What factors are contributing to buyer confidence ?
Interest rates continue to underpin purchasers buying power , and today interest rates remain at low levels , advertised from 2.99 per cent fixed for one year with the OCR currently at 0.50 per cent . The next Monetary Policy Review Announcement is set for 24 November 2021 .
• Interest rates are a driver of home affordability , and in many areas , while prices have risen in the last 12 months , corresponding interest rates have reduced .
• Further tightening of loan-to-value restrictions on November 1 is seeing first-home buyers remain active while current lending conditions are supportive .
• The graph below shows the monthly home loan pre-approvals recorded by the Loan Market Group , our loan brokerage partner and New Zealand ’ s largest independent broker that settles over NZ $ 650 million in loans per month . Pre-approvals are indicative loan approvals obtained by buyers before buying a property to enable them to bid confidently .
• A degree of pent-up demand as COVID Alert Levels lift .
This chart compares the number of loan pre-approvals submitted via Loan Market brokers over the past three years .
# Loan Pre-approvals / 28 days
2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
2019 2020 2021 Source : Ray White Online Analytics