Seeds for housing market recovery are being sown, survey shows

A surge in the number of first-time buyers entering the market suggests their decline may be coming to an end, though it’s not quite there yet, says independent economist Tony Alexander.

Alexander’s latest survey of real estate agents shows that, for the first time since last September, more first-time homebuyers stepped forward to buy than stepped back.

A net 5% of agents reported seeing more first-time buyers on the market in August.

Alexander said it was a marked change from last month when a net 36% of agents said they were seeing fewer first-time buyers, and it was the least negative result since last October before the credit crisis hit.

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It also validated the results of its latest survey of mortgage advisors, where more advisers reported an increase in first-time homebuyer inquiries than reported decreases for the first time since August last year.

There was also an increase in requests for property appraisals and in the number of people attending open houses in August, the survey showed.

A net 20% of agents reported more property appraisal requests, compared to a net 13% reporting fewer requests the previous month.

And a net 7% of agents said there was increased attendance at open houses, compared to a net 47% who said fewer people attended open houses the previous month.

Economist Tony Alexander says the market downturn could bottom out within a few months.

RYAN ANDERSON/Things

Economist Tony Alexander says the market downturn could bottom out within a few months.

Alexander said this did not mean the market was recovering, but the results were early signs that the market was nearing the end of its free fall and was likely to bottom in the coming months.

The lifting of maximum prices for loans and subsidies for First Homes could be one of the reasons for the better results, he said.

But the survey also showed some easing in buyers’ concerns about rising interest rates. paying too much in a falling marketand, in particular, access to finance, and these factors probably also contributed.

“Some first-time homebuyers will have made a more realistic assessment of what they want and, instead of waiting to capture the last few percentage points of falling home prices, will have decided to take advantage of the buyer’s market to secure a home in the one to raise a family.”

The surge in appraisals suggested more homeowners wanting to sell had given up hope of getting last year’s price and were capitulating to the market, meaning more options for buyers, he said.

“However, seller capitulation is not universal, and there are people who can’t sell at the price they want and are instead putting their properties on the long-term rental market.”

The survey also showed that investors remained on the fringes of the market, with a net 34% of brokers reporting that there were fewer investors in evidence. But that was an improvement of a net 60% the previous month.

The housing market downturn has accelerated and home prices across the country are more than 10% below market peak, according to the Real Estate Institute.

kathryn george/stuff

The housing market downturn has accelerated and home prices across the country are more than 10% below market peak, according to the Real Estate Institute.

In recent months, the market downturn has accelerated and house prices across the country were now more than 10% below market peakaccording to the Real Estate Institute.

the The Reserve Bank recently forecast that prices could fall as much as 20% from their peakwhich was in line with the forecasts of some retail banks.

But last week, CoreLogic’s head of research, Nick Goodall, said that while there was still no concrete sign of the market bottoming, there were rumors that the bottom was not far away in some places.

How soon things change will depend a lot on buyer psychology, but there were already signs of a change in buyer mindset, likely due to predictions that interest rates might not have much more to go up, he said.

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