CoreLogic mortgage and housing forecasts for 2019

by Krizzel Canlas20 Dec 2018

What is the outlook for the New Zealand mortgage lending standards in 2019?

Despite the relaxation of loan-to-value ratio (LVR) restrictions on bank’s new mortgage loans at the start of 2019, property analytics firm CoreLogic expects banks to “stick to tough lending criteria” and so the pool of potential borrowers who can meet those requirements may not be that big.

The CoreLogic research team outlined also outlined it projections for mortgage rates and house prices in the year ahead:

What will mortgage rates do in 2019? CoreLogic stated: “The official cash rate will remain at 1.75% in 2019 (and probably most of 2020) and that should help interest rates to stay reasonably low and stable.”

However, the team also pointed to higher offshore rates and the signalling by the Reserve Bank that capital adequacy requirements will be raised over the next five years as risks that could also see mortgage rates rise.

Will house prices move up, down or stabilise? The group noted: “Generally speaking, we’d anticipate similar patterns to 2018, with average prices across the country rising by 3-5%.”

“Our crystal ball prediction is another solid year, without any major upheavals,” the CoreLogic team said. “The local market is more stabilised, but there’s still the unknown risk of offshore dynamics.

“Either way, it’ll be another busy year, with plenty to watch.”

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