OCR Slash Will Help Carry Real Estate Momentum
“The Reserve Bank’s latest move will help carry the momentum we’ve seen return to the property market in recent months,” says Derryn Mayne, Owner of Century 21 New Zealand.
The real estate boss says regardless of how much the retail banks pass onto borrowers, the fact that interest rates are expected to stay at record-low levels in the foreseeable future will provide certainty and confidence in the sector.
She says online mortgage calculators will soon be working overtime, with the Reserve Bank urging banks to keep lending. More first-time buyers will inevitably enter the market, and existing home buyers will consider the forecast low borrowing costs a good opportunity to take their next step on a bigger or better property.
Ms Mayne’s comments follow the Reserve Bank announcing today it has slashed the Official Cash Rate from 1.00% to a new record low of 0.25%.
She says demand for housing in New Zealand continues to be strong, sales volumes and prices are generally up, Auckland is rallying again, rents everywhere from Westport to Wellington at all-time highs interest rates, and now interest rates are set to stay rock bottom.
“Let’s not forget that earlier this year most property commentators were predicting a seven to 10% increase in residential property values for 2020, and they’ve yet to reforecast that.”
She says since last year Government-backed schemes for first-home buyers have had lower deposit requirements and wider eligibility, which will also help more Kiwis to get on the housing ladder.
“Whether you’re sick of paying huge rents or a retiree who’s barely getting a return from their savings in the bank, buying property has never looked more attractive when all the alternatives are considered,” says Derryn Mayne.