New Zealand property: 'Sluggish' housing market could be perfect time for first-home buyers - economist

With growth in the housing market slowing and asking prices plummeting in some areas a property expert believes now might be the right time for people to start searching for their first home.  

CoreLogic chief property economist Kelvin Davidson told AM on Monday the housing market is a little bit "sluggish". 

"The key thing we've seen turn around is listings, there is still a reasonable flow of listings coming onto the market but what's happened is sales at the other end of the pipeline have tailed off as credit has tightened up," he said. 

"The total stock on the market you can choose from has had a chance to replenish, so what I think we are seeing is buyers having a little bit more pricing power, so the balance of power is shifting towards them."

Even with more listings on the market, Davidson said that some auction clearance rates have been "really poor". 

"I have seen some stats from around Auckland that some auction clearance rates have been really poor so the mood has changed," Davidson told AM. 

"That is the other thing here, it's not just interest rates or credit availability or listings, there is also the mood in the housing market that matters a lot and expectations matter a lot. 

"If a buyer puts in a sneaky offer, maybe the vendor thinks 'is that the best offer I'm going to get? Not sure I'll get a second offer so I'll take it'. 

"So once that mindset changes, it can change really quickly and it means a lot. It is hard to quantify but that could be going on too."

With New Zealand in the process of re-opening its border, it could see an influx of Kiwis returning home and higher immigration levels.

But Davidson doesn't believe this will have a major impact on the housing market. 

"A lot of people are talking about a lot of migrants coming back and of course that's true but a lot will leave and it's that net balance that matters," he told AM. 

"We have seen over the past year or so it's credit that matters more anyway, so even if we are wrong about migration and it does really surge, then you still have credit environment on top of that. 

"So the outlook for the housing market is still a bit sluggish and for buyers out there it might be the right time to get in."