Market Update. Keeping you up-to-date with market changes.

We have been closely monitoring the impact of COVID-19 on the New Zealand property and mortgage market again, where things are moving fast.

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News for homeowners and mortgage holders.

Keeping you up-to-date with the latest announcements from banks and the recent sales activity forecasts.

What to expect in the mortgage market moving forward

OCR announcement
Last week’s OCR announcement was not unexpected, holding at 0.25% for now, but with stronger indications that we’ll probably be heading into negative territory early next year as well as funding for mortgage lending from the Reserve Bank to cover the drop in saving deposits, which are a major source of funding for lenders. Remember, negative OCR doesn’t mean banks will be paying us to buy our retirement homes on Waiheke Island, because there’s still retail margins to factor in, but we might see sub-2% rates before this year is over.

ASB forecast
ASB has revised its forecast for the official cash rate following the second lockdown in Auckland. The lender now believes the OCR will drop to -0.5% next year. The resurgence of Covid-19 in the community has prompted a rethink from the top four lenders. It says the OCR will fall to -0.5% in April next year. ANZ also changed its forecast today. The bank expects a 50 basis point cut to -0.25% in April 2021. Beyond that, further easing is possible, but there are constraints on the OCR going below -0.75%, ANZ economists have said.

REINZ sales activity
Last week REINZ announced strong sales activity in July, up 25% compared to last year, and hot on the heels of June’s 11% year on year growth. However, anyone watching their local markets closely may have noticed that this is resulting in a severe shortage of properties for sale currently. First home buyers have flooded into the market hoping to find listings and attracted by record low interest rates with hopes of banks easing up minimum deposit criteria following the removal of LVRs by the Reserve Bank. That pass-through into deposit sizes has yet to happen, and banks are imposing some very tight servicing rules. Thus, many potential home buyers are very frustrated.

Low mortgage rates
Another factor supporting the housing market is low mortgage rates, removing pressure on current owners to sell. Listings stocks remain low. Plus, there has been a surge in net immigration into New Zealand over the year to May (clearly largely before the borders were closed in March) amounting to 81,000 people. In fact, adding the high net 68,000 people who entered our country over calendar 2019 to the extra 38,000 net who have entered since, the gain since January 2019 is just over 100,000, and not the 60,000 or so we were expecting.

This adds to housing demand and is likely to be one factor pushing house prices on average higher come 2021. Before then we have the ending of the wage subsidy extended scheme to get through. But it is likely that the extra people to be laid off are well aware of that potentiality and will have already adjusted their spending patterns and levels.

Home loan repayment deferrals
The Reserve Bank announced yesterday that eligible Kiwis will be able to access home loan repayment deferrals (and extend existing deferrals) up to 31 March 2021. If you are already on a loan repayment deferral, and are seeking an extension, that will mean a total deferred period of over 6 months. This does not mean you are guaranteed to receive a deferral extension beyond 6 months in total, but your request will be reviewed once the new policies are developed.

ANZ rate drop
Well done ANZ! Test servicing rate dropped from 6.65% to a far more realistic 5.8%. What does this mean? Basically, it would allow someone to borrow 10% more than their previous maximum. Example: $500k now $550k. In short, banks do not use the current 1 year rate of 2.55% to assess your borrowing power. They use between 5.8% and 7%. The reason they do this is to protect the borrower and themselves from future rate increases. They don’t want someone’s max lend to be based on a 2.55% interest rate and then rates go up to 3.55% and they then find themselves in hardship. The interest rate outlook appears to be flat and low for the foreseeable future according to economists, therefore updating the test rate was overdue and necessary. Many consumers will jump on the banks borrowing power calculators online which are always completely unrealistic and often lead to disappointment.

Pre-approval letters
Your true borrowing power can only be found in a pre-approval letter, which can be done by engaging with a mortgage adviser and completing an application. Then you know exactly where you stand. With banks currently being up to 2 weeks behind in processing applications, my advice is to get your application underway well before you begin property shopping to avoid unnecessary time pressures.


Vehicle and personal finance solution.

I’d like to introduce you to Select Asset Finance, our new solution for vehicle and personal loans, both for new finance and refinance.

