Misc

NZ’s rising unemployment will sap housing demand, ANZ says

New Zealand’s unemployment rate, set to rise this year, will likely sap demand for housing, offsetting the benefits of falling mortgage rates, according to ANZ bank’s Property Focus report.

Monday, January 26th 2009

“As far as the property market goes, all eyes will be on the job market, with anecdotes and evidence pointing to a rapid rise in the unemployment rate,” economists at the bank said in their monthly report.
    

The bank’s property gauges for January indicate a base may be forming in the property market, with housing, while still ‘expensive,’ now the most affordable in two years. The median house price fell 4.8% to NZ$337,500 in December from a year earlier and prices will probably fall further in 2009, according to the report.
    

“The Reserve Bank is providing support by cutting interest rates aggressively,” ANZ economists said. “But such action needs to be read in conjunction with the economic climate and a world-wide recession.”
    

Fixed-term mortgages have now ‘caught up’ to variable rates, with terms of 6 months to 5 years now close to 7%. As the central bank cuts the official cash rate further, short-term rates are likely to fall further than longer term rates, creating a positive yield curve for the first time in almost a decade, ANZ Bank said.     

“At some stage, borrowers may wish to consider taking a step up into a more expensive longer-term fixed rate if they would like longer-term certainty,” the bank said. Still, “by remaining floating, or fixing for just six months, you will have the benefit of being able to review the situation later in the year.”
    

New Zealand’s unemployment rate will probably jump this year in the face of a faltering economy and the global financial crisis, Prime Minister John Key said this month.
    

The jobless rate could climb to 7% later this year from 4.2% currently, and reach 7.5% in 2010, Key said after a briefing from the Treasury.

Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
Wairarapa Building Society 7.15
BNZ - Classic 7.24
TSB Special 7.24
ASB Bank 7.24
ANZ Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

More Stories

Support for regulation

Monday, March 18th 2024

Support for regulation

REINZ has emphasised the need for property management regulation to Parliament’s Social Services and Community Committee.

A better investment market

Thursday, March 14th 2024

A better investment market

“Reinstatement of interest deductibility starting from the new tax year on 1 April brings property investors back in line with every other business in the country, where interest costs are a legitimate deductible expense," Tim Horsbrugh, New Zealand Property Investors Federation (NZPIF) executive committee member says.

[OPINION] Recessionary times

Thursday, March 14th 2024

[OPINION] Recessionary times

It is not the best out there for many businesses and property sector people. Sales are down across the board, our clients’ confidence is falling, and there is a lot of uncertainty.

Interest rate expectations: It’s not over yet

Thursday, March 07th 2024

Interest rate expectations: It’s not over yet

Most Kiwis think interest rate increases have peaked.