Home sales: Stock shortages now a bigger bottleneck than lack of finance

Difficulty in obtaining finance is no longer the biggest obstacle to an increased volume of home sales, according to a nationwide survey just completed by Harcourts Real Estate, which has more than 140 outlets spread across the country and in all major centres.
“Even though some areas still have a stock surplus as a result of the 2008/ 09 financial crisis, this poll revealed that the majority of our business owners believe that the biggest challenge currently facing agents – and home buyers – is undoubtedly a shortage of well-priced homes for sale,” says group CEO Richard Gray.
“What is more, some 37% of survey respondents expect this lack of stock to be their major difficulty over the next 12 months, compared to only 15% who believe their chief constraint in the next year will be their buyers being unable to qualify for home loans.”
Nevertheless, he says, 62% of the Harcourts business owners are upbeat about the prospects for the real estate market over the next six months, and expect conditions and sales to be “better” or “much better” than at present. Only 5% think conditions will be “worse” or “much worse”.
However, the majority do not expect the market to behave like a traditional “sellers’ market” in which prices rise rapidly. “This is what usually happens when interest rates are low and demand exceeds supply as it does now, but in this instance, buyers are extremely value conscious and would still rather lose out on a deal rather than risk paying too much.
“In addition, the banks are still cautious lenders and are valuing properties very conservatively before granting loans, even when prospective borrowers are well-qualified.”
In fact, says Gray, the majority of the Harcourts business owners (39%) feel that the market is currently in a state of neutrality or balance and will stay that way for the next few months barring any major economic shocks.
“In addition, 32% said they think buyers still actually have the upper hand - which means that prospective sellers still need to set their asking prices very carefully and in consultation with a qualified real estate professional who is able to provide them with the very latest market information and analysis.”

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