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Last Article Uploaded: Saturday, October 23rd, 7:07PM

Mortgages

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Meteoric market to continue until mid-year

Kiwibank economists believe that house price inflation will rise by 25% in the year to June, before easing to 14.5% in the year to December 2021.

Tuesday, March 16th 2021, 3:02PM

The state-backed bank's team of forecasters, including chief economist Jarrod Kerr, believe there's plenty of room left to run in this unprecedented market surge. 

In their latest report, the bank's team "dramatically revised" their outlook for the market. They had previously tipped a rise of 12%-15%. 

The revised forecasts were made off the back of the recent REINZ data, which showed once again a significant level of activity in the market. 

According to the REINZ data, house price growth reached 20% in February.

"You have to go back to the apex of the last nationwide property boom in 2004 for a similar rate," the Kiwibank team said. 

The bank added the jump in sales could be explained by a rush to beat LVR restrictions. 

The restrictions "should take some heat out of the market", however the rules may not quash investor activity as much as planned.

Rising equity levels in investor portfolios would give landlords enough room to leverage from existing properties and continue to buy, the bank said.

Kiwibank's team added: "The recent sharp surge in house prices has helped to push up investors’ equity on existing portfolios. Equity that can be used as a deposit for additional borrowing.

"Other measures are needed to tame the housing market, and we await to see if the Government gives the RBNZ go-ahead to use debt-to-income restrictions on investor related mortgage lending." 

Tags: house prices housing market Kiwibank Lending LVR property investment

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 ▲3.25 ▲3.75 ▲3.99
ANZ 4.59 ▲3.84 ▲4.30 ▲4.54
ANZ Blueprint to Build 1.68 - - -
ANZ Special - ▲3.24 ▲3.70 ▲3.94
ASB Back My Build 2.04 - - -
ASB Bank 4.45 ▲3.25 ▲3.75 ▲3.99
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - ▲3.24 ▲3.79 ▲3.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.70 ▲3.84 ▲4.39 ▲4.59
BNZ - TotalMoney 4.70 - - -
CFML Loans 5.15 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.25 1.85 2.35 2.65
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.45 2.85 3.15
Kainga Ora 4.43 2.88 3.28 3.59
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank ▲4.00 3.80 ▲4.15 ▲4.50
Kiwibank - Offset ▲4.00 - - -
Kiwibank Special 3.75 2.95 ▲3.30 ▲3.65
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 3.05 3.45 3.75
SBS Bank Special - 2.55 2.95 3.25
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - ▲2.79 - -
The Co-operative Bank - Owner Occ 4.55 ▲2.99 ▲3.60 ▲3.89
The Co-operative Bank - Standard 4.55 ▼3.49 ▲4.10 ▲4.39
TSB Bank 5.34 ▲3.75 ▲4.20 ▲4.44
TSB Special 4.54 ▲2.94 ▲3.40 ▲3.64
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.84 ▲3.79 ▲4.39 ▲4.59
Westpac - Offset 4.84 - - -
Westpac Special - ▲3.19 ▲3.79 ▲3.99
Median 4.57 3.21 3.60 3.89

Last updated: 22 October 2021 8:59am

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