Interest rate cuts spark optimism
Following the Reserve Bank’s recent decision to reduce the OCR from 5.5% to 5.25%, major banks have begun lowering their mortgage rates, potentially bringing positive momentum to a housing market that has struggled with high interest rates over the past two years, according to Bayleys.
A year of two halves?
Chris Farhi (pictured above left), Bayleys head of insights, data and consulting, described the first half of the year as a “weak neutral,” noting the sluggish sales despite increased listings.
“Buyers have been distracted by all the different options that are out there,” Farhi said, attributing this to high interest rates and vendors’ reluctance to adjust prices.
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What’s ahead for the next six months?
With inflation dipping and interest rates stabilising, Infometrics Principal Economist Brad Olsen (pictured above right) sees “green shoots” in the second half of the year.
“It’s a feeling that there’s light at the end of the economic tunnel,” Olsen said, though he warned against expecting a rapid recovery.
Adaptability is key in this housing market
Olsen advises both buyers and sellers to remain flexible and realistic about pricing.
“You’re not going to get top dollar, but you’re not going to get super cheap either,” he said.
On mortgage rates, many homeowners are opting for shorter terms, anticipating future cuts, but Olsen cautions against assuming significant rate drops in the near term.
“It would pay to go through it all with an advisor,” the Infometrics leader said.
Read the Bayleys insights in full here.
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