Advisers optimistic about alert level one
Mortgage advisers are cautiously optimistic about the move to alert level one, as businesses return to normality across the country.
Tuesday, June 9th 2020, 8:02AM
Early this morning the nation entered alert level one, effectively meaning life returns to normal, with the exception of closed borders.
Mortgage advisers, many of whom have been back in the office since the move to level two, say the earlier-than expected move to level one will be good for business.
Q Group's Geoff Bawden is "cautiously optimistic", and hopes activity will return to "business as normal". He says adviser businesses will have "a few more efficiencies built in to our way of doing things".
Bawden warns there could be a slowdown over the next two months.
"Obviously everyone is starting from a low base because very little happened during lock down," Bawden adds. "That means it will take time for advisers cashflow to kick in. [It will be] probably another 6 to 8 weeks for most advisers to get upfront rolling."
Craig Pope, of Pope & Co Mortgages, doesn't expect much of a difference with the move to level one: "We have already been extremely busy since alert level three," he said.
Pope said the biggest challenge would be managing client expectations, with banks tightening credit conditions and servicing tests.
"Expectations are a little higher than reality on a few fronts," he said. "[Clients] are underestimating how long things are taking, the extra paperwork required around income and job security, and banks are taking a cautious approach regardless of recent LVR restrictions easing."
There are hopes that New Zealand has avoided a worst case scenario with Covid-19. Despite the lengthy lockdown, recent data indicates economic activity was stronger than expected under level two.
Kelvin Davidson, senior property economist at CoreLogic, doesn't expect the property market to change much between levels two and one.
"Activity has been functioning pretty much normally in level two, (open home, auctions etc), so think level one won’t change too much in the short-term.
"It's great to get to level one though, in the sense that it might just help shorten the recession a little bit, or make it shallower, which is good for property."
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