August Update
Navigating Today’s Market
With media headlines constantly talking about inflation and interest rate shifts, it can easily feel like a challenging time to buy, sell or refix.
But if you look past the noise the property market remains active and there are plenty of real opportunities for smart buyers and homeowners.
Interest Rates & the OCR: On July 8 the Reserve Bank raised the Official Cash Rate (OCR) by 25 basis points to 2.50% to help curb inflation, which is currently sitting at 4.1%. While this signals a slight tightening cycle rate choices remain competitive. Depending on the lender fixed mortgage terms across 6-month, 1-year, 18-month and 2-year options can still be secured under 5%.
A Buyer-Friendly Market: National property values have remained mostly flat (down just 0.2% in June), with average property values sitting around $943,000. With over 34,000 properties available nationwide and 7,942 new listings hitting the market in June alone, buyers have selection, leverage and time on their side.
Active Buyers & Strong Competition: First home buyers continue to be a dominant force in the market. At the same time, banks are fiercely competing for refinance business and are offering attractive cash contribution incentives to win over existing homeowners looking to secure a better rate structure.
For those looking to sell first and then buy, banks are still doing open bridging finance and this has turned out to be a really good option for some clients who were recently upgrading their homes.
Did you know? You don't need cash to pay a property deposit.
If you are funding your deposit through KiwiSaver or 100% property equity, banks can provide a temporary overdraft facility to cover the upfront deposit which is cleared automatically on settlement day.
We have set up several of these lately and realised a lot of people do not know this feature exists. Reach out if you would like to explore this for your next purchase!
Why There’s Light at the End of the Tunnel
Economic momentum may feel slow heading into the upcoming election but the property market is far from stalled. High inventory means there are genuinely good buys on the market right now for those ready to act.
Regardless if you are looking to purchase your first home, upgrade or review an upcoming fixed loan expiry, there will never be "perfect" economic conditions. A well-structured mortgage strategy makes all the difference.
Stay positive fellow Kiwis and as Winston Churchill once said:
“If you are walking through hell, keep walking!!!”
