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NZ’s rising unemployment will sap housing demand, ANZ says

New Zealand’s unemployment rate, set to rise this year, will likely sap demand for housing, offsetting the benefits of falling mortgage rates, according to ANZ bank’s Property Focus report.

Monday, January 26th 2009, 12:00AM

by The Landlord

“As far as the property market goes, all eyes will be on the job market, with anecdotes and evidence pointing to a rapid rise in the unemployment rate,” economists at the bank said in their monthly report.
    

The bank’s property gauges for January indicate a base may be forming in the property market, with housing, while still ‘expensive,’ now the most affordable in two years. The median house price fell 4.8% to NZ$337,500 in December from a year earlier and prices will probably fall further in 2009, according to the report.
    

“The Reserve Bank is providing support by cutting interest rates aggressively,” ANZ economists said. “But such action needs to be read in conjunction with the economic climate and a world-wide recession.”
    

Fixed-term mortgages have now ‘caught up’ to variable rates, with terms of 6 months to 5 years now close to 7%. As the central bank cuts the official cash rate further, short-term rates are likely to fall further than longer term rates, creating a positive yield curve for the first time in almost a decade, ANZ Bank said.     

“At some stage, borrowers may wish to consider taking a step up into a more expensive longer-term fixed rate if they would like longer-term certainty,” the bank said. Still, “by remaining floating, or fixing for just six months, you will have the benefit of being able to review the situation later in the year.”
    

New Zealand’s unemployment rate will probably jump this year in the face of a faltering economy and the global financial crisis, Prime Minister John Key said this month.
    

The jobless rate could climb to 7% later this year from 4.2% currently, and reach 7.5% in 2010, Key said after a briefing from the Treasury.

« OCR reduced to 5%OCR reduced to 3.5% »

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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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