The current housing market in New Zealand has been heavily influenced by interest rates, which play a significant role in determining the affordability of home ownership. Low interest rates have encouraged more borrowing and spending, leading to an increase in demand for housing and driving up prices.
In 2021, the Reserve Bank of New Zealand (RBNZ) kept interest rates low in an effort to support the economy and encourage borrowing during the COVID-19 pandemic. This has resulted in a competitive housing market, with prices continuing to rise in many areas and more people turning to homeownership as a secure investment.
For first home buyers, low interest rates can be a double-edged sword. On one hand, low interest rates make it easier for them to secure a mortgage and purchase a home. On the other hand, high demand and low supply have driven up prices, making it more difficult for first home buyers to find affordable options.
It’s important to note that interest rates are constantly fluctuating and can have a significant impact on the housing market. As a result, it’s important for home buyers to stay informed and make informed decisions when buying a home. This can include researching current market trends, understanding the different types of mortgage options available, and seeking the advice of a financial advisor or mortgage broker.
By being informed and proactive, home buyers can take advantage of favourable market conditions and find the home of their dreams, regardless of fluctuations in interest rates.