Why Are Property Investors Coming Back And Should You Pay an Agent to Sell Your Home?

Topic #1:  Oneroof 15th of July - Homeowners taking out low-interest green loans warned on break fees and rate hooks

Topic #2: RNZ 15th of July -Is it worth paying a real estate agent to sell your house?

Topic #3: 1News 17th of July - Apprentices dropped as builders struggle with downturn

Topic #4: RNZ 15th of July -The return of the property investor - but why?

Topic #5: Interest.co.nz 15th of July - New Zealand should ‘destroy’ the idea that the economy is linked to house price growth

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Transcript

 Hi everyone. I'm Debbie Roberts, owner and financial advisor at Property Apprentice. Join us today for the Week in Review where I talk about current events for the everyday investor and home buyer. Our topics for this week. Topic number one, from   📍 Oneroof on the 15th of July. Homeowners taking out low interest green loans warned on brake fees and rate hooks.

 Topic number two, from   📍 RNZ on the 15th of July. Is it worth paying a real estate agent to sell your house?  Topic   📍 number three. From 1News on the 17th of July, apprentices dropped as builders struggle with the downturn.  Topic number four, from   📍 RNZ on the 15th of July, the return of the property investor.

But why? Topic  number   📍 five, Interest.co.nz on the 15th of July. New Zealand should destroy the idea that the economy is linked to house price growth.  

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So first up for this week, in review from Oneroof on the 15th of July, homeowners taking out low interest green loans warned on brake fees and rate hooks.

And as always, the links to all of these articles are in the show notes below.

More New Zealand homeowners are using green loans to improve their homes with solar panels and double glazing rather than buying electric vehicles, mortgage experts report while banks like ANZ, ASB ,BNZ and Westpac offer up to $80,000 at low or zero interest for energy efficient upgrades. Most applicants now focus on home improvements like insulation, heat pumps, and window replacements.

According to Tella CEO, Andrew Chambers, interest in EVs has declined since the clean car rebate ended and new road user charges were introduced. In contrast, demand for solar installations has increased. Banks confirmed strong uptake of their green loan offers, though few provided specific figures on what the funds were used for.

BNZ noted a shift from vehicle purchases to making homes warmer and more efficient. While Westpac and ASB cited double glazing and heat pump installations as among the most common uses. ANZ said transport-related borrowers tended to draw down more than those focused on homes. Kiwibank also provides green lines through its sustainable energy loan, supporting solar, wind, hydro, or geothermal installations.

New Zealand Green Building Council CEO. Andrew Eagles supported the trend highlighting the financial health and resale benefits of energy efficient homes. However, he cautioned borrowers to be mindful of repayment terms as unpaid balances could revert to higher mortgage rates. He encouraged homeowners to seek professional advice to ensure value from upgrades.

So in other words, make sure that you talk to your mortgage advisor to get the best green loan for your situation. 

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Topic number two, from RNZ on the 15th of July. Is it worth paying a real estate agent to sell your house? Hiring a real estate agent can cost about $30,000 in commission on a million dollar home.

But according to research from property data firm, Cotality. the investment might be worthwhile. Totality, head of research and at Nick Goodall noted that homes sold through agents tend to achieve higher success rates and sell faster. Over the past decade, about 76% of agent listed homes were sold compared to just 65.1% of private sales.

In 2023, the gap persisted with agent listed sales reaching 65% and private listings just 52.8%. Private sales have accounted for a small share of the market ranging from 3.1% in 2021 to a high of 8% in 2016. Last year that figure was 7.6%. Goodall said agents have

often have buyer networks and know how to target potential purchases more effectively.

They also typically close deals faster. At the market's 2021 peak, the median time on market for agent sales was 24 days versus 40 days for private ones. Last year was an exception with agent sales taking a median of 75 days, which is slightly longer than the private sales at 71 days. Properties sold through

agents also tend to command higher prices, though this may partly reflect the fact that higher value homes are more often sold through agents. In 2023, the median sale price for agent listed homes was $740,000 compared to $662,500 for private sales. Still Goodall said that the data doesn't definitively prove whether agents deliver enough added value to justify their fees.

For example, a $750,000 sale through Barefoot and Thompson could incur nearly $24,000 in commission. While the price gap between agent and private sales is significant this year, it was narrower in 2022. He also pointed out that private sellers need to factor in the time, effort, and potential opportunity cost of handling the sale themselves.

