Low fixed mortgage rates and a hold on the OCR has yielded a stable borrowing environment, says property analytics firm
The lending environment looks stable for the foreseeable future, says property analytics firm CoreLogic.
According to the firm, this could be attributed to the fixed mortgage rates being generally flat –even dropping slightly in recent weeks – and with the Official Cash Rate (OCR) set to remain on hold until late 2019.
“Such a stable mortgage rate backdrop will reassure the 90% of NZ borrowers (on a floating rate or have their fixed rate review due) who are exposed to any rate rises over the next two years,” says CoreLogic head of research Nick Goodall.
CoreLogic says the current national average property value sits at $678,856, up $47,700 from the previous year.
“Banks are testing borrowers on their ability to service mortgages at much higher rates than what the current interest rates are,” the firm stated. “The ‘best borrowers’ (generally those tested by the banks as able to meet their repayments at a mortgage rate of at least 7%) are enjoying strong competition from the banks for their ‘business.’”
“On top of relatively stable lending conditions here, concerns of higher offshore financing costs have been dissipating, which means the outlook for mortgage interest rates remains low.”
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