Get ready for some competition as Quotable Value (QV) has pointed out that the predicted loosening of loan-to-value ratio (LVR) restrictions could attract new players into the market when couples with reduced interest rates helping to bridge the affordability gap.
David Nagel, general manager at QV, said that all eyes are now on the Reserve Bank of New Zealand (RBNZ)’s upcoming announcements.
“As we head towards summer, all eyes will be on the RBNZ to see what happens with LVR’s in their November announcements. With many economists also predicting further cuts to the OCR in November, the property market could be in for a late spring surge as we head into summer,” Nagel said.
Read more: Economists predict “small loosening” of LVR in November
Nagel also pointed out that the residential markets of all the main cities in the country have shown value growth over the quarter, which may have been driven by the recent reduction in interest rates.
The average value throughout the country has increased 2.8% year on year, to $697,204 – an increase of 1.4% over the past three months.
“Even the markets which have struggled over the past few months, such as Auckland and Christchurch, are showing resurgence in prices achieved,” he said.
“The key property market drivers have remained strong over the past few years with low interest rates, a positive economic sentiment as well as net migration continuing to fuel housing demand. Countering these positive drivers are affordability challenges, where the price of housing in a number of locations has increased to a level many New Zealanders simply cannot afford.”