Real estate boss reveals why
With the next OCR review not until Feb. 22, Tim Kearins, owner of Century 21 New Zealand, is expecting more interest rate stability this summer, though he said this “won’t make it any easier for many young Kiwis to secure finance in the first place.”
With listings on the rise and with vendors getting more realistic about price expectations, the next few months could be a good time to buy a property, Kearins said. And while the hurdles remain high for Kiwis borrowing via the traditional banks, he said mortgage brokers should not be overlooked.
“Let’s not forget that rents are still high, and for many if they can organise a mortgage and buy now, they won’t look back,” Kearins said. “Some argue it’s better to wait to see if the market falls further, but that’s probably misguided as interest rates may be much more expensive by then which in the end might be more costly overall.”
Last summer, there was a serious credit crunch due to the implementation of the Credit Contract & Consumer Finance Act (CCCFA). Some government tweaks later, big banks continue to run ultra-conservative assessments on all new borrowers.
“Prospective property buyers have other options,” Kearins said. “If they can stump up a deposit and prove their ability to service a mortgage, they might be surprised with what a mortgage broker can offer. To help their cause, new borrowers should also consider getting in a flatmate or boarder. That income could make all the difference in getting them over the line.”
The Century 21 boss said mortgage brokers like Julius Capilitan (pictured) of Century 21 Financial do all the running around, delivering competitive rates and greater borrowing flexibility than traditional banks.
“We’re seeing too many exhausted Kiwis disheartened they couldn’t secure finance and convinced their homeownership dream is over,” Capilitan said. “It’s great then when we can then work through their situation on a very individual basis and successfully secure a tailored mortgage for many of them.”
The managing director of Century 21 Financial urged buyers to shop around as there currently was so much variation in property prices.
“I believe 2023 will be the perfect time to buy,” Capilitan said. “It will be hard to secure finance given the banks’ almost zero appetite for risk and the lack of liquidity in the market for first-home buyers trying to secure low LVR deals. However, there are only increasing opportunities to break into the market and brokers are well placed to help.”
First-home buyers who were short of funds were also urged to consider Kāinga Ora’s new shared ownership scheme, First Home Partner.
With this mortgage storm coming, Capilitan said Kiwis need a plan to weather it.
“Everyone who is purchasing needs to know their property purpose, their likely tenure, and whether they’re happy to sit tight if need be,” he said. “They also need their own plan for servicing their mortgage – tested at the affordability of higher interest rates than today’s.
Do you agree mortgage brokers are the key to greater activity this summer? Tell us what you think in the comments below.
