CANTERBURY MARKET

The past three months have seen a paradigm shift in the real estate market in Canterbury. It was clear in the early parts of April and going into May we were seeing traditional winter seasonal markets with activity in both listings and sales slowing – which is normal around these months. The true shift occurred in June when both sales and listings picked up to levels not seen since the early post COVID months.

What drives such a rapid change in real estate from month to month? In this instance from May to June appears that some of the activity was based on a shortage of property for sale which for an extended period from around February this year through to the end of May we have seen declines in listing numbers, essentially meaning there was little choice for purchasers. So, in June when we saw more properties listed there was more choice for buyer causing a jump in buyer activity pushing the sales figures for June up in comparison to previous months.

Some of the change in activity can be attributed to a settling down of key indicators in the market such as the OCR remaining unchanged for the first time since August 2021 which is a positive for those looking to borrow. In short, it is clear with certainty around interest rates peaking over this quarter or very much close to peaking has given everyone the certainty they need to make a real estate decision. Add to this strong positive migration over the past year for the first time in three years, the picture becomes much clearer as to why we saw such a shift in activity in the last three months.

Recent Statistics New Zealand figures released during the quarter put the Christchurch population growth to be around 15% by 2048 with the Selwyn district projected growth to be at 47% over the same period. This suggests the demand for housing both new and existing will continue for the foreseeable future.

Looking forward – July has been active with buyers continuing to act. Listing numbers have again slowed slightly, which is expected as we come into the traditionally busy spring months. Auction results are also a strong indicator of what is happening in the market and over the past 8 weeks we have seen almost 100% of properties auctioned selling under the hammer or with a few weeks of auction days – something that hasn’t happened for the past year or so.

In my opinion the market is good and if you do want to make a real estate decision please get in touch with one of the Four Seasons team – we are more than happy to help.

James Twiss Managing Director

As some New Zealand mortgage holders prepare to re-fix their mortgage in the next 6 months, many are likely to see their interest rates double from 3 per cent or less to more than 6 per cent. Before locking in new interest rates, it’s important for borrowers to know these 5 things.

1. Know when your existing fixed rate expires

Before your fixed rate term comes to an end, you’ll need to decide whether to refix your home loan at a new interest rate or change to a floating interest rate. If you choose not to re-fix or if you do nothing, your home loan will automatically switch to a floating interest rate the day after your fixed term ends. To plan your next steps, contact your mortgage adviser or lender at least 6 to 8 weeks before your fixed rate is due to expire.

2. Know what your plans and goals are

When deciding how long to refix, consider your plans and goals. Think about any changes to your current situation that could affect your home loan. For example, are you planning to sell your home, do you have a new baby on the way, are you changing your job or lifestyle? Each of these situations requires more flexibility so a shorter fixed term may be preferred.

3. Know what the different rate options are

Understand the difference between fixed interest rates and floating interest rates, and the pros and cons of each.

Floating interest rates:

• More flexibility allowing extra repayments.

• No break fee so you can fix part of your mortgage at any time.

• Repayments fluctuate with interest rate changes making it harder to budget.

• Rates tend to be higher than fixed interest rates. Fixed interest rates:

• More certainty with set repayments which can simplify budgeting and financial planning.

• Locking in a fixed interest rate ahead of an increase could save you money.

• No benefit if interest rates drop.

Information sourced from REINZ as at 17th July 2023

• Does not allow for any extra repayments or early repayments.

4. Know how your mortgage is structured

Splitting your home loan and spreading your risk over a few loan terms could help minimise the impact of higher mortgage repayments as interest rates continue to rise. At the same time, it’s important not to lock yourself into too long a loan term and potentially miss out on an interest rate downturn.

Before refixing your home loan, talk to your mortgage adviser about your current situation and what’s on the horizon for you both short-term and long-term, so you can decide on the right home loan structure for the coming two to three years.

5. Know what other lenders are offering

It pays to check what interest rates and incentives other lenders are offering before you refix with your current lender, and to compare your fixed interest rates to see how they stack up. Talk to your mortgage adviser about opportunities to renegotiate your fixed interest rates, or find out if refinancing is right for you.

As a large number of Kiwi homeowners will be rolling off fixed interest rates this year, rising interest rates and higher repayments will understandably be a source of concern. Keeping track of changes in fixed interest rates can be hard, and not all deals are advertised. That’s why it’s important to work with a mortgage adviser – such as those at Mortgage Express – who can help you compare lenders and interest rates to find the right financial solution.

Anthony Woolcott Mortgage Adviser

027 483 1131 anothony@mx.co.nz mortgage-express.co.nz