It follows Reserve Bank’s decision to hold OCR at 1%
The Reserve Bank of New Zealand (RBNZ) has decided to hold the official cash rate at 1% as conditions since August “did not warrant a significant change” to the monetary policy outlook. No worries though, as a real estate boss says the current OCR has already given the local real estate market a good shot in the arm.
Derryn Mayne, owner of Century 21 New Zealand, predicts there will be an influx of first-time buyers this summer even without further dropping the OCR.
“This summer we’ll see a lot of first-time buyers entering the market and existing homeowners deciding to borrow more to purchase their next house. Many Kiwis were holding back, but since last month’s big OCR cut more people will be taking the plunge this summer regardless,” Mayne said.
Read more: Reserve Bank releases September OCR announcement
The real estate boss advised first-home buyers to take their sums and seek professional advice on their rent payments compared to the cost and commitments of servicing a mortgage.
“Overall, this coming summer is looking like it will be comparable to last summer. However, with interest rates now even lower, I think we’ll see some buoyancy in parts, particularly at entry-level which positively flows through to second-home buyers and sellers,” Mayne said.
She added that the government’s new schemes for first-home buyers, including lower deposit requirements and wider eligibility, will also lead to more Kiwis entering the housing market.
“Sure the OCR wasn’t cut again, but last month’s surprisingly large cut was a timely boost to New Zealand’s real estate market which will be played out over the coming months,” Mayne concluded.
