Buyer interest cools, lending loosens
The monthly survey conducted by mortgages.co.nz and Tony Alexander (pictured above), featuring insights from 51 mortgage advisers, revealed evolving trends in New Zealand’s residential real estate market.
“Buyer interest in residential property remains but it has eased slightly recently,” Alexander said in a media release, suggesting a more cautious approach among potential buyers.
Lending criteria and borrower preferences
Banks are gradually easing their lending criteria, providing a bit more flexibility for borrowers. Most notably, borrowers are showing a strong preference for fixing their interest rates for short periods, primarily one year or less, reflecting uncertainty about future economic conditions.
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First-home buyers and investors
The survey indicated a mixed response among first-home buyers and investors. A net 16% of mortgage brokers noted an increase in first-home buyers, a decrease from previous months, signalling caution due to economic uncertainties.
On the investor side, a net 10% of advisors reported seeing more investors, although this number is significantly down from earlier in the year, reflecting a cautious sentiment amid rising operational costs.
Comments on bank lending to first-home buyers included positive changes such as “Two banks are now offering 60-day preapprovals for main-bank first home buyers” and the introduction of “boarder income for low-deposit lending and First Home Loan products.”
Lender willingness and refinancing trends
Despite the cautious climate, a net 20% of brokers indicated that banks are becoming more willing to advance funds, although this is down from earlier in the year.
The trend towards refinancing continues to rise, with an increase in inquiries for the fourth consecutive month, driven by cost-of-living pressures and concerns over job security.
Outlook and strategic decisions
The survey reflected a property market that is adapting to economic pressures, with both buyers and lenders making strategic decisions based on anticipated changes in the economic landscape.
“It’s probably another 12 months before it will feel like the worst of the downturn is behind us,” Alexander said.
Download the full mortgages.co.nz & Tony Alexander Mortgage Advisers Survey report for April 2024. The media release can be accessed here. For other recent reports by Tony Alexander, click here and here.
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