Ray White Now 2022 - November New Zealand Ray White Now 2022 - November New Zealand | Page 17

SO WHAT FACTORS CONTRIBUTE TO MARKET SENTIMENT ?

Interest rates continue to underpin purchasers ’ buying power . The OCR currently sits at 4.25 per cent , with the next monetary policy review announcement set for 22 February 2023 with another rise forecast .
• Interest rates - are a driver of home affordability . Continued rate rises over the next period are expected , with predictions that all mortgage rates could be above 6 per cent over the coming year . This will make rates well over double what they were a year ago .
• Lending environment - rising interest rates and the cost of living , tax legislation and property regulation tightened lending criteria , and global events with macroeconomic impacts continue to impact the lending landscape .
• Affordability - across New Zealand , median prices for residential property ( excluding sections ) decreased 7.5 % annually , from $ 892,000 in October 2021 to $ 825,000 in October 2022 .
• Housing supply - at the end of October , the total number of properties available for sale across New Zealand was 26,577 — an annual increase of 74.7 %, from 15,217 in October 2021 .
• Net migration - the current net migration rate for New Zealand in 2022 is 2.649 per 1000 population , a 4.54 % decline from 2021 . The negative net migration rate will likely impact the property market , with economists predicting that the country would no longer be suffering a housing shortage by mid-2023 .
• Inflation - is currently at a 32-year high of 7.2 per cent . In general , inflation occurs when demand for goods and services in the economy is outpacing supply . This leads to widespread shortages of labour and materials . For example , when lots of people want to build a house , it becomes hard to source materials and construction workers , so building costs increase .
LOAN PRE-APPROVALS
This chart compares the number of loan pre-approvals submitted via Loan Market brokers over the past three years .
# Loan Pre-approvals / 28 days
1,400 1,200 1,000 800 600 400 200
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2020 2021 2022
Source : Ray White Online Analytics
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