She advises the government to review policies hindering the sector's recovery
The Reserve Bank of New Zealand (RBNZ) decided to keep the official cash rate (OCR) at its current level as per the guidance issued in March – and Century 21 New Zealand owner Derryn Mayne believes that it is the best decision for home buyers right now.
Mayne explained that the RBNZ’s decision to keep the OCR at its current level and scrap the loan-to-value ratio (LVR) restrictions would benefit home buyers, sellers, and the sector as a whole.
“With some mortgage rates below 3%, lower deposits now required, and the market set to become a buyers’ one, cutting the [OCR] again today would’ve not have helped many more home buyers,” Mayne said.
“No longer do first-home buyers need a 20% deposit. Coupled with servicing mortgages being cheaper than renting in many cases, and vendors increasingly willing to negotiate on price, young Kiwis have the best opportunity to get on the housing ladder in more than a decade.”
Read more: Reserve Bank keeps OCR at current level
However, Mayne emphasised that the sector still needs a boost to recover from the COVID-19 pandemic, including policy changes. She brought to light the latest Statistics New Zealand data revealing that homes transferred to overseas people dropped from 2,900 in the year ended March 2019 to fewer than 700 in the year ended March 2020.
“The government has given an assurance that it’s singularly focused on delivering things that will aid the country’s recovery,” she said. “As part of that, they should revisit their policy which stopped almost all non-residents from buying existing homes. Opening up New Zealand real estate a little more would definitely provide a boost to the housing market and country.”
“With recent statistics showing more foreign owners selling than buying, maybe we could allow those who already own property here to buy again. That would help with real estate transactions without lifting the proportion of foreign ownership.”
“It would allow overseas property investors to sell part of their portfolio and reinvest in other aspects of the sector or other parts of the country. Another idea is to just lift the foreign buyer ban in certain areas, such as Queenstown,” Mayne concluded.
