More New Zealanders could get on property ladder

Country: New Zealand

28 October 2008

A growing number of New Zealand nationals are expected to find getting onto their domestic property ladder a lot easier over the coming months as interest rates fall and borrowers enjoy savings of around £2,500 a year on mortgages.

Auckland loan specialists Cairns Lockie have calculated that people paying around NZ$32,000 (£11,300) a year at last year's high interest rates of 10% could be soon paying NZ$25,000 (£8,800) if rates fall to 7%.

The company reports that residential prices in New Zealand have fallen over the past six months, and discounts of up to 15% are now not uncommon, in turn further increasing affordability levels.

"The affordability of buying and owning a house is improving," Cairns Lockie said.

"This is particularly important to first-home buyers, because each 1% drop in rates means considerably more people can enter the market."

Most banks cut their interest rates last week, some to just below 8%, after the Reserve Bank reduced its official cash rate to 6.5%.

Real Estate Institute past president Murray Cleland said interest rates had been too high.

It was common sense that if they came down to about 7%, that would benefit first-home owners.

He said: “Prices have certainly eased off, but there is no panic at this stage.”
"Now is a good time for first-home buyers and property investors," he added.

Browse other New Zealand property news stories, read articles about investing and buying property in New Zealand or view our range of property in New Zealand.

See Also: New Zealand

<< Previous News item

Within New Zealand
With tag "New Zealand"

NextNews item >>

Within New Zealand
With tag "New Zealand"