New Zealanders’ optimism about the housing market continues to rise with more owners opting for a variable mortgage rate rather than locking one in.
Almost one-third of Kiwis (31.8%) have now opted for a floating rate in the belief there are more cuts to come from the Reserve Bank of New Zealand (RBNZ).
Commentators are speculating owners who are moving to a flexible rate are also considering their options after two years of dipping values and high interest rates.
With Westpac Bank becoming the first major lender to take their retail rate below 5%, pundits are predicting a rate war in the next few months.
Chief property economist at CoreLogic NZ, Kelvin Davidson, backs this possibility.
He told one media outlet: “The emergence of rate wars has introduced more competitive longer-term fixed rates, which may soon encourage a shift in borrower preferences.”
He added, “We are witnessing the initial signs that the downturn in property values is reversing, with a national potential rise in property values around 5% expected this year.”
Growth was being led by Auckland, Christchurch and Dunedin, he said.
The change in the mortgage landscape comes as the number of property listings hit its highest point since 2018.
CoreLogic’s latest survey claimed listings are now 26% above the five-year average.
However, Kiwi buyers remain relatively cautious.
Our agents say buyers are enjoying the fact they don’t have to be rushed into a decision.
For sellers, it’s critical to have a five-star presentation for your home and to be flexible on pricing.
Understanding the needs of the buyer, and matching your negotiation stance accordingly, will allow you to strike a good deal.
There will always be circumstances in which a seller should sit tight, but the price of doing so can be costly. While you might not achieve the price expectation for your own home, you’re sure to find good buying when you purchase your next home.
There’s definitely an element of “what you lose on the swings, you gain on the roundabout” in the Kiwi market right now.
So, holding on to a price rejected by the market is unlikely to benefit you.
Here are some of the dynamics that CoreLogic picked up in its survey:
Value – Total market value stands at $1.64 trillion.
Growth – Predicted residential value growth for 2025 – 5%.
Sales – Total property sales over the past year – 82,757.
Listings – 26% above the five-year average.
Yields – Gross rental yield is 3.9%, the highest since mid-2015.