Good News Is Good News
A Radio NZ headline on March 28 said: “Lower interest rates getting closer – Reserve Bank governor Adrian Orr.”
Reserve Bank governor Adrian Orr said the tide was turning on inflation around the world and there was a clear feeling among central bank leaders he had spoken to recently that interest rates have peaked and cuts are getting closer.
Director of City Realty Group, Daniel Horrobin says: “At the same time, what we are hearing is that the major banks are easing up on lending criteria.”
Daniel adds “With our corporate office reporting a substantial lift in activity across the board compared to March last year, our own results reflect that”.
“March was a strong listing month for us with the number of properties taken to auction in that month showing a 75% increase on March 2023”.
“We were delighted with the publicity a $1 reserve auction in early March for a central city leasehold apartment attracted across a range of mediums” says Daniel. “The bidding opened with a bid of $1, then $2, then $5,000, then eight live bidders and 52 bids later, the property was declared sold for $62,000, much to the relief of our very happy client and needless to say, ourselves”.
“The highlight of the month overall was on March 21 when eight of the 11 properties auctioned sold on the floor” adds Daniel.
Seller engagement is gaining serious momentum. The number of Trade Me properties for sale in the central city continues to climb and is now well above 600 after diving below 500 as recently as November last year.
At a property symposium held mid-month, a number of property/economic commentators agreed:
It’s not all good news however.
OneRoof, NZ Herald’s property portal, said on April 1: “Last week, the Reserve Bank published the latest figures on the breakdown of the existing stock of mortgages. This showed that 59% of existing loans (by value) are due to reprice within the next year”.
The same OneRoof commentary reports: “But at least the inflation trend remains in the right, downwards direction, especially when it comes to firms’ input costs, pricing intentions, and overall inflation expectations”.
Though there could still be more pain to come for some, Daniel says: “The good news far outweighs any other. With seller confidence on the rise and bank lending easing, there is a quiet optimism in the market generally”.
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How Low Can It Go? The Reserve Bank cut the Official Cash Rate (OCR) on 20 August from 3.25% to 3%. This marks a 2.5 percentage point drop since the easing cycle began exactly a year ago. In May, the bank anticipated the OCR would bottom out at 2.9% in … Read more