‘tweaked’’ the amendments, and bigger adjustments are planned.
Local agents agreed Covid›19 lockdowns had illustrated the feasibility of work›from›home options for many professionals.
As a result, migration from cities was a factor in regional growth and the building boom.
‘‘I’ve been in this industry a very long time but I’ve never seen a market like this. I think a lot of would›be buyers are putting it in the ‘too›hard basket’ at the moment, but as Covid passes and the legislation changes things will get moving again,’’ a veteran agent said.
‘‘In the meantime, the best advice is to make sure you’ve got a really good mortgage broker, and a good relationship with your bank.’’