It’s been a bit of a bumpy ride over the past 6 months for those looking to buy or sell a property and for individuals who work in the property industry. Back in March as we all hunkered down during lockdown, the outlook for the property market was pretty bleak. Many industry experts were predicting that mortgage prices would soar and construction would come to an abrupt halt. However, as we have emerged from life in lockdown things thankfully seem more positive and we are bucking the trend that industry experts predicted.
There are a few factors which have impacted the current positive position of the property market in New Zealand. One major factor was the change in interest rates. The Reserve Bank of New Zealand (RBNZ) who oversee the country's currency and monetary policies have made a few significant changes since lockdown. Just over two months ago they dropped interest rates to the all-time low of 0.25%. This change was to help lower household and business borrowing rates to help bolster the economy. The policy change was put in place to negate the effect of rising unemployment, increase in firm closures with the aim to keep the property market buoyant and businesses moving forward.
Due to the changes in interest rates, mortgage rates have fallen to 2.5%. This along with the cut in capital gains against mortgages back in 2019 has made it more attractive for property buyers to take advantage of the current economic situation. However, this doesn't make it all plain sailing…
Things are pretty fierce out there in the property market currently with high buyer competition. Property shortages, record migration, returning kiwi’s, property managers and first-time buyers are all impacting the high-demand for property across NZ. In the month leading up to August the number of properties sold around the country was up by 22%!
We are noticing a record number of individuals visiting open homes and properties of all types being sold within days of being put up for sale. As a mortgage broker this means we need to work quickly with our clients to make sure they have all the information they need and documentation ready to go so they can be in the best position possible when putting an offer or tender against a property they wish to purchase.
With such a huge rise in properties being sold throughout New Zealand, there are more buyers than sellers. Now’s the time to start talking to the Stephanie Murray Mortgages team. We can help you have all the paperwork prepared and ready for you to purchase your first home, or start your investment property portfolio.
Let’s start talking today, firstname.lastname@example.org or