Plus more insights from Kiwi mortgage advisers
In the latest survey conducted by mortgages.co.nz and Tony Alexander Mortgage Advisers, insights from 56 mortgage advisers have revealed notable shifts in the residential real estate market, particularly among first-home buyers.
The main themes identified from statistical and anecdotal responses included a slight easing of lending criteria for first-home buyers by banks, plus the anticipation of more buyers entering the market encouraging some people to expedite their property purchases rather than waiting.
The survey indicated a significant increase in interest from first-home buyers, with a net 38% of advisers reporting that they are seeing more first-home buyers seeking advice. This marks a notable rise from December’s figures and suggests that the dip observed in December was merely a pre-Christmas stepping back.
“Now, with people returning from holidays and evidence of markets rising and interest rates slowly falling with more declines expected, young buyers are showing renewed interest in making a property purchase,” Alexander (pictured above) said.
Regarding bank lending to first-home buyers, comments from advisers varied. Some noted limited low-deposit funds available, while others mentioned banks being more willing to negotiate deals, particularly for strong proposals. Inclusion of boarder income in high LVR loans is highlighted as beneficial, especially for individual purchasers.
In contrast to the trend for first-home buyers, the survey indicated a decline in investor interest, with a net 29% of respondents saying they were seeing more investors seeking advice, down from December’s figures but consistent with November’s numbers.
“Investors are still struggling to make the numbers work with high cost increases and high interest rates, and banks are showing little new enthusiasm for lending to investors as yet,” Alexander said. “But tax rule changes are being greeted positively and this may bring more interest forward as the year progresses. There is no evidence of a wave of new investors appearing as such.”
Concerning lenders’ willingness to advance finance, a net 36% of respondents reported a positive shift, consistent with trends observed since March last year. Although caution prevails, the direction of change is positive, albeit at a slow pace.
Regarding interest rate fixation preferences, almost 80% of brokers reported that borrowers preferred fixing their mortgage interest rate for one year or less. This preference aligns with the market trend of fixing rates for shorter durations amid expectations of falling interest rates.
The survey also shed light on refinancing inquiries, with a net 23% of brokers noting an increase in people seeking advice on refinancing their existing mortgages. This figure is relatively low compared to most months in 2023.
To read the article, click here. For a more comprehensive overview, the full mortgages.co.nz & Tony Alexander Mortgage Advisers Survey report can be downloaded here.
Recent insights from Tony Alexander can be accessed here and here.
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