Ongoing low interest rates are little consolation to first-home buyers if the deposit hurdle remains far too high, Century 21 claims on the back of RBNZ’s announcement that the Official Cash Rate (OCR) will remain at 1.75%.
Century 21 New Zealand national manager Geoff Barnett said REINZ’s release of February’s real estate data and QV House Price Indexes show the Auckland market has normalised over the past year.
He believes RBNZ now needs to look at further softening its loan-to-value ratios, particularly for Auckland first-home buyers.
“RBNZ’s higher deposit requirements have definitely helped to cool an overheated market in Auckland. But a review on the LVR restrictions now needs as to happen as too many first-home buyers are missing out at a time when interest rates remain so attractively low.
“Keeping the outdated LVRs in place is somewhat cruel given many first-home buyers could easily service a mortgage but most still have to come up with a 20 percent deposit first. In Auckland the required deposit can equate to about $200,000 for the average property!”
Barnett acknowledges that LVR restrictions have been softened somewhat since 1 January but says the RBNZ now needs to look at further easing.
“It’s about enabling young New Zealanders into the housing market. Now’s the time to do just that as rents continue to rise, many fixed interest rates are set to remain well below five percent, and Auckland has finally become more of a buyers’ market.
“The planets are finally aligning for first-home buyers, but sadly many can’t even get out of the starting blocks because of the prohibitive deposit requirements still place. Now’s the perfect time for first-home buyers to get a fairer go,” Barnett added.