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Mortgages

Mortgage Rates Daily Commentary
Thursday 28 May 2020  Add your comment
Reserve Bank believes rates will fall; BNZ cuts; Simplicity 2.5% rate

Reserve Bank governor Adrian Orr believes banks have "room to go" to push home loan rates below current record lows: [READ ON]

BNZ has made further home loan rate cuts, effective this morning. Its 18 month loan drops to 2.79% for investors and owner-occupiers, while its two-year falls to 2.69%, joint-cheapest in the market.

Even KiwiSaver provider Simplicity is getting in on the rate cut action. It has cut its floating rate home loan to just 2.5%.

 

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Quieter times ahead for housing market - ASB

New Zealand’s housing market has been on the boil this year, but ASB predicts it is set to cool to a simmer in the year to come.

Monday, August 8th 2016, 1:58PM

by Miriam Bell

ASB has just released its latest quarterly economic forecast and it suggests that quieter times are ahead for the country’s currently rampant housing market.

The bank’s chief economist, Nick Tuffley, said the Reserve Bank’s new lending restrictions should slow down the housing market up and down the country over the rest of this year.

“The sort of price growth a number of regions have experienced over the last couple of years will not be sustained. Expect 2017 to be much quieter on the housing front.”

But, in areas where supply is struggling to catch demand, the impact of the new LVRs is likely to wear off, he said.

“Auckland in particular is unlikely to see building consent issuance match population growth requirements for a couple of years.

“House prices in Auckland may bounce slightly in the first half of 2017, after a likely soft end to 2016.”

However, the new LVRs should give the Reserve Bank more room to move in its struggle with low inflation.

ASB’s report states that, despite solid growth and a respectable growth outlook, New Zealand’s inflation outlook remains weak.

“We don’t see inflation exceeding 1% until the second half of 2017, at which point inflation will have been below 1% for nearly three years,” Tuffley said.

This year has been shaped by the Reserve Bank’s ongoing struggle to manage the conflicting risks of the rampant housing market and the impact of a higher exchange rate on the inflation outlook, he said.

“The additional investor lending restrictions the Reserve Bank is introducing give the Reserve Bank a little more room to address low inflation with a reduced risk of inflaming the housing market further.

“We expect the Reserve Bank to drop the OCR to 1.75% by November and, if the NZD continues to hold up, an even lower OCR is possible.”

In a broader sense, New Zealand economic growth is forecast to improve, boosted by migration, construction and non-dairy exports. 

Tuffley said that migration inflows remain strong and will support growth, while the strength of the housing market and construction is rippling out to many regions. 

“At the same time, exports are faring well generally, with one recent standout being the kiwifruit sector’s record exports.”

New Zealand has managed to weather the volatile global economy well this year.

It also appears to be a good risk for overseas investors, according to the report.

This is because of its non-zero interest rates, reasonable growth prospects, and a degree of political stability that can no longer be taken for granted in many developed countries.

 

Tags: ASB interest rates OCR forecasts

« Bank risk real LVR targetMore cuts on the horizon »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.55 3.89 3.99
AIA Special - 3.05 3.39 3.69
ANZ 4.44 3.29 3.45 3.85
ANZ Special - 2.79 2.95 3.35
ASB Bank 4.45 ▼3.35 ▼3.19 ▼3.85
ASB Bank Special - ▼2.85 ▼2.69 ▼3.35
Bluestone 4.44 4.44 4.29 4.34
BNZ - Classic - ▼2.79 ▼2.69 ▼2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼3.39 ▼3.29 ▼3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 2.80 3.15 3.19
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.80 2.89 3.50
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC ▼4.40 ▼2.95 ▼2.95 ▲3.69
Kainga Ora 4.43 ▼3.29 ▼3.39 ▼3.85
Kiwibank 4.40 3.74 4.14 4.40
Kiwibank - Capped - - - -
Kiwibank - Offset 4.40 - - -
Kiwibank Special - ▼2.65 ▼2.79 ▼3.25
Liberty 5.69 - - -
Lender Flt 1yr 2yr 3yr
Napier Building Society - - - -
Nelson Building Society 4.95 3.75 3.99 -
Pepper Essential 5.18 - 4.98 4.98
Resimac 3.49 3.45 3.39 3.69
RESIMAC Special - - - -
SBS Bank 4.54 4.85 5.05 5.49
SBS Bank Special - 2.99 3.05 3.69
The Co-operative Bank - Owner Occ 4.40 ▼2.79 ▼2.95 ▼3.39
The Co-operative Bank - Standard 4.40 ▼3.29 ▼3.45 ▼3.89
TSB Bank 5.34 3.59 ▼3.59 4.19
TSB Special 4.54 2.79 ▼2.79 3.39
Lender Flt 1yr 2yr 3yr
Wairarapa Building Society 4.99 3.95 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.79 ▼2.69 ▼2.79
Median 4.55 3.32 3.39 3.69

Last updated: 28 May 2020 10:38am

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