First Home Buyers
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PHOTO: First Home Buyers Club director Lesley Harris says all aspects of the housing market are at present unfavourable to first home buyers. Photo: RNZ / Nate McKinnon

The Reserve Bank’s quarter percentage point rise in the official cash rate may have put an end to the one “saving grace” in the housing market.

The Reserve Bank has raised the official cash rate (OCR) by a quarter of a percentage point to 1 percent, because of strongly rising prices, a hot housing market, and a tight labour market.

The cash-rate increase puts the OCR back to where it was before the pandemic.

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According to First Home Buyers Club director Lesley Harris, the decision will lead to low interest rates slipping away, one of the only factors that has allowed at least some people to get their first new home.

With the amount of money required for a deposit and high house prices, the chances of young people getting their own place just got that much harder, Harris said.

The situation was dire, with all aspects of the housing market at present unfavourable to first home buyers, she said.

“It’s certainly rather depressing for first home buyers currently, we’re seeing struggles on all the levels you know getting the deposit, finding the house that could be considered affordable and getting the lending, all three areas are super tough at the moment.”

The outdated HomeStart grant needed a refresh to ease some pressure on first homebuyers, she said.

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