With 2020 now underway, we haven’t seen many changes with most still on holiday mode. Here’s what we’ve noticed in the past week.
Mortgage rates
No changes to interest rates. Most banks are now sitting at 3.55% for two years, with the top banks battling out the one-year rate. Some are offering 3.39% while others are sticking with 3.45%. It’s hardly a significant difference with most banks happy to match the one-year 3.39% when negotiating.
Official Cash Rate
Nothing new to report from the banks and economists. We’re forecasting the next cut to be in May with a 0.25% drop, and we expect that to be the only cut this year. Reports are showing that business confidence is increasing, although not by much it is more than expected. It looks like the 0.5% cut last year is starting to take effect.
Housing market
Primarily focusing on the Auckland market here. Barfoot and Thompson ended 2019 with 779 properties sold in December. This is significantly higher than December 2018 where they recorded 504 sales. However, the overall sales for the year 2019 were lower than 2018 by 4.4%. It seems that the average price also dropped by 1.1% from 2018. However, we are starting to see more and more activity from first home buyers in the past few weeks. With average prices dropping slightly, this may be an ideal time for first home buyers to enter the market.