property buyers

PHOTO: Tony Alexander

Lockdown impact apparent

This month’s survey of mortgage advisors throughout New Zealand has yielded 70 responses telling us the following.

Banks remain as willing to lend on average this month as last month, but there is far more scrutiny being applied to client expenses and income sources than ever before. Low deposit loans are harder to secure for clients and there is increasing bank wariness of funding some people into purchasing off the plan as costs escalate.

Lockdown has had an impact on the level of enquiry from both first home buyers and investors. The delay in interest rates going up may have contributed to a slight shift in fixed term preference back towards two years from three years.

But these remain the most favoured terms to fix and there is as much interest now in fixing one year as in fixing five years – virtually none for either term.

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More or less first home buyers looking for mortgage advice

How much deposit do you need to buy a first home in NZ?A net 16% of the mortgage advisors replying in this month’s survey have reported that they are seeing fewer first home buyers coming forward for advice. This is a deterioration from the net 3% last month who were seeing more first home buyers.

The change is not unexpected in light of the decline seen in August last year when Auckland went into lockdown from the 12th. Back then the change was from +45 to -10 which is a far greater slump than the 19% this time around.

This reduced decline provides some further evidence that this lockdown is being viewed in different terms than the other two significant events. Why? Probably because of the overwhelming evidence that when lockdowns end the hosing market surges anew.

More or less investors looking for mortgage advice?

A net 56% of mortgage advisors have reported seeing fewer investors stepping forward for mortgage advice. This is a very weak result. However, it is in line with the situation from March to June this year and represents some giving back of the improvement seen from July, which was itself substantially unwound anyway in August where most replies to our survey came in before the country went into lockdown.

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