Will the property market take off again in 2020? Many signs seem to indicate that New Zealand is still a strong sellers’ market, with regions taking the lion’s share of price increases.
And with stock shortage likely to continue beyond 2020, price growth may peak up once more in the next few months.
“Record-low mortgage rates are clearly working their magic,” ANZ economists recently wrote, forecasting annual price growth of 5-6 per cent this year. Other economists, for example those at Westpac, say average prices could hit 7 percent growth.
And there might be some clouds on the horizon for first-home buyers. “Household debt is already very high, housing affordability is already a significant economic and social problem, and house price rises further exacerbates wealth inequality,” ANZ economists explain. “If things really start to get silly, the RBNZ has the option of tightening up LVR restrictions once more. We wouldn’t rule it out.”
This prediction seems to echo the RBNZ’s November 2019 Financial Stability Report, when the Reserve Bank ruled out easing the LVR restrictions further, leaving the door open to other adjustments “in line with changes in the overall risk environment.”
Once again, it’s too early to determine how these factors will play out in the months ahead. In the meantime, we can only recommend New Zealand buyers to get their mortgage pre-approved and research the property market to see what’s out there that matches their budget and goals. Our Mortgage Link advisers are here to help.
To get in touch with the team at Mortgage Link, please contact:
021 835 506
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