We’re two weeks into New Zealand’s level four lockdown and we haven't seen any further movement on mortgage rates. It seems that 3.05% and 3.09% for one-year fixed is now the norm. We believe it’s unlikely that rates will move any further up or down during the lockdown period, as the housing market for all transactions is also currently locked down. At the moment banks are focusing only on mortgage deferral assessments and emergency loan top-ups.
The current market outlook is hard to predict as many are suggesting that a four-week national lockdown is merely a start, and that we should be prepared for a further two to four weeks of level four after this current term.
Although hard to tell and with many businesses expected to suffer significantly from this lockdown, ANZ have predicted for the OCR to remain at 0.25% for the foreseeable future and GDP growth is expected to go backwards by 5 to 6%. Unemployment is expected to rise to about 8-10%, and banks' lending criteria will tighten up hugely.
The good news is that China is now coming out the other side after their two month lockdown and community spread is said to have stopped. We've started our lockdown earlier than most other nations, and that could mean that we can recover faster than most.
To view the latest mortgage rates, view our rates table here.