More People Getting Mortgages, But Slowly
The latest numbers on mortgages show that in January, there were $3.4 billion in new loans. Compared to last year, this is $600 million more. It’s the sixth month in a row that we’ve seen an increase. However, it’s important to note that the figures are still lower than January 2021 when there was $6.4 billion in lending. “Why the Reserve Bank might not cut interest rates until”
This suggests that the housing market is recovering, but not very fast. First-time homebuyers are taking advantage of rules that make it easier for them to buy homes, making up 80% of low-deposit owner-occupiers. New builds, which are exempt from certain rules, are a popular choice for these buyers.
No Changes in Interest Rates for Now
The Reserve Bank has decided to keep the Official Cash Rate (OCR) at 5.5%. This decision doesn’t signal a big shift in their plans, but they’re staying cautious. They are not willing to tolerate unexpected increases in inflation over the next few months.
There’s still a chance that interest rates could go up in the future, and any cuts might not happen until around the middle of next year. So, the message for people looking at mortgages is that rates are likely to stay higher for a while, and significant drops may not happen for about a year.
Property Values Showing Small Changes
Given the current situation with interest rates being a challenge, it’s not surprising that lending, house sales, and property values are a bit up and down. The CoreLogic House Price Index for February showed a modest increase of 0.3%, following a similar soft figure in January (0.4%).
In the last two months of the previous year, the growth was slightly higher at 0.7% and 1.0%. This inconsistent data supports the idea that 2024 might not bring a strong improvement in the property market.
Mixed Bag in Recent Economic News
Economic data from last week had its ups and downs. More jobs were filled in January (good), sentiment measures for February were neither positive nor negative (neutral), and new dwelling approvals dropped sharply again in January (bad). The implications for the housing market are likely neutral for now.
However, if the decline in dwelling approvals continues, especially with a growing population, we might start facing housing shortages.
Hopeful Plans for Housing Supply “Why the Reserve Bank might not cut interest rates until”
Housing Minister Chris Bishop shared more plans last week about boosting housing supply. This includes the requirement for councils to set aside enough land for 30 years of building growth. The government also plans to focus on infrastructure, the rental market, construction costs, and the Resource Management Act (RMA).
Councils will have the option to opt out of certain planning rules if they can provide enough land elsewhere for the right kind of housing. While these plans sound promising, past attempts by different governments to solve this issue haven’t been very successful. So, we’ll have to wait and see if these plans bring better results.
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Hi guys, I’m Mosharraf Hossain. I have been working in journalism for five years. And I write about different Trending news, sports news , Political news etc. Happening daily around The world And I was a Reporter for The Daily Star newspaper for two long years. And I mainly deal with USA Canada Italy Australia UK news
