This month, the news from the housing market is actually quite cheerful – at least if you are a buyer. Mortgage rates have dropped again, prices are lower, and there are plenty of properties to choose from.

Don’t panic if you are considering selling though, it’s not all bad news.

Let’s look at the latest news and see what bright spots there are for buyers this month.

Are We Entering A Buyers Market?

More Good News For Mortgage Rates

Last month we reported good news with drops in mortgage rates, and there’s more of the same this month. Most major banks have cut their fixed-term loan rates, some by quite considerable amounts. [source]

Why is it happening? Well, competition appears to be biting at the banks. They seem to be generating better offers in an attempt to increase a share of borrowers in a tight market. The ability to do this is helped by wholesale interest rates easing.

The rates for longer terms, including four and five year rates, have been cut, with borrowers happy to lock in longer terms in a bid to protect themselves from fluctuation.

Is this the right move? If you can plan far enough ahead and know that you can cope with repayments for the next few years, then fixing for a longer term at a better rate can be a good idea. But of course, you do risk floating rates falling and being stuck with something that becomes unfavourable.

The best thing to do is talk to us before you make any decisions, and we can help you see what’s best for your financial situation. If you already have a mortgage but think you can get a better deal, we can talk you through your options for breaking your current loan and whether it’s worth it.

Is It Now A Buyers Market?

There’s good news if you are looking for a new home – it seems that buyers are now really in control of the market. Prices are still dropping, and the number of homes available for sale is twice that of a year ago according to realestate.co.nz.

That means more choice for buyers and the possibility of a bargain. Vanessa Williams from realestate.co.nz says the scales have tipped. “Buyers’ FOMO (fear of missing out) is decreasing. The scales have tipped. Buyers now have the edge,” she said. [source].

Asking prices are also still declining in all regions. The national average asking price on realestate.co.nz was down just under 9% last month. So, if you are considering buying, now could be the time to do it. Chat with us to see what your options could be.

First Home Buyers Seem To Be Faring Better Than Most

The latest figures from the Reserve Bank and the Real Estate Institute of NZ show that first-time buyers are still prevalent in the market. While sales to first home buyers are down in line with the rest of the market, they haven’t fallen as much.

First home buyers accounted for almost 40% of residential sales in June. Figures also suggest that first home buyers haven’t reduced the amount they are willing to borrow or buy for, they are just getting better homes for the price. [source]

It’s been suggested that the statistics are because first home buyers are more likely to have stronger motivation to buy, while existing homeowners who were thinking of trading up and property investors might be more likely to wait in the current market.

So, if you are a first-time buyer, then the current market might be a great time to get on the property ladder, and you might even be able to afford more than you thought. It’s easy to get into a financial situation you can’t handle, though. Talking things through with a mortgage advisor is a good idea. We can help you analyse your finances properly and give you a range of mortgage options so you get a good deal.

The Government’s Clampdown On Foreign Buyers Looks To Be Having An Effect

In 2018, the government introduced new rules to restrict house sales for those who did not hold citizenship or residency. Since then, purchases of homes by foreign buyers have dropped 91%. In fact, in the June 2022 quarter, just 96 properties were bought by foreign owners compared to more than 1000 in the June 2018 quarter just before the new regulations came in. [source]

While this is good news for buyers with more properties likely to be available to local purchasers, it may not be such good news for sellers who often looked to foreign buyers to drive interest or raise prices.

Fortunately, it’s not all doom and gloom for sellers. There are still motivated buyers out there, especially in the first home sector. And if you are selling and buying in the same market, then the reduced purchase prices won’t have much of an impact on the final outcome.

If you have any concerns, the first thing to do is to speak with an expert mortgage advisor, like the team here at Mortgage Suite. We can help you establish what you can achieve and how you can reach your property goals regardless of what the market is doing. Contact us today.