The clocks have changed, and the days are getting longer and lighter. But are things looking brighter in the property market?

Well, if we are honest, things aren’t looking that much brighter… yet. But, there are signs of new life, just like the new life that is beginning to spring up as the seasons change.

So, let’s dive in and see what has happened in the world of finance and property in the last month.

RBNZ Has Raised The Offical Cash Rate (OCR) Again

While not totally unexpected, this month’s big news is another rise in the OCR. RBNZ has raised the rate to 3.5% with more raises expected going forward.

The Reserve Bank said monetary conditions needed to tighten further to maintain price stability and employment levels. Despite a dip in oil prices and an easing of supply chain issues, core measures of inflation have risen globally. [source]

Kiwibank economist Jarrod Kerr noted that the change will likely add more pressure to New Zealanders with a slowdown in discretionary spending and more increases in the cost of home ownership. [source]

So, what does that mean for mortgage holders? If you are starting to feel the strain of rising living costs, it might be time to consider whether your mortgage is still offering you the best solution.

Ask yourself these questions:

• Are you happy with the bank you are with?
• Do they offer all the mortgage products you need to pay down your mortgage quickly?
• Have you reviewed your mortgage in the last 24 months?

We can review your mortgage with you and look at other options, including advising whether it would be cost-effective in the long run to break a fixed mortgage term.

Auction Sales Are Improving

After a sluggish few months, auction sales appear to be on the rise. The latest figures from interest.co.nz show that in the last week of September, 75 properties sold under the hammer – a sales rate of 41%. This was up from 33% a couple of weeks ago. [source]

Barfoot & Thompson’s activity was also on the rise after a slow period. The agency is the biggest in Auckland, and it auctioned 90 properties at the end of September with the number of sales also up. [source]

Auction has always been a viable method of sale for property. Even if it does not immediately sell under the hammer, it does help to draw interest to your property. So if you are considering taking your home to auction or bidding at auction, let’s have a chat now to see what your options are.

But Prices Are Still Falling

TradeMe’s Property Price Index shows property listing numbers are still rising. However, property sales aren’t increasing at the same level and unfortunately, it would appear that prices are still falling. Some regions had more than double the number of properties for sale in August compared to the same time last year, with supply outstripping demand.

Property Sales Director Gavin Lloyd said if supply kept outperforming demand, then prices would fall further. “Prices are falling as a direct result of sky-high supply paired with comparatively low demand, taking the pressure off buyers and forcing sellers to lower their price expectations”, he said. [source]

What does that mean for buyers? Well, falling prices are still good news, but set against rising mortgage rates and increased cost of living making it difficult to have extra money to save, buying a house can still be tricky. But, not impossible. We can help you look at all the options for lending to ensure you get the deal that suits you best, so give us a call to discuss.

Fewer Home Loans

The latest figures show that mortgage lending volumes are still weak and the number of loans made in August was the lowest for the month since 2013. Report author CoreLogic says both investors and owner-occupiers are struggling. CoreLogic chief property economist Kelvin Davidson said low equity loans were particularly hard to secure.

“Given continued falls in property values, it’s not hard to understand a cautious attitude from the banks when it comes to approving loans to borrowers who already have lower equity levels”, he said. “With housing affordability still stretched and mortgage rates higher, it’s likely that fewer borrowers really want a high LVR loan either.” [source]

In saying that, lenders are still willing to give funds to those that can present a quality application. So, if you have been considering if now is the right time to make a move in the property market, let’s talk about your options.

With house prices falling, there are some great buys out there, so it’s worth doing your homework now, allowing you to pounce if the right opportunity arises. Give us a call today for honest and trustworthy mortgage advice.