A message from our chief executive
Dear Property Owner ,
Another Monetary Policy Statement ( MPS ) has passed with another stay in the Official Cash Rate ( OCR ) - which was kept unchanged for the eighth consecutive time at 5.50 per cent .
While the metrics might have remained status quo , the brief accompanying statement spoke volumes . The Reserve Bank of New Zealand ( RBNZ ) acknowledged that the country ’ s economy has clearly responded to its restrictive monetary policy measures , fuelling market expectations that a rate cut will be delivered this side of the new year .
Kiwis are now confident that the next move for mortgage lending rates will be down , and they ’ re also growing in conviction that the easing cycle will have started by November .
Anecdotally , we have already seen the anticipation of a reduction in interest rates feed through to a lift in housing demand , with more sellers tuned into economic developments than perhaps any time in recent history . This means that both buyers and sellers have become more responsive to changes in market sentiment , with those who have been patiently waiting on the sidelines for optimal conditions , are primed to act quickly and decisively .
These changes may fundamentally affect the market ’ s dynamics , gradually boosting activity among residential investors . Meanwhile , first-home buyers , who have dominated the market for the past two years , face increased competition .
A few days following these policy changes , Housing Minister Chris Bishop announced sweeping revisions to the Government ’ s housing and development agenda , with a radical deregulation of urban housing markets . Reforms are likely to take several years to impact pricing and supply levels . However , the average house price could decline in nominal terms , assuming that more affordable homes are eventually added to the country ’ s supply pool .
There ’ s a lot of water to go under the bridge until then , and we will continue to monitor economic indicators and the mood of the housing market to provide the latest insights to support our Ray White clients and customers in their informed decision-making .
While it is encouraging to see the RBNZ becoming more responsive to the economic pressures Kiwis face at the frontline , changes in the political landscapes of major economies like the United Kingdom , France , and the United States remain firmly on our radar .
July has brought us a crescendo of big news stories for the housing market . Debt-to-Income ( DTI ) rules were introduced on the first of the month . While these changes have not yet significantly impacted transaction values , they were accompanied by an easing in deposit requirements through updated Loan-to-Value ( LVR ) rules and a reduction in the Brightline Test ( BLT ) period from 10 to two years .
Despite occurring abroad , recent political violence and instability can create volatility in global markets , with ripple effects for local investment portfolios , currency exchange rates , and overall economic confidence in New Zealand .
Photo : 36 Rue D ’ Amarres , Gulf Harbour , Rodney | Proudly marketed by Ross Hawkins , Ray White Epsom
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