Property Affordability Improves as Loan Costs Fall: ANZ Property
Nov. 24 – Property affordability in New Zealand has improved though a quick rebound in the market isn’t anticipated,
according to ANZ Bank’s Property Focus.
The bank’s property gauges show affordability is improving though it is “a slow grind down,” bank said in its report
today. Costs for servicing a home loan remained high, and rising, according to the November report. Consents and house
sales were at “rock bottom,” levels not seen for 15 years.
The bank reiterated its advice that those seeking a mortgage should aim to fix for just six to 12 months because of the
prospects of further rate cuts by the Reserve Bank of New Zealand. It predicts a 100 basis point cut to the official
cash rate next week, pushing the OCR down to 5.5%, amid signs of a prolonged economic slump.
“The economic picture is still one of weakness despite the RBNZ moving aggressively,” ANZ bank said. “Critical now for
both the economy and the housing market will be the state of the labour market and how high the unemployment rate gets.”
Reserve Bank Governor Alan Bollard has embarked on his steepest easing cycle since the OCR was introduced in 1999 to
help revive an economy that may have contracted at least three quarters in a row.
Home-building approvals rose in September a seasonally adjusted 8.4%, though this mainly reflected a gain in consents
for apartments. Excluding apartments, consents fell 0.8%.
Fletcher Building Ltd., the biggest construction company on the NZX 50 Index, rose 1.9% to NZ$5.52 today. Fletcher has
declined 54% this year.
(Businesswire)
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