OCR: Shot in the arm for summer already set
“Despite the Reserve Bank not lowering the Official Cash Rate today, let’s not forget it has already given the local real estate market a good shot in the arm,” says Derryn Mayne, Century 21 New Zealand owner.
“This summer we’ll see a lot of first-time buyers entering the market and existing homeowners deciding to borrow more to purchase their next house. Many Kiwis were holding back, but since last month’s big OCR cut more people will be taking the plunge this summer regardless,” she says.
The real estate boss’s comments follow the Reserve Bank announcing today it will maintain the Official Cash Rate at 1.00%, with interest rates expected to stay at record-low levels.
Ms Mayne says now is a good time for first-home buyers to do their sums and seek professional advice on their rent payments compared to the cost and commitments of servicing a mortgage.
“Overall, this coming summer is looking like it will be comparable to last summer. However, with interest rates now even lower, I think we’ll see some buoyancy in parts, particularly at entry-level which positively flows through to second-home buyers and sellers.”
Derryn Mayne says the announcement earlier this month that government-backed schemes for first-home buyers will have lower deposit requirements and wider eligibility from October will also lead to more Kiwis entering the housing market.
“Sure the OCR wasn’t cut again, but last month’s surprisingly large cut was a timely boost to New Zealand’s real estate market which will be played out over the coming months,” she says.