The statement comes after the OCR is raised by 50bp to 4.75%
The OCR may be up but “Kiwis borrowing to buy their first or next home still have plenty of options,” according to Tim Kearins (pictured above), owner of Century 21 New Zealand.
The statement comes after, for the first time in 2023, the Reserve Bank raised the OCR by 50 basis points, taking it to 4.75% – the highest level since 2008. RBNZ earlier predicted a 5.5% peak this year.
“Without doubt rising interest rates will put a lot of pressure on many homeowners this year,” Kearins said. “However, it’s important to remember the buck doesn’t stop with the big banks. Prospective buyers struggling to get finance, or a good rate, should ring a mortgage broker.”
Kearins said mortgage brokers often deliver more competitive rates and greater borrowing flexibility than the traditional lenders.
REINZ’s latest Monthly Property Report found that median house prices across New Zealand dipped 13.3% annually to $762,000 in January, suggesting that the pace of price declines is steadying with an overall awakening of the market last month.
Kearins said it was unsurprising that it now takes more time to sell as buyers are cautious, heightened by the recent wild weather events.
“The good news is more buyers are certainly starting to emerge, with agents reporting busier open homes,” he said. “Likewise, vendors are increasingly keen to meet the market as they know there’s a lot of stock on the market and this is likely to be a difficult winter.”
The historical average for Kiwi borrowers was about 6% or 7%, and that’s where most fixed rates with the major banks currently sit.
“While it’s far from ideal, it’s important we keep interest rates in perspective,” Kearins said. “For now, they’re not out of the ordinary, and let’s not forget borrowers can make up some ground with some great negotiation from their real estate agent.”
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