In New Zealand, the OCR could go as low as 0.75% by year-end – a significant drop from the beginning of 2019 when the OCR was at 1.75%. In the meantime, just a couple of weeks ago, the Reserve Bank of Australia cut its official cash rate by 0.25% to an all-time low of 0.75%.
According to a recent article by the Australian Financial Review, the construction industry is hoping that lower borrowing costs and easing credit criteria will boost demand by owner-occupiers for new housing. So far, the RBA rate cuts have at least helped stabilise home prices. As HIA economist Tom Devitt pointed out, this could be a sign that confidence in the property market has improved, but the volume of property transactions remain low. “We will need to see that improved confidence translates to greater numbers of active market participants in order to halt the contraction in residential building,” said Devitt.
In New Zealand, where another rate cut is expected to take place next month, these are certainly interesting times for the property and lending space:
At Mortgage Link, we are committed to helping Kiwis secure all the extra help they deserve – be it through KiwiSaver withdrawals or grants. Plus, our friendly advisers know the market inside and out and work hard – on behalf of the client – to negotiate competitive rates and conditions with the lenders, including banks and non-bank lenders. Get in touch with us or visit our website to find a Mortgage Link adviser in your area.