The Reserve Bank of New Zealand (RBNZ) has recently slashed the official cash rate (OCR) by 0.75%, and real estate boss Derryn Mayne believes that the decision would help carry the real estate momentum in the country.
Mayne, the owner of real estate firm Century 21 New Zealand, said record-low interest rates would provide certainty and confidence in the sector regardless of how much the retail banks pass onto borrowers. She also expected that mortgage calculators would continue to get busy as the central bank urges banks to keep lending.
“More first-time buyers will inevitably enter the market, and existing home buyers will consider the forecast low borrowing costs a good opportunity to take their next step on a bigger or better property,” Mayne said.
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Mayne predicted a continuous robust demand for housing in the country and an increase in sales volumes and prices.
“Auckland is rallying again, rents everywhere from Westport to Wellington at all-time highs interest rates, and now interest rates are set to stay rock bottom,” she continued. “Let’s not forget that earlier this year, most property commentators were predicting a seven to 10% increase in residential property values for 2020, and they’ve yet to reforecast that.”
“Whether you’re sick of paying huge rents or a retiree who’s barely getting a return from their savings in the bank, buying property has never looked more attractive when all the alternatives are considered.”