Figures hint at stabilisation in housing market
Latest mortgage application figures hint at stabilisation in housing market
10 June 2008 – The latest mortgage application statistics to be released by Veda Advantage, New Zealand’s largest credit information provider, hold some promising signs for the sluggish housing market. The number of consumer mortgage enquiries for the month of May climbed 5% on April’s figures, and were a 7% increase on March.
Veda Advantage NZ Director John Roberts says, ``The increase in mortgage applications hints at some stabilisation in the housing market, though it is obviously far too early to talk about a revitalisation. If you look at the way the market has trended since 2000, a significant recovery in the next 12-18 months would be a real anomaly, particularly in light of wider economic factors. But there are at least some indications that activity in the property market is not stagnating, despite the likelihood of a further slump in house prices. Veda Advantage further believes that this slight reversal in the downward trend has been a result of the large trading banks reducing their two year fixed term interest rates, albeit the Reserve Bank has yet to move the official cash rate.’’
The figures come on the back of a report issued by the Reserve Bank forecasting a three year decline in house prices before they return to current values.
Mr Roberts comments, ``This slight increase in mortgage applications on the back of a drop in house prices, suggests that we are seeing speculative buyers taking advantage of market conditions.’’