PHOTO: Tim Kearins, Owner of Century 21 New Zealand
“Interest rates are still a lot lower than when they peaked in past decades. What’s more, servicing a mortgage remains comparable, or even cheaper, than paying current record-high rents,” says Tim Kearins, Owner of Century 21 New Zealand.
His comments follow the Reserve Bank lifting the Official Cash Rate by 25 basis-points to 1.00% – marking the third consecutive OCR hike since October last year.
“Yes, the OCR is now at 1.00% which is the highest it has been for two years. However, let’s not forget that in April 2015 it was at 3.50% and in June 2008 it was at 8.25%.
“Historically, six or seven percent interest rates have been about the average for Kiwi borrowers. So, today’s rise in the OCR needs to be put in perspective. We’re coming off a period of extraordinary low interest rates after the OCR didn’t move from 0.25% for most of 2020 and 2021,” says Mr Kearins.
The Century 21 leader says New Zealand’s property market remains relatively resilient despite the arrival of Omicron, tighter lending restrictions, rising interest rates, and a softening of prices forecast.
While sales volumes were notably down, REINZ’s latest January statistics showed median house prices up by 20.5% compared to the same period last year. At the same time, seasonally adjusted figures saw prices hold up slightly better than expected, showing a 1.4% monthly increase from December to January.
“Century 21 agents have been reporting considerably more activity for February, with listings lifting. Buyers are keen to lock in a good interest rate while they can, and many vendors want to secure a sale before the uncertainty of this coming winter.”
He says despite weathering two years of closed borders, lockdowns, and ongoing restrictions, New Zealand’s residential property market has gone from strength to strength.
“The speed of growth is certainly slowing, but good properties remain in strong demand and that will continue in the foreseeable future. First-home buyers need to keep in context that compared to past decades, interest rates remain favourable,” says Tim Kearins.
ENDS
Contact: Tim Kearins – Century 21 New Zealand – (0274) 495-547
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