Real estate professionals echoed similar sentiments. Agent Brooke Gibson, who once sold a home privately herself acknowledged the appeal of DIY selling, but said most people benefit from an agent's experience, especially during negotiations. Wellington agent Mike Robbers added that agents often market properties more effectively and price them right from the start, avoiding the common pitfall of cold listings that linger

unsold. Buyers may also expect lower prices from private sales given the absence of commission costs, Robbers said. Real Estate Authority, REA. Chief Executive Belinda Moffat, emphasized that whether to use an agent depends on the seller's experience, property type and situation. Licensed agents are legally required to act in their client's best interests and follow professional conduct standards.

Sellers working with agents also gain access to a market appraisal, tailored marketing plans and legal guidance, including advice on disclosure obligations. Key factors that could help prevent future disputes or failed transactions. Moffat added that commission rates are often negotiable and sellers who choose the private route should educate the themselves thoroughly about the process.

Confidence in the real estate industry, she noted rose from 70% in 2021 to 82% in 2023. Despite strong buyer demand, Goodall said, high listing volumes continue and price flexibility remains crucial for sellers. Many he added are still struggling to accept that prices have softened from the market's peak.

So my personal thoughts on this are that if you've got a good real estate agent, they're worth their weight in gold , because they can certainly market the property and talk to people on your behalf, which removes the emotion out of that negotiation process Also, chances are the real estate agents have had more practice with negotiating on properties than you might have as an individual.

So think carefully before you decide to sell the property yourself 'cause life's short. So use the professionals. 

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Topic number three, from 1News on the 17th of July, apprentices dropped as builders struggle with the downturn. New Zealand's construction industry is grappling with declining demand, widespread job losses, and growing concern over future workforce shortages.

A recent survey shows over two thirds of builders are struggling to secure enough work with more than one third reporting project cancellations. New Zealand certified builders. Michael Bottril said business closures were becoming more common and some apprentices were being let go due to a lack of work.

The electrical sectors also feeling the pressure. Apprenticeship rates have dropped to the lowest since 2011. Although the industry currently has an estimated shortage of 6,000 electricians, the impact has been masked by the economic downturn. According to master electricians chief executive Alex Vranyac-Wheeler, she warned of a double whammy,

when demand returns, not only will there be a shortage in workforce numbers, but also a gap in skills, particularly in emerging technologies. With about 20% of electricians retiring each year and fewer new entrants, the sector risks being unprepared for a recovery. Industry leaders are calling for more government support, including targeted funding, updated immigration policies, and incentives for employers who train apprenticeship apprentices.

Electrician, Darren Matthews, who recently laid off two staff members, said these cycles of boom and bust are familiar, but concerning. He highlighted the need to bring younger workers into the trade to replace the aging workforce. Despite the downturn, some apprentices remain hopeful. Elijah MacGillivray, an apprentice electrician, described his experience positively and saw trades as a strong career path with broad learning opportunities.

Construction Minister Chris Penk expressed confidence that demand would soon return, but ruled out direct government intervention saying that the sector would eventually face the labor shortage again as activity picks up. Bottrill agreed that while conditions are challenging, maintaining optimism is vital for the industry to push through.  📍  📍 

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 Topic number four from RNZ on the 15th of July, the return of the property investor. But why? Recent data from totality indicates a renewed interest in property investment with mortgaged multiple property owners accounting for 23% of home purchases in quarter two. That's an increase of 21% since last year.

In cities like Auckland and Christchurch, that figure reached 26%. According to Cotality chief economist Kelvin Davidson, the growth is largely driven by small scale investors. Those owning up to four properties, including their home, their activity rose from 12% to 14% with many targeting lower price properties.

Their share of purchases in the bottom 30% of the market climbed from 21% to 24% compared to last year. Davidson noted a shift toward buying existing homes. Likely due to the loss of tax benefits previously tied to new builds. However, despite increased buying activity, long-term forecasts remain modest informe predicts house prices will still be 20% below the 2021 peak when it's adjusted for inflation well into the next decade.

Rental growth is also expected to stay subdued, supported by weak migration and rising housing supply. Davidson pointed to a number of headwinds for investors, including tighter debt to income rules, less favorable tax treatment, and no expectation of interest rates continuing their historical downward trend.

