More buyers fear they'll miss out on a property despite forecasts that prices will ease, a new real estate survey shows.
In a REINZ and Tony Alexander survey of over 350 real estate agents during early October, more than three-quarters (81 percent) reported that fear of missing out (FOMO) was evident among buyers.
Over half (58 percent) said open home numbers increased month-on-month. Over a quarter (38 percent) of agents said more people were attending auctions, with 57 percent saying this was the case in Auckland.
"We ask agents each month whether they feel buyers are becoming fearful of missing out on making a property purchase. Increasingly they're saying 'yes', buyers are fretting," Alexander said.
In the September Treasury PREFU report, house prices are forecast to fall 5.1 percent by June 2021, compared to March 2020 levels. But a listings shortage, compounded by COVID-19 restrictions, has caused prices to rise. REINZ August 2020 data shows the national median house price rose 16.4 percent year-on-year, 16 percent in Auckland.
"Back in June, only a gross 12 percent of agents said that buyers were worried about prices being high. Now, a gross 49 percent say that buyers are concerned by high prices," Alexander added.
Buyers fear prices will rise again before they're able to save enough deposit or get finance approved.
"Getting finance still appears to remain relatively difficult, with a gross 46 percent of agents reporting this as a concern. Concerns about insufficient listings have remained very strong at a gross 76 percent."
But as a glimmer of hope for buyers, 36 percent of agents were doing more property appraisals. This could result in more listings in the coming months. Since June, over half saw more interest from first-home buyers.
RE/MAX CEO Don Ha said across-the-board, there aren't enough listings. More terraced housing developments are catering for first-home buyers in the $650,000 to $750,000 price range. People working flexibly during the pandemic has caused buyer demand in the outer regions of Auckland to increase.
"Warkworth, Drury, Te Kauwhata…Pokeno is going crazy," Ha said.
Before COVID-19, the ratio of home buyers was around 50 percent first-home buyers to investors; now, it's 70/30, he added.