BNZ chief economist Tony Alexander recently explained why it’s unlikely that NZ house prices will follow Australia down. Among the factors that make the New Zealand market different – and ultimately less volatile – are a worsening housing shortage, a historically lower level of foreign house buying, no stamp duties and a smaller proportion of interest-only lending.
“Forecasts of a collapse in New Zealand house prices have been made repeatedly since the 1980s and were most prevalent during and immediately after the GFC,” Alexander said.
“None of these forecasts have proved correct.”
So, what’s next for New Zealand borrowers? According to Alexander, NZ banks may soon follow their Australian counterparts in lowering their serviceability tests – opening up the market to more buyers. In the meantime, borrowers who want to fix their mortgage now (and make the most of lowering interest rate in the coming months) can benefit from Mortgage Link’s expert advice. Our team is at Kiwis’ service nationwide.