Article: Our House = Our Home

A Surge In  Inflation And  A Pick Up In Listings with Carie TownleyA Surge In Inflation And A Pick Up In Listings with Carie Townley

Inflation surges! So, what about rates?

Surprise! Sorry. Not the fun sort. Rising fuel and house prices have helped inflation spike to its highest level in a year. Statistics New Zealand say it rose 0.9% in the June quarter, making the annual figure 1.9%. You know something is up when fourteen economists surveyed by Bloomberg are caught off guard. They’d been betting on a 0.7% rise, while RBNZ was tipping 0.4%.

The unexpected figure saw the $NZ shoot up almost half a US cent to 65.90. If you ‘get’ monetary policy, you’ll know rising inflation often sends central bankers running to hover over the rate increase button. And by law the RBNZ must try to keep rates between 1-3%.

So, will there be a rate rise? Probably not. With petrol prices up 19% in the last 12 months and the housing market still firing, there was a lot of white noise.

So, although inflation numbers were stronger than expected, they’re unlikely to pressure the RBNZ to raise rates. In fact, the Reserve has signalled it expects to hold rates at 1.75% until early 2020. Guvna Adrian Orr even said recently they might go “down” if the economy fails to fire up properly.

Listings picking up
The New Zealand average property asking price just hit a record $690,733! Realestate.co.nz reports that, after an 18-month nap, there were 10,372 new listings in September - an 11.7% increase on September 2017. Bright-eyed and bushy-tailed Auckland leads the charge, up 31.9%, while Southland was next with 21.2%. Northland and Wellington were also wide awake with more than 13% increases.

So, what’s behind the rises?
Vanessa Taylor of Realestate.co.nz puts it down to one thing — confidence. “New Zealanders sell their house when they believe they can,” she told News Hub.

But, property commentator Olly Newland, isn’t quite so chirpy. “Some people are panicking that the market is slipping and want to go to market. And while I don’t think prices are going to come down a lot, I don’t think they’re going to go up at all. They’ll go very flat and ease off”.

Newland’s thesis is ominously backed by Real Estate Institute of New Zealand figures. They show that September house sales in Tauranga were down 11.4% compared to September 2017. Is Tauranga the canary in the coal mine?
Remember, I understand the lending criteria of over 20 different banks and lenders so if your client is unsure if they can get a loan, I can look into what’s possible.

For a personal mortgage reduction analysis to identify the strategies that are in your best interest, contact Carie today on 0275 228 940, email .(JavaScript must be enabled to view this email address).


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