Here are the things to watch out for – straight from a property market expert
Property information and analytics provider, CoreLogic has released a list of 10 property market predections for the the year.
According to CoreLogic, market players need to watch factors including central bank decisions, the landscape for investors returns, the potential flattening off of residential building consents, and how buildings insurance premiums might change due to risk based pricing in the second half of 2019.
“It’s been a really interesting and eventful year so far for the residential property market,” CoreLogic senior property economist Kelvin Davidson said. “Now that we’re almost into July, it’s a good time to look ahead and see what might be in store for the rest of the year.”
Here is a selection of those factors that brokers can look out for and pass to clients, ranging from property value movements to further loosening of loan-to-value ratio (LVR) restrictions.
Average property values still rising but in a restrained fashion. CoreLogic said more affordable towns and cities in regional NZ are likely to record the largest increases. But, it would not be a surprise to see further weakness in Auckland.
Further loosening of the LVR rules in November. Davidson expects possible options to include lowering the owner-occupier deposit requirement from 20% to 15% and/or raising the investor speed limit for high LVR lending from 5% to 10%.
Imposition of extra capital requirements on the banks by the end of November. Davidson said this may prompt banks to offer different mortgage rates to borrowers with different abilities to service their debt.
Mortgage rate “rate wars” to be a recurring theme. This will be the case regardless of whether or not the Reserve Bank cuts the official cash rate again, he noted.
More homeowners potentially “trading up.” Homeowners could take advantage of a subdued market, especially in Auckland, to get a bigger or newer property, or in a better location. This will depend on not already being at the limit of their borrowing capacity, Davidson added.
