IN FAVOUR OF SELLING NOW
The Reserve Bank of New Zealand ( RBNZ ) has maintained the Official Cash Rate ( OCR ) for an eighth consecutive time at 5.50 per cent , albeit with a softened tone that suggests potential rate cuts later this year . Traders and economic commentators are now pricing circa 60 basis points of cuts to the OCR by November , providing Kiwis with confidence that a comprehensive easing cycle and further rate reductions will continue into 2025 .
STEADY AS SHE GOES
Despite challenges across the economy , property prices nationwide have remained resilient .
As businesses and households adjust to restrictive monetary policies , the current residential landscape offers solid pricing for homeowners seeking a return on their investment . Those in the market stand to benefit from average national sale prices that are still considerably higher than they were pre-pandemic .
The anticipation of these interest rate reductions is likely to boost buyer confidence and , in the meantime , increase housing demand , particularly from buyers who have been watching the market carefully whilst planning for action .
These sellers are well-attuned to the benefits of a move now , with steady value growth and good inventory levels . This makes it a strategic time for homeowners and budding buyers to capitalise on the window of optimism .
ECONOMIC UNCERTAINTY
While its latest Monetary Policy Statement ( MPS ) was one of the briefest we have seen ( less than 200 words accompanied the recent OCR decision ), the RBNZ did acknowledge the downside risks to growth and inflation , signalling economic challenges for the months ahead .
With a contraction in economic activity confirmed in recent Q2 Consumer Price Index ( CPI ) data occurring concurrently with a rise in unemployment , the economic environment is expected to remain challenging . This may somewhat limit the heights of the next market upswing . Before the winds of change blow through again , selling now allows homeowners to secure a favourable result while buyer activity is on the up .
Source : RBNZ , KiwiBank
Swap rates play an important role for banks in managing mortgage rate risks . The graph below illustrates that these rates show significant fluctuations , driven by anticipation of the central bank ’ s OCR cuts .
A lower OCR rate typically translates into cheaper borrowing costs across the board , potentially stimulating market activity and property value - which is good news for homeowners eager to pick the right time to make their move .
AN APPETITE FOR HOMES
With Kiwis confident that the OCR is trending down , buyer demand will likely increase over the months ahead . Lower mortgage lending rates make homeownership more attainable , attracting more buyers into the market . This increase in demand can lead to more competitive offers and quicker sales , which is advantageous for sellers looking to pick the optimal time to make a move .
Photo : 36 Rue D ’ Amarres , Gulf Harbour , Rodney | Proudly marketed by Ross Hawkins , Ray White Epsom 7