As the holidays approach, getting everything done before Christmas is becoming more challenging. With bank processing times lengthening and the holiday break approaching, we recommend getting a head start on property plans for 2025.
The Reserve Bank reduced the Official Cash Rate (OCR) by 0.5% to 4.25%. Here’s what it means for you:
Lower Mortgage Payments: Floating rates have already started to drop, with fixed rate adjustments expected to follow soon.
Improved
Borrowing Power: With the reduction of servicing/test rates, it may be easier for buyers to qualify for lending or secure larger loan amounts.
Reassess Payments: If you extended your loan term to manage higher rates, now’s a good time to revisit your repayment plan. Keeping or slightly increasing your payments can help shorten your loan term and save on interest.
Get Ready: Short term fixed rates have dropped a little and perhaps will fall again in the early part of next year – Get in touch to ensure you’re ready to act.
The next OCR drop isn’t until 19th February 2025, it’s still a little far out but many economists are suggesting another 0.5% drop which will bring borrowers further relief.
For a more in-depth overview of the recent OCR announcement click HERE
In November, national property values fell by 0.4%, continuing the trend of gradual declines. The national median value now is $800,795, which 3.5% lower than a year ago (equivalent to a drop of around $29,100).
Here’s how some regions performed last month:
Auckland: Down 0.4%
Tauranga: Remained flat
Wellington: Down 1%
Christchurch: Up 0.1%
Dunedin: Up 0.4%
Invercargill: Down 0.5%
While the market remains 17.7% below post-COVID peaks, it’s still 16% higher than the pre-COVID figure from March 2020.
For November’s Full Property Insight click Here!
Pre-Approvals remain essential, so if you’re planning to buy or refinance in the New Year, get started now.
For those making offers, ensure your due diligence timelines account for current bank processing times.
Changes in the corridors of power in the US may see the implementation of policies that will be inflationary and we suggest that longer fixed rates will become a potential choice for borrowers as 2025 progresses.
The banks servicing rates are falling, and getting a lot closer to a point where debt-to-income ratio rules could become a greater consideration.
Falling mortgage rates and improving affordability are positive signs for the New Year ahead and do offer opportunities for sellers, buyers and those refinancing.
If you’d like to discuss how this affects you, or need help securing finance and navigating your property and financial journey?
Reach out to Ben if you have any questions or would like a zero obligations chat or review.
We are here to help you navigate the exciting world of finance and property with confidence.
Book directly on calendly, or click below to get started!
