And there it is, finally ... the July Official Cash Rate (OCR) announcement saw the Reserve Bank stay true to its word, holding things steady at 5.50%. And the good news is that many economists are saying this is the end of the interest rate hike.
House sales have gone up 19% since May, and prices have stopped falling and many are saying the housing market has bottomed out.
And there is still 150 billion dollars of lending in New Zealand that has yet to roll off a low fixed rate.
So when is the right time to buy?
The market is turning from a buyers market to a sellers market faster than we thought, especially in Auckland. In Economist Tony Alexander’s most recent July survey of real estate agents all over New Zealand, he noted some key changes:
- More people are attending open homes
- 41% of agents say they see more people attending open homes vs. only 3% making this claim at the end of April
- More people are turning up to auctions
- 18% of real estate agents are now saying they’re seeing more people turn up to auctions, vs. -18% at the end of April
- Prices aren't falling steadily anymore
- 2 months ago, 58% of agents said they’re seeing prices falling, compared with only 7% saying this today
- FOMO, or fear of missing out, is reappearing
- 19% of agents are seeing clients afraid they’ll miss out on a property if they don’t pull the trigger now. This is miles away from the boom of 2020/21, but a big increase from 4% in late 2022.
- FOOP, or fear of overpaying, is on the decrease
- 40% of agents see buyers having this worry, compared with 68% at the end of April.
These are all clear indicators that the market is turning around quicker than we thought. So when is the right time to buy you ask? There’s no time like the present - interest rates have peaked, strong migration means more demand for houses, the CCCFA reform has made borrowing a bit easier (even with higher stress test rates) and construction numbers are falling away meaning there are less listings available, so it’s a great time to buy!
Keep in mind no one has a crystal ball and these are the predictions of acclaimed economist Tony Alexander, but there are very strong indicators
Is your loan one of the $150 billion yet to rollover? If you’re coming off a fixed rate soon, or you haven’t reviewed your mortgage in a while, get in touch with our team! We’ll provide free, personalised, tailored financial advice to your individual circumstances and current situation. There’s some great options we can talk you through at the moment including restructuring, refinancing for up to $20,000 cash back, and rate locking up to 60 days out just to name a few! Click here to make an appointment with our team.