Many investors are also weary of rising costs like council rates. Still property continues to be viewed as a reliable investment. Davidson explained that despite lower expected capital gains, many still trust the asset class due to its tangibility and perceived stability. He highlighted recent policy changes such as adjustments to loan-to-value ratios, the shorter bright line test, and the return of interest deductibility as key motivators.

He added that lower interest rates have reduced the cost of topping up rental properties significantly, making investment more feasible for average owners. Sarina Gibbon of the Auckland Property Investors Association agreed suggesting that long-term confidence and property remain strong. She said, many investors now see property as a tool for income stability rather than wealth creation, especially in uncertain economic times.

Gibbon noted that property offers leverage and control that other investments lack and current investor interest seems more about financial security than chasing capital gains. Infometrics Forecaster Gareth Kiernan added a cautionary note saying that while investor activity is rising, it's rebounding from very low levels.

Investor mortgage numbers remain below pre 2022 figures. He believes the increase is likely driven by improved tax settings and falling interest rates, but doubts whether the trend will continue given market fundamentals like declining rent growth, and slowing population gains. My thoughts on this are at some stage, the tide is gonna turn when it comes to net migration.

Also, we are seeing an increase in investor interest as well, and I think it's common sense to focus more on cash flow than on capital growth. Since capital growth, you've got absolutely no control over. So basically this is what we've always taught for the last 15 years. Control the things that you can control.

Don't make your investment decisions on things that are outside of your control. So my perspective is that with rent softening, that's great for tenants, you know, and, and it's also puts things in a much better light as far as investors are concerned as well, especially if we get a change of government.

Because at the moment, cost of housing is not high on their radar. It's not a problem when people are finding rents a lot more affordable. And also home ownership is the most affordable. It's been in years as well, so long may that continue in my opinion. But make sure that you're buying the right property for your situation because you definitely do not wanna be topping up mortgages significantly when there's no capital growth.

Otherwise, that'll suck the fun out of investing pretty quickly. Topic number five, from interest.co nz on the 15th of July, New Zealand should destroy the idea that the economy is linked to house price growth. Housing Minister Chris Bishop says, New Zealand must shift its economic focus away from house price growth and towards productivity-led recovery.

While acknowledging this shift may be difficult short term, he sees it as essential for long-term stability. The government is working to dismantle the idea that rising property values should underpin economic success. Though this mine shift will take time, Bishop believes progress is underway.

According to the Real Estate Institute of New Zealand house prices fell for a fourth consecutive month in June and up just 0.3% year on year. Not surprising since you know we are in the middle of winter at the moment. Despite lower interest rates, spending remains subdued as buyers remain cautious

due to job and security and an oversupplied market, sellers now have limited pricing power. Which means it's a good time to be a buyer. Economists say that this weak price growth has blunted the impact of the reserve bank rate cuts, typically falling rates, boost asset values and household spending, but current conditions have muted that effect.

My thoughts on this are that it's more the economic climate that is muting the spending. When people are concerned about potentially losing their jobs, they're not gonna rush out and spend a whole bunch of money in the economy. They're saving more, and, people who are in employment are using that to pay down their mortgages, to strengthen their financial position as well.

BNZ's Steven Toplis noted that while rate cuts have stopped further price drops, they haven't revived growth. Flat property values have stalled household wealth and spending since mid 2021. Kiwibank's Jarrod Kerr believes more rate cuts are needed to boost housing demand a key driver of economic growth.

The bank predicts a five to 7% rise in property prices through 2026. Though similar 2025 forecasts have yet to come true. Given the property sector's $1.6 trillion value, house prices heavily influence consumer confidence. In other words, when your house increases in value, people feel wealthier. Without price growth, households tend to spend less.

Still, Bishop wants to reduce this reliance. He sees stable home prices and falling rents as positive signs, especially for first time buyers. He criticized media narratives that treat rising house prices as essential. Currency Analyst Roger J. Kerr said economic pessimism is overblown, noting that monetary policy effects typically take a year to kick in, if not longer, since rate cuts began last August, he expects stronger retail and housing activity soon.

Kerr also pointed to strong exports and rising business confidence forecasting 3% growth by the end of 2025, which is well above the RBNZ's 1.8% estimate. He argued that overemphasis on property prices distorts the broader economic picture. Don't wait for the market to take off again. Understand how to build wealth and security no matter where we are in the cycle.

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