Thanks to affordable interest rates, more buyers are currently entering the market, putting pressure on New Zealand’s limited housing stock.
According to the latest market data, last month both new listings and the total number of houses for sale fell nationwide compared to a year ago. In the meantime, the market showed important signs of recovery with an increasing number of buyers pushing up prices almost everywhere. Only Auckland and Whangarei reported year-on-year price drops of 1.5 per cent and 1.4 per cent respectively – but in both of these areas prices are declining a little bit slower than before.
“The residential markets of all our main cities have shown value growth over the past three months, with this largely attributed to the recent reduction in interest rates by the major banks,” said QV general manager, David Nagel. “Even the markets which have struggled over the past few months, such as Auckland and Christchurch, are showing a resurgence in prices achieved.”
The positive sentiment seems to have recalibrated the OCR expectations. According to BNZ, a week ago financial markets were pricing in a 90 per cent chance of an official cash rate cut in November, but the probability currently stands at just 50 per cent. The Reserve Bank will finally reveal its decision this Wednesday – their last cash rate announcement of 2019.
In the meantime, the RBNZ is also set to announce their decision on the loosening of LVR restrictions, which could pave the way for more buyers to step on the ladder.
“As we head towards summer, all eyes will be on the RBNZ to see what happens with LVRs in their November announcements,” said David Nagel. “With many economists also predicting further cuts to the OCR in November, the property market could be in for a late spring surge.”
If you know of any buyers looking for the right mortgage for their property purchase, please keep us in mind. Our Mortgage Link advisers will be happy to help.
To get in touch with the team at Mortgage Link, please contact:
021 835 506
Disclaimer: In preparation of this publication all care has been taken, however no warranty is provided as to the accuracy of the information and, as such, no responsibility is taken by Pivotal Financial for any errors or omissions.
This publication does not constitute personalised financial advice, may not be relevant to individual circumstances and should not be seen to constitute a recommendation of any description. Before taking any action in relation to matters dealt with in this publication please seek Professional Financial Advice.
(A Disclosure Statement is available on request)