#4 – Interest rates will probably come down
Interest rates have gone from their lowest point ever to their highest point in 15 years. All that happened in the last 24 months.
Interest rates will likely go down over the next few years. The question is when.
New inflation data came out yesterday. Inflation dropped from 4.7% to 4%. It’s the lowest level in nearly 3 years.
That sounds like good news. And it is (in part).
But domestic inflation is really high.
Domestic inflation is usually higher than imported inflation.
The issue is that domestic inflation is being sticky.
So, it’s more likely that the Reserve Bank will cut the OCR in November rather than August.
#5 – Changes to getting a mortgage
Getting a mortgage will soon change, too.
The Reserve Bank will probably bring out new Debt-to-income restrictions (DTIs) mid-year. That will tighten some parts of the market up.
At the same time, they will let property investors buy properties with slightly lower deposits (LVR restrictions).
Then Andrew Bayley, the Commerce Minister, wants to loosen the lending rules. He plans to roll back parts of the CCCFA to get more lending going.
#6 – House prices are in recovery mode
House prices are now in recovery mode. That comes after they fell by more than they ever have (since the data began in 1992).
But at the national level, the recovery stalled over the last 6 months.
