As more New Zealanders feel that interest rates have stabilised and will slowly come down, this will change the sentiment in the housing market.
(Watch the video for more info).
Banks are discounting their interest rates
Banks are competing for your mortgage.
Fewer people are buying houses, which means fewer people are taking out new lending.
Will the banks drop their profit and revenue targets in response? Unlikely.
Although the advertised rates haven’t moved much … our mortgage team sees banks offer steep discounts.
One bank an investor a 6% 1-year rate, down from the 6.5% advertised rate. The investor also got a 1% cashback.
Another bank recently offered new borrowers a 4.99% 1-year fixed rate.
You might not see the war for your mortgage on billboards, but behind-the-scenes mortgage advisers are getting investors steep discounts.
House prices vs incomes are back at pre-pandemic levels
Covid made house prices go crazy, and house prices got out of whack with wages. Today things have changed.
Yup, house prices are up 20% since March 2020. But wages are also up 17%.
The labour shortage is driving incomes up, while house prices are still coming down (February excluded).
The house price to income ratio is only a whisker above where it was pre-pandemic.