Ray White Now New Zealand - September Edition - Page 21

What factors are contributing to buyer confidence ?
Interest rates continue to underpin purchasers buying power , and today interest rates are at record low levels , advertised from 2.25 per cent fixed for one year with the OCR remaining at 0.25 per cent since 16 March 2020 . The next Monetary Policy Review Announcement is set for 6 October 2021 .
• Importantly , the consensus among economists is that they will remain at these low levels for the foreseeable future .
• 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 .
• Banks and lenders remain very supportive of lending for residential property . The chart on page 21 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 .
• Record levels of Government stimulus are part of the supporting reason behind a high proportion of buyer sentiment .
• General confidence in a well-performing economy , with the exception of some sectors such as tourism .
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
Mar Apr May Jun Jul Aug Sep Oct
2019 2020 2021 Source : Ray White Online Analytics