Mortgages

Advisers buoyed by strong property market

The New Zealand property market has emerged strongly out of lockdown, according to mortgage advisers, who say they are busy as ever this winter.

Monday, July 06th 2020

As the nation came out of lockdown in May, home buyers and investors are as keen as ever to participate in sales and auctions, according to leading advisers.

Kris Pedersen, of Kris Pedersen Mortgages, says his business is "crazy busy" at the moment.

"Originally I thought it would just be pre-approvals for investors wanting to get ready for bargains, but we are seeing properties purchased and clients missing out in multi-offer situations. I think the interest rates may be a partial driver."

Joel Oliver of SuperCity Mortgages also reported strong activity in Auckland.

"I have financed everything from baches to investment properties. Common is an owner-occupied buying a new home and renting out the existing home, as the rates are so cheap and rent demand still high. The house purchase bracket of $1.5mil to $2.5mil is strong, usually someone’s second or third home."

iLender's Jeff Royle says he has been busy since the lockdown.

"Nothing has changed really, we still have a housing shortage, the demand is still high, many Kiwis overseas buying back home, and rates on the floor with no sign of rising anytime soon," he says.

"Credit criteria [is tightening at high LVR but there are a lot of people with good deposits around," Royle adds.

The feedback suggests the property market is enjoying a resurgence since the nation moved into alert level one.

Figures from The Real Estate Institute of New Zealand last week revealed early signs of confidence in the market in May.

According to REINZ, weekly sales started at 355 in the first seven days of the month, but ended May with 1,372 sales in a week. A typical May month would see around 1,700 properties sold each week.

June figures are expected to reflect further confidence as buyers look to capitalise on record-low mortgage rates. Fund manager Nikko AM suggests rates could drop below 2% due to Reserve Bank measures.

 

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