Real Estate Boss: No Change To OCR, No Worries
“With some mortgage rates below 3%, lower deposits now required, and the market set to become a buyers’ one, cutting the Official Cash Rate again today would’ve not have helped many more home buyers,” says Derryn Mayne, Owner of Century 21 New Zealand.
Ms Mayne’s comments follow the Reserve Bank announcing today it was holding the Official Cash Rate at 0.25%. At the same time, the bank’s Monetary Policy Committee has agreed to nearly doubling its quantitative easing programme to $60 billion in a bid to stimulate the economy and reduce the cost of borrowing.
“It’s well signalled that mortgage rates are expected to stay at record-low levels in the foreseeable future with an expectation now they’ll fall further. That’s enticement enough for those renting to consider home ownership, helped by the fact that mortgage loan-to-value ratio (LVR) restrictions have been scrapped for at least a year.
“No longer do first-home buyers need a 20% deposit. Coupled with servicing mortgages being cheaper than renting in many cases, and vendors increasingly willing to negotiate on price, young Kiwis have the best opportunity to get on the housing ladder in more than a decade,” she says.
The head of Century 21 says the promise of rock-bottom interest rates for the next year or so will also encourage existing home buyers to take their next step on a bigger or better property.
“I think the Reserve Bank has pulled enough levers for now to help buyers, sellers and the industry at large. The next thing is for the Government to review any legislation that may hinder real estate’s revival. For example, they should look at softening the foreign buyer ban - even temporarily, or for certain parts of the country.”
Derryn Mayne says her company’s franchises have experienced plenty of activity during the Alert Level 3 and 4 lockdowns. Century 21 salespeople are now looking forward to driving business hard in Level 2 with clear guidelines in place for real estate to operate safely.