Is There Life After LVR?
Hi folks,
I thought I would take the time for a look at the numbers in our local market as I haven’t discussed for some time. To my colleagues in Real Estate, look away now as this doesn’t make for pleasant reading! The sales statistics for March are now out and we can see a substantial difference in the number of transactions compared with 2013, the number of residential sales from 1st January to 31st March is 153, this figure is hugely down on the 224 from the corresponding period last year and the 182 in 2012.
The reason for this considerable drop in sales can be attributed to The Reserve Bank’s decision to impose Loan Value Restrictions (LVR) on all buyers in the market. In essence a buyer, not just first time buyers has required a deposit of 20% pushing a lot of potential purchasers out of the market. I understand why the decision was made to impose an LVR, to slow down a fast rising market in Auckland & Christchurch, but this has made little impact on those markets and a huge impact on every other area around the country.
The LVR has been in place for 6 months now and the difference in the corresponding timeframe October-March, this year and last is huge. Upper Hutt is 112 sales down in this 6 month period, this is a huge number of sales to lose just as the market here was seeing some slight increase in 2013, still, by the way, down on our peak market of late 2007 early 2008.
There are some positive news, houses are still selling, just in lower numbers and I do expect this situation to change when the LVR is eventually scrapped, recent media reports say that it will go in a years time but I’m thinking considerably sooner, certainly now that interest rates are rising again.
If you are thinking of selling your home or want more information on the Upper Hutt property market please call me on the numbers below or contact me via email steve@steveslicker.com alternately fill in your details here on my website.
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Kind regards, (04) 212 6787
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