About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Monday, September 16th, 9:30PM
rss
Latest Headlines

Market rebound coming - Westpac

The cancellation of a capital gains tax combined with lower mortgage rates will be game changing for the housing market, believes Westpac’s chief economist.

Thursday, June 13th 2019, 10:28AM

by The Landlord

While the market may have cooled considerably in recent times, with Auckland prices falling and regional price growth slowing, the latest Westpac Home Truths report states that’s set to change.

The bank’s chief economist, Dominick Stephens, says that they now expect nationwide house price inflation to lift from 2% at present to 7% over 2020.

There are several clear reasons for that: one is the Government’s ditching of all capital gains tax proposals and the other is the sharp plunge in mortgage rates currently being seen.

They mean the the trajectory of the market is going to change accordingly – and immediately, Stephens says.

“The threat of CGT was previously hanging like a Sword of Damocles over the market, impacting sentiment and prices here and now.

“Now that the threat has gone, there will be an immediate improvement in market sentiment and a ‘relief rally’ in prices.”

Likewise, the post-OCR cut drop in interest rates reduces the cost of asset ownership and, in New Zealand, this reliably leads to higher house prices, he says.

The bank expects these two factors to outweigh the negative market influences of the extended bright line test, the new rules around the ringfencing of rental losses and the foreign buyers ban.

Along with improved house price growth nationwide, Auckland prices should flatline this year before rising by 5% next year.

At the same time, the premium gap between prices in Auckland and elsewhere in New Zealand is expected to narrow to about 30% above the 1992 level, as compared to the 80% it reached at the height of the boom.

However, Stephens says that while house prices should rebound in 2020, that rebound is set to be temporary.

“We expect construction activity to remain very high for some time, while net migration drops. In time, this will cause dwelling shortages to gradually diminish.

“This will put downward pressure on rents and house prices (although other factors such as interest rates and tax policy will remain more influential for house prices).”

The expected alleviation of housing shortages, along with rising mortgage rates and tighter credit conditions, are the reasons they expect house prices to stagnate or fall later in the 2020s, he adds.

 

Tags: Auckland CGT foreign investment house prices housing market landlords Mortgage Rates mortgages OCR property investment Westpac

« Tale of two halvesPrices under pressure »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.15 4.09 4.49
ANZ Special - 3.65 3.59 3.99
ASB Bank 5.20 4.15 4.09 4.39
ASB Bank Special - 3.65 3.59 3.89
BNZ - Classic - 3.65 ▼3.54 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
Housing NZ Corp 5.19 ▼4.15 ▼4.09 ▼4.39
HSBC Premier 5.24 3.35 3.35 3.35
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.65 3.85 3.95 3.89
Kiwibank 5.80 4.30 4.34 4.74
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.55 3.59 3.99
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.69 4.79 -
Resimac 5.30 4.86 4.14 4.19
Lender Flt 1yr 2yr 3yr
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.69 3.69 3.99
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.65 3.59 3.99
The Co-operative Bank - Standard 5.15 4.15 4.09 4.49
TSB Bank 6.09 4.65 4.59 4.85
TSB Special 5.29 3.85 3.79 4.05
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.34 - - -
Westpac Special - 3.65 3.59 3.99
Median 5.35 4.15 4.09 4.19

Last updated: 16 September 2019 10:03am

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com