PHOTO: Tim Kearins, Owner of Century 21 New Zealand
“Those borrowing to buy their first or next home have six weeks of likely interest rate stability so now could be a good time to pounce,” says Tim Kearins, Owner of Century 21 New Zealand.
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His comments come ahead of the Reserve Bank – for the first time in 2023 – reviewing the Official Cash Rate on 22 February. In its last review in November, it hiked the OCR by 75 basis points, taking it to 4.25% – its highest level since 2008 when it reached 8.25%. It has forecasted a peak of 5.5% this year.
“Without doubt rising interest rates will put a lot of pressure on many homeowners this year. However, we must keep it in perspective. When you review interest rates in New Zealand over the past decades, for now they’re not out of the ordinary,” says Mr Kearins.
The Century 21 leader says historically, six or seven percent rates have been about the average for Kiwi borrowers, and that’s where most fixed rates with the major banks currently sit.
“The Reserve Bank has given everyone plenty of notice where interest rates are heading in 2023. Given we’re effectively still on 2022 rates, this summer could prove to be a good time to lock in a reasonable rate for a property at a reasonable price,” he says.
Mr Kearins says all eyes will be on the Real Estate Institute’s release of December’s sales prices and volumes next week. Nationwide statistics for November showed a lift in activity, with the number of sales increasing by nearly eight percent from October.
“The market is softer and slower overall this summer, but there are still pockets within cities and around the country that are bucking the trend. If you’re contemplating buying or selling, a good real estate agent will tell you where the opportunities are,” he says.
Likewise, the realty boss says prospective buyers struggling to get finance, or a good rate, should ring a mortgage broker.
“Kiwis are increasingly looking beyond the big banks. Often mortgage brokers can deliver more competitive rates and greater borrowing flexibility than the traditional lenders,” says Mr Kearins.
Having Century 21 Financial is a big point of difference and competitive advantage for Century 21 New Zealand in the local real estate market. He says its Managing Director Julius Capilitan is getting busier, delivering great deals for C21NZ clients up and down the country.
He says among the economic doom and gloom there are some positive things which will help both buyers and sellers. Migration is starting to slowly return and last year’s changes to First Home Grants and First Home Loans means more New Zealanders have access and support to get into their first home.
“This summer many tenants sick of paying record high-rents will hit the mortgage calculators. If they can cobble together a deposit, many will be keen to get on the ladder before increasing interest rates only make homeownership harder,” says Tim Kearins.
ENDS
Contact: Tim Kearins – Century 21 New Zealand – (0274) 495-547
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