Personal loans made easy

If you’re thinking about applying for a new loan or would like to explore options to refinance an existing vehicle or personal loan, I welcome you to get contact. For cars, boats, equipment and more, we’re here to help with competitive interest rates and expertise to assess the appropriate loan for your needs.

Key Points

  1. Highly competitive interest rates – We negotiate on your behalf.
  2. Fast approval – You’ll have an answer in just two hours.
  3. Extensive panel – Leading New Zealand lenders including UDC, Marac, Heartland and more.
  4. Expert team – Our experienced, friendly team are here to help.
  5. Flexible terms – Weekly, fortnightly or monthly repayments.

Loan Types

  1. Loans for different needs
  2. Vehicle loans
  3. Home renovation loans
  4. Wedding loans
  5. Holiday & travel loans
  6. Marine Loans
  7. Debt consolidation

Feel free to get in touch or you can apply directly through the super easy portal on the SuperCity website at your convenience.
SuperCity Vehicle Loan Portal


Tower Insurance special offer.

It could be a good time to review your fire and general insurances. We have a long standing relationship with Tower and they are currently offering $50 off each new car, home, or contents policy from the first years premium. So, take out 3 eligible policies and that is a $150 saving.

This is valid until the end of September. For quotes, please email us and we will arrange for our dedicated assistant to call you.

A snapshot of your world and lifetime cashflow modelling.

Recently, with the current environment, people are reaching out and telling us they’re worried about a number of things.

Giving you peace of mind

Our clients have said they are:

      1. Stressed about their financial circumstances.
      2. Concerned around potential changes in their personal health.
      3. Uncertain if their existing insurance fits their current needs, or anxious because they’re financially exposed with no cover.

      Don’t suppose any of these are an issue for you? Part of looking after you is to make sure your lending commitments can be supported in the event your circumstances change. Jaime and the SuperCity Insurance team have been busy helping clients with financial modelling.

    • Clients are often telling us they have more clarity on where they’re at right now because the team can show them a visual snapshot of their world over Zoom. The team model out scenarios that might be a concern for clients, such as ‘what if my income drops?’, and explore ways to help reduce debt and work on building and protecting their lifetime cashflows. Check out their Financial Modelling Demo. If you would like some help, please contact Jaime directly.

Jaime James
Managing Director, Principle Insurance Adviser
M 021 527 069
Level 26, PwC Tower, 188 Quay Street, Auckland 1010

As a valued client of SuperCity you have access to the following free services

  • Advice & recommendationsWe are available to provide expert independent advice and recommendations for your home loan ongoing, all you need to do is email, txt or call either of us.
  • Fixed rate home loan reviewsWe’ll help you get the best interest rate in the market for your home loan and contact you well before the bank does.
  • Refinance optionsWe’ll help you refinance if you’re not happy with your current bank.
  • Home loan top upsWe’ll help you top up your home loan if you need extra funds, for example, to pay for renovations on your home.
  • Car loansWe’ll help you get that dream car or to refinance your existing car loan.
  • Need help with your life and living insurances?We can connect you with our award winning Insurance Adviser, Jaime James to ensure you’re protected for the things that matter most, your health, family and the most important asset, your income.
  • Personal insurancesIncluding home, contents, boats and cars.
  • Need help with legal?We can connect you with a Solicitor to assist with the settlement of your home loan, setting up a Trust or for estate planning.
  • Regular communicationWe’ll contact you regularly to ensure all is going well with your home loan and to keep you updated with any helpful tips and tricks.

We look forward to helping you achieve your financial goals and plans.


Up-to-date market news.

See our archives to catch up on previous issues.
Interest rates August 2021
Interest rate outlook can change so quickly

RBNZ intends to lift interest rates over the coming years, but held fire this time given the level of uncertainty about this new outbreak. 

read more
Market changes APRIL 2021
NZ Government housing announcement

The announcement we did not expect: the removal of the ability of all new investor purchasers to deduct interest costs moving forward.

read more
Market changes DEC 2020
How fast might prices rise on average in the coming year?

Although November will still likely show a sharp price increase, for December onward monthly price gains below the 3.5% of October and 2.6% of September are likely.

read more

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