First-home buyers, investors return
The latest mortgages.co.nz and Tony Alexander Mortgage Advisers Survey for November showed a notable resurgence in mortgage activity, with first-home buyers and investors showing increased interest.
Of the 75 mortgage advisers surveyed, many observed significant shifts in the market, driven by falling interest rates and anticipated monetary policy changes.
First-home buyers on the rise
A net 55% of mortgage brokers reported seeing more first-home buyers this month, up from 39% in October – the highest level since October last year.
Falling interest rates and growing expectations for stronger housing activity have encouraged young buyers to re-enter the market.
Advisers noted several challenges, including stricter bank policies. Banks are increasingly favoring applicants with a 20% deposit and live deals such as signed agreements or auction bids.
“Turnaround times are a minimum of 10 working days for most lenders,” one broker said, reflecting widespread frustration over delays.
Still, lower test rates and competitive offers like cashbacks are making it easier for some first-home buyers to secure financing.
Investors return to the market
Investor interest has surged to record levels, with a net 60% of brokers reporting more investor activity, compared to just 9% four months ago. Falling interest rates have offset concerns about declining rents and rising unemployment.
“Investors seem to be coming back in force,” one broker said. “Never a better time than right now for investors to be back in the market.”
Lower test rates and reduced rental income shading have eased the path for many.
Lending flexibility tightens amid processing delays
Only 17% of brokers said banks were becoming more willing to lend, down from 34% last month. Long processing times remain a significant challenge, frustrating both brokers and borrowers.
Floating rates gain traction
While most borrowers still prefer fixing rates for 6-12 months, 11% of brokers noted a shift toward floating rates. Many borrowers are waiting for the next official cash rate decision, with widespread expectations of a 0.5% cut.
Refinancing demand climbs
A net 49% of brokers reported increased refinancing inquiries, reflecting the impact of falling interest rates and anticipation of further reductions.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
