July 1, 2024 – a big day for the housing market. The bright-line test has been scaled back from 10 years to two years, the loan-to-value ratio (LVR) rules have been loosened, and the debt-to-income ratio (DTI) caps came into force.
Director of City Realty Group, Daniel Horrobin comments: “What will probably be the most interesting for us is the influence the Brightline scale back to two years will have on investor intentions for their current portfolios. Will we see an increase in stock, which in the central city market is currently sitting comfortably into the 600’s after falling below 500 properties this time last year ? With so many other moving parts in the wider economic space it’s difficult to predict.”
Meanwhile back on interest rates, independent economist Tony Alexander has this to say: “At this stage, I struggle to find reasons for believing that price movement in the housing market will shift upward through winter and spring. But come summer, falling interest rates are likely to start turning things around.”
Daniels says: “This is in line with reports we are hearing which are that borrowers re-fixing interest rates right now are being advised to fix for only six to 12 months.”
This is further supported by CoreLogic reporting back in April this year that a record number of homeowners fixed on one-year terms in February, suggesting they are betting on possible interest rate falls in the near future.
Our very own Loan Market partner in our office, Jamie Maclennan adds: “Most of our clients are locking in for six,12 or 18 months at the moment with the view that we are hopefully past the peak for interest rates, and starting to make our way back down. With inflation seemingly trending in a better direction we are hoping the highest period is now behind us.”
On the auction floor this past month it’s been business as usual, reports Daniel. “Owners serious about selling are being presented with a genuine opportunity to do so with auction room activity through June producing 118 bids across 19 properties.”
“In fact,” adds Daniel, “the likelihood of selling your apartment within 90 days is far, far more likely by auction than non-auction methods, as shown by our last six months’ statistics.”
“In addition to that, our open home visitor numbers consistently demonstrate that auction properties attract significantly more interest from buyers. In the month of June alone, four auction properties were sold prior to their planned auction dates, indicating a strong willingness from buyers to engage with genuine sellers.”
“On that same topic,” continues Daniel, “over the month of June we met 271 open home visitors, a little down on May but still a healthy turnout.”
“In the rental space, rents have softened somewhat and properties are taking a little longer to move, so again, business as usual” reports Daniel.
“It’s steady as we go as the mid-winter months beckon,” concludes Daniel.
To finish on a bright note for the central city, policemen walking the beat were spotted at the foot of Queen St on Matariki holiday Friday, as police patrols on main streets increase. We say: “A very big welcome back.”
OCR Drop Sparks Market Optimism The Reserve Bank’s much-anticipated Official Cash Rate (OCR) cut on February 19 did not disappoint, says Daniel Horrobin, Director of City Realty Group. As reported by Stuff on February 20, the OCR was lowered by 50 basis points to 3.75%, with banks quick to respond … Read more
Big Day Out “Our BIG Auction Day on 30 January was eagerly anticipated and did not disappoint” reports Daniel Horrobin, Director of City Realty Group. But first. “As we await the upcoming OCR announcement on 19 February” says Daniel, “banks generally appear to be getting on with business with Stuff … Read more