That Home Loan Hub
Welcome to That Home Loan Hub, your ultimate guide to mastering the world of home loans and property. I'm Zebunisso Alimova, here to simplify the complexities of real estate and provide you with expert insights and the latest trends.
Whether you're a first-time homebuyer, an experienced investor, or simply curious about the property market, this podcast is for you. Join me each week as we unlock the secrets to property success and help you make informed decisions. Let's dive into the world of property together!
That Home Loan Hub
New Zealand's Real Estate Reality: Prices Drop Despite Lower Interest Rates
The housing market continues to present challenges across New Zealand despite conditions that should theoretically stimulate growth. Median house prices have dropped 0.5% year-on-year to $761,000, even as interest rates have fallen below 5% for the first time since 2022. This unexpected scenario raises important questions about consumer confidence and broader economic health.
For first home buyers, this market presents a fascinating dichotomy. While conditions appear favorable with increased housing stock and potentially more affordable prices, many prospective buyers remain hesitant, waiting to see if further drops materialize. With spring now upon us, we anticipate even more properties coming to market, potentially creating excellent opportunities for those ready to make their move. The fundamental question becomes whether to act now or continue waiting – a decision that depends on individual circumstances and risk tolerance.
The broader economic landscape tells a compelling story about why housing hasn't rebounded despite lower interest rates. High unemployment, widespread business closures, and vacant commercial spaces indicate systemic challenges beyond just the property market. These local indicators, combined with global economic pressures, have created a perfect storm of cautious consumer behavior. Yet amid these challenges lies opportunity for well-positioned buyers.
Looking ahead, the upcoming OCR review on October 8th could signal further changes, and the appointment of the first woman to lead the Reserve Bank of New Zealand from December presents an intriguing new chapter. If you're contemplating entering the housing market, don't let uncertainty paralyze you – reach out for a conversation about how these market conditions might align with your goals. Sometimes the best opportunities emerge during periods of hesitation.
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Hello and welcome back to that Humble on the Hump. Excuse my voice. I am joined by Kunch and she will take the heavy load off this recording. Hi Kunch.
SPEAKER_00:I am Kiola everyone. Let's go. Okay, let's go. Well, I thought uh let's dive into the current housing market and just um have a chat about that uh and what the data has come through for our August period. What is the August period?
SPEAKER_01:Well is it doing good or is it not doing so good?
SPEAKER_00:Well the um housing market or landscape isn't as great as what obviously um sellers are wanting, so it's actually dropped um 0.5% um year on year. So that just that brings the medium house prices in New Zealand to 761,000 despite the official cash rate uh dropping.
SPEAKER_01:Wow, so even with the OCR dropping, it's still not helping to stimulate the economy.
SPEAKER_00:Yeah, yeah. So, you know, interest rates were what at the sevens, now they're dropped to below five. Yes, below this time since 2022. Yep, below five, you know, we're seeing um 4.75, and that's still not helping. So what's going on? What do you think's going on? Yeah, it's uh it's an interesting one, right?
SPEAKER_01:Because from one hand, the winners are our buyers, right? The first home buyers are definitely coming back to the market, they want to buy their first home. But it's interesting, some of them are still sitting and waiting, going, Oh, maybe it's gonna go down even further. Maybe I shouldn't buy yet. Yeah, and but I think it's a larger scale, right? The unemployment rate is high, the lots of businesses are shutting down. I mean, between you and I, how many cafes in Wellington we know that shut down. Yeah, and locally and all the businesses around us, you know, even our street where our offices, so many places for lease.
SPEAKER_00:Yep, so many unoccupied offices around.
SPEAKER_01:Yeah, and um, and that's the sign the economy is not doing that great. And on larger scale, we usually are affected by the global economy as well. So that's America, Australia, you know, whatever is going on over there is gonna have an effect on us as well. So the confidence, the consumer confidence is just not there. No, and I think larger levers will have to be pulled to get people spending again. Yeah, yeah. And and this is what we're hoping for, right? The OCR for the next one is getting reviewed on the 8th of October.
SPEAKER_00:Yes, it is getting reviewed on the 8th. So we'll do another episode on our predictions on that one, I think. But just circle circling back on that, because obviously the majority of our work is helping um a lot of first home buyers. My favorite thing to do. I love my job doing that. Um, although, you know, the sale volumes have come down, um, there are a lot of um stock on the market at the moment, meaning that our first home buyers have a lot more choices in a house. Although some have not been able to find some, there's still more stock coming in, and historically we always see um spring and summer brings on more stock as well for us. So it'll be interesting to see what the report is for the next quarter.
SPEAKER_01:Well, we're in spring now, right? Yeah, we are actually gone. Where's the year gone? Honestly, when I look back, I'm like, how is it's almost Christmas? What?
SPEAKER_00:I know, yeah. So it'll be interesting and also really exciting as well for the um those first home buyers. So I guess the message um to get out to those that are sitting on the fence or not sure, you know, where to start, what to do, there is stock coming on, um, and I think they'll be at a really affordable prices. You may actually be able to pick up some gems and some bargains.
SPEAKER_01:Yeah. And the thing is, like, there are sellers that just can't move on the price and they're sitting, right? Yeah. Like holding on to that property. Yes. We know a few. We know a few.
SPEAKER_00:One might be me.
SPEAKER_01:But um majority of sellers, they are usually selling to buy something, right? And if you're buying in the same market, it doesn't matter. Yeah, like they're buying to uh get a bigger house, for instance, or to downsize. Yeah. So if they're buying in the same market, it doesn't matter. But it's it's only the sellers that are affected in terms of their lending and they just can't go down, yeah. You usually would know they would hold hang on to the property a bit longer. But um, good things are coming. So um stay positive, people, it's gonna get better. Yeah, right?
SPEAKER_00:Right? Yes, right, yes, stay positive, it's gonna get better. It's gonna get better. But yes, the message, I guess, is those again going back. If you are sitting on the fence and you're not too sure, reach out. Reach out to us, come have a chat, have a coffee.
SPEAKER_01:We'll be able to help you out. I love it. Awesome. Thank you guys so much, and tune in to our next episode. We're gonna talk about OCR predictions. Um, this is our second to last OCR review this year. Um, so it's gonna be a big one. And I believe a new uh person has been appointed to run Reserve Bank of New Zealand. So might be new changes coming, but she's not starting until 1st of December. So she's gonna miss out on the two OCR. I wonder if that's why they're bringing her in after. But it's um it's really good to see a woman at the helm and um let's see what that brings. Um, thank you so much and see you next time. Thanks all.
