Prospective sellers are also urged to use a real estate agent
“First-home buyers struggling to get finance, or a good rate, are starting to pick up the phone to mortgage brokers,” said Tim Kearins, owner of Century 21 New Zealand – and he expected more of that in the coming months as the pressure increases.
Kearins’ comments follow the Reserve Bank’s decision to raise the OCR by 75 basis points, taking it to 4.25%, its highest level since 2008.
Read more: RBNZ announces November official cash rate
Kearins said more and more people are looking beyond the banks to help them secure a mortgage for the first time or increase their borrowing.
“More often than not, mortgage brokers can deliver competitive rates and greater borrowing flexibility than the traditional lenders,” Kearins said. “First-home buyers are waking up to this, not to mention the fact that brokers do much of the running around.”
While rising interest rates are deeply troubling for many homeowners, they’re not out of the ordinary when reviewing past decades.
Read next: Affordability worst it's ever been for first-home buyers
“Historically, 6% or 7% rates have been about the average for Kiwi borrowers, and that’s where the one and two-year rates currently sit,” Kearins said. “Going forward the banks will do all they can to sharpen their pencils, but more borrowers will also be turning to brokers.”
In these challenging environments, he said the right agent and agency are critical. He also reminded prospective vendors that now is not the time to sell privately, despite the temptation to save commission costs.
A 2020 REINZ analysis showed homeowners who use a real estate agent can expect to get on average 15% more for their property than they would by selling it privately.
