Housing

Home Loan Rate Report: How low can you go?

11 Mar 2025

• The RBNZ’s Official Cash Rate (OCR) was held at 5.5% between May 2023 and August 2024, the highest level since 2008
• But with the economy slowing, and inflation cooling, the RBNZ lowered the OCR in August 2024 (-0.25%), and again over subsequent meetings to 3.75% at the time of writing
• Our view is the RBNZ will continue to reduce the OCR over 2025 but are near the end of its easing cycle

Housing Confidence: Optimism persists, but momentum slows

24 Feb 2025

• There was a slight drop in the proportion of respondents expecting interest rates to fall rather than rise, reflecting rising concerns about the upside risk to inflation due to external influences
• For the sixth consecutive quarter, Kiwis' expectations for house prices remain positive
• However, recent optimism on house prices softened nationwide over the three months to January, with a noticeable drop between December and January 

Home Loan Rate Report: Lots of action between RBNZ meetings

12 Feb 2025

• The RBNZ’s Official Cash Rate (OCR) was held at 5.5% between May 2023 and August 2024, the highest level since 2008
• But with the economy slowing, and inflation cooling, the RBNZ lowered the OCR in August 2024 (-0.25%), and again in October and November (-0.5%)
• Our view is the RBNZ will continue to reduce the OCR over 2025 but is over half way through its easing cycle

Home Loan Rate Report: Mixed impact of another 0.5% RBNZ OCR cut

16 Dec 2024

• Central banks around the world including NZ held monetary policy at restrictive levels until recently to lower inflation
• NZ’s Official Cash Rate (OCR) was held at 5.5% between May 2023 and August 2024, the highest level since 2008
• But with the economy slowing, and inflation cooling, the RBNZ lowered the OCR in August 2024 (-0.25%), and again in October and November (-0.5%)

Housing Confidence: Confidence is on the rise

26 Nov 2024

• There was a significant increase in the proportion of respondents expecting interest rates to fall rather than rise
• This is the highest rate of respondents anticipating lower interest rates since the ASB’s Housing Confidence Survey began in 1996
• Kiwis' expectations for house prices remain positive for the fifth consecutive quarter 

Home Loan Rate Report: RBNZ delivers a 0.5% cut, mortgages keep easing (Oct 17 update)

17 Oct 2024

• Central banks around the world including NZ held monetary policy at restrictive levels until recently to lower inflation
• NZ’s Official Cash Rate (OCR) was held at 5.5% since May 2023, the highest level since 2008
• But with inflation now cooling, the RBNZ has lowered the OCR in August 2024 (-0.25%), and again in October (-0.5%). Our view is the RBNZ will continue to reduce the OCR in November and over 2025

Home Loan Rate Report: RBNZ delivers a 0.5% cut, mortgages keep easing

16 Oct 2024

• Central banks around the world including NZ held monetary policy at restrictive levels until recently to lower inflation
• NZ’s Official Cash Rate (OCR) was held at 5.5% since May 2023, the highest level since 2008
• But with inflation now cooling, the RBNZ has lowered the OCR in August 2024 (-0.25%), and again in October (-0.5%)

Housing Confidence: Conflicted

04 Sep 2024

• There was a big jump in the proportion of respondents picking interest rates will fall rather than rise
• The last time this many respondents were picking interest rate falls was in Q3 2020 (when the RBNZ was contemplating negative interest rates)
• However, house price expectations dropped sharply in the three months to July

Home Loan Rate Report: Mortgage rates move lower, RBNZ starts cutting OCR

20 Aug 2024

• Central banks around the world including NZ have held monetary policy at restrictive levels until recently to lower inflation
• NZ’s Official Cash Rate (OCR) was held at 5.5% since May 2023, the highest level since 2008
• But with inflation now cooling, the RBNZ has lowered the OCR in August 2024, and in our view will continue to reduce the OCR at upcoming meetings later this year and over 2025

Home Loan Rate Report: The tide’s turning

11 Jul 2024

• Central banks around the world have held monetary policy at restrictive levels for a protracted time to lower inflation.  New Zealand is no exception
• The Official Cash Rate (OCR) has been at 5.5% since May 2023, the highest level since 2008
• But with inflation now cooling, many central banks have either started, or are getting ready, to ease

Housing Confidence: Nearing a tipping point?

