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Rise in households struggling with mortgage repayments; RBNZ: house prices still near top of sustainable levels

Mortgage arrears continue to rise but are still low by historical levels. [READ ON]

The Reserve Bank says house prices remain near the top of its estimate of sustainable levels and remain “a stretch” for many would-be buyers. [See here]

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Housing market easing at "fairly fast clip"

While the level of housing activity remains high, the housing market is easing "at a fairly hasty clip," Bank of New Zealand chief economist Tony Alexander says.

Monday, June 28th 2004, 7:27AM

by Jenny Ruth

Although the turnover figures for May showing 9,416 houses sold were the second highest for the month of May on record, compared with the number of sales in May last year they were down 15.6%," he says.

"It’s the direction of movement that’s really important here," Alexander says. "This is the worst annual rate of decline since October 2000 and probably gives a better picture of annual changes than the data for recent months which had their annual rates of change biased upward by SARS and so on hitting sales early last year."

As well, the average number of days it takes to sell a house has risen from 27 in May last year to 30 in May this year.

"This is the highest increase from a year earlier since July 2001 and merely confirms the easing nature of the housing market."

While the sales figures still show the national median house price is rising, Alexander argues the monthly figures should be treated with extreme caution in such a small economy and that a three month average provides a more accurate picture, particularly when looking at regional trends.

Immigration, a key driver of the housing market, is getting worse than forecast. Forecasts have been for immigration to fall from 35,000 last year to 20,000 this year, however Alexander says "we are headed for something much lower."

He estimates net migration will show a gain closer to 9,000 than 20,000 this year and that by the middle of 2005 it is highly probable it will have fallen to zero.

Alexander hasn’t made any forecasts further out, but notes that immigration flows have turned fast in the past. For example, while there was a net gain of 35,000 people in the year ended July 2002, in the previous 12 months there was a net outflow of 6,760 people.

« Mortgage brokers may restart selling life insuranceWeakening trend but housing consents still high »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 7.65 5.99 5.75 5.69
Co-operative Bank - Standard 7.65 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 ▼5.65 ▼5.55 ▼5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.00 6.50 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 ▼6.39 ▼6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - ▼6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 ▼5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.69 6.79 6.49 6.49
TSB Special 7.89 5.99 5.69 5.69
Unity ▼7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.50 ▼6.19 ▼5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.99 6.17 5.79 5.69

Last updated: 30 October 2024 9:36am

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