First-home buyers still active, investor demand rising

The October mortgages.co.nz & Tony Alexander Mortgage Advisers Survey attracted insights from 59 mortgage advisers across the country, revealing strong buyer demand despite slower bank turnaround times for processing applications.

First-home buyers and investors are both staying active, while borrowers continue to favour short-term fixed rates, Alexander (pictured above) said.

First-home buyers stay active, demand dips slightly

A net 39% of advisers reported an increase in first-home buyer inquiries, down from 51% in September, but still indicating that young buyers are present.

“Banks are more open to business now than earlier in the year,” said one adviser, noting that cash incentives and pragmatic policy changes are helping first-time buyers enter the market.

However, LVR lending remains challenging, with over 80% loans still tough to secure, the survey found.

Investor interest rises to strongest level since 2020

Investor activity has surged, with a net 47% of brokers seeing more investors in the market – up from 35% in September. Falling interest rates and a sense that now is the best time to buy are driving this demand.

“Mum and dad investors seem to be making moves, and banks are happy to accommodate,” one broker said.

Another noted more investors are buying newly issued homes with fewer restrictions on insurance and body corporate checks.

Banks easing lending criteria gradually

A net 34% of brokers noted that banks are becoming more willing to lend, though this figure has dropped from 57% last month.

Advisers pointed to softened lending policies, including reduced restrictions on rental income assessments and improvements in insurance-related processes.

Short-term interest rate fixes dominate

Borrowers continued to prefer fixing their mortgage interest rates for shorter terms, with 93% of brokers saying clients are choosing terms of one year or less, particularly six months.

With further rate reductions expected, this trend is likely to continue.

Refinancing interest slows but remains strong

Although refinancing inquiries have decreased since last month, a net 27% of advisers reported an uptick in property owners exploring refinancing options.

As interest rate shifts persist, many borrowers are reassessing their loan strategies to manage exposure effectively.

Download and read the report in full.

Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.