29 May 2024

• Interest rate expectations have shifted with more people now expecting rates to fall
• Net 44 per cent of respondents think house prices will increase, however this fell slightly from net 51 per cent in the previous three months
• The country remains divided on whether it is a good time to buy or not with just net 2 per cent saying it is a good time – unchanged from the last quarter

Home Loan Rate Report: Sticky inflation to delay rate cuts

24 Apr 2024

• Central banks around the world have monetary policy settings restrictive to reduce inflation.  New Zealand is no exception
• The Official Cash Rate (OCR) is 5.5% (and has been at this level since May 2023), the highest level since 2008.  The OCR is a key determinant of mortgage interest rates and so it’s no surprise that mortgage rates are also sitting around recent highs
• But with it becoming clearer that the next move in the OCR will be lower, the question on everyone’s mind is when will that be reflected in home loan rates?

ASB Housing Confidence: Price expectations diverging as market turns

07 Mar 2024

• House price expectations build on last quarter’s survey, with net price expectations now sitting at the highest level in almost two and a half years.  That’s just before the housing market downturn began
• Fewer respondents are expecting interest rate increases, an ongoing trend.  However, more respondents still expect higher rather than lower interest rates on balance.  This suggests New Zealanders are braced for the high interest rate environment to continue
• Meanwhile, respondents are firmly on the fence as to whether now’s a good time to be buying a house.  We acknowledge that there are quite a few conflicting signals for prospective buyers: a turning market, policy changes, high debt servicing costs, possible debt-to-income restrictions and upfront affordability constraints

Home Loan Rate Report: Counting chickens with caution

08 Feb 2024

• The Reserve Bank of New Zealand (RBNZ) lifted the Official Cash Rate (OCR) to 5.5% in May 2023 and subsequently signalled it had most likely done enough to contain inflation
• Over the past year the question has changed from “will rates go higher”, to “when will the OCR and mortgage rates start to come down”
• ASB economists think the OCR will get cut in the second half of 2024 

Home Loan Rate Report: Mortgage rate pressures are coming down

20 Dec 2023

• The Reserve Bank of New Zealand (RBNZ) lifted the Official Cash Rate (OCR) to 5.5% in May and signalled it had most likely done enough to contain inflation
• The questions since then have changed from “will rates go higher”, through to when will rates (both the OCR and mortgages) start to come down
• To cut to the chase, we now think the OCR will get cut in the second half of next year, rather than early 2025, as we had been forecasting, and the RBNZ had been indicating

Housing Confidence: Stand by for lift-off – but how high?

19 Dec 2023

• For the first time in eighteen months, more New Zealanders expect house prices to increase than decrease
• Recent data show the market warming up, but interest rates are almost certainly acting as a weight on activity
• New Zealanders aren’t anticipating much of a shift on that front just yet, with just 15% expecting rates to fall

Housing Confidence: More Kiwis spy a housing market turnaround

16 Oct 2023

• More and more Kiwis think house prices are past their lows and are set to increase
• The proportion of respondents expecting further mortgage lifts is trending down, but few Kiwis expect much of a reduction any time soon – that’s the right call in our view
• Kiwis are still relatively evenly split on whether or not it is a good time to buy: the risk of tipping into negative equity is lower than it was, but high interest rates make things a tricky business for many

Home Loan Rate Report: Mortgage rates high for longer

09 Oct 2023

• The Reserve Bank of New Zealand (RBNZ) lifted the Official Cash Rate (OCR) to 5.5% in May and signalled it had most likely done enough to contain inflation
• The RBNZ has held the OCR at its subsequent meetings including the October review
• But it is also signalling that keeping rates high for a significant period is required to win the war with inflation

Home Loan Rate Report: Upward pressure on fixed term rates returns

12 Sep 2023

• The Reserve Bank of New Zealand (RBNZ) lifted the Official Cash Rate (OCR) to 5.5% in May and signalled it has most likely done enough to contain inflation
• The RBNZ has held the OCR at its subsequent meetings
• ASB economists now see the current 5.5% OCR level as the peak for this cycle, but upward pressure on fixed-term mortgage rates has returned, as longer-term interest rates (including government bonds and bank term deposits) lift

Home Loan Rate Report: RBNZ on hold, mortgage rates peaking

18 Jul 2023

• The Reserve Bank of New Zealand (RBNZ) lifted the Official Cash Rate (OCR) to 5.5% in May and held it steady at its July meeting
• ASB economists see the current 5.5% OCR level as the peak for this cycle, and mortgages are likely at or near a peak
• This report is an update of the June ASB Home Loan Report with the latest mortgage rates and thoughts on the outlook as at Mid-July

Home Loan Rate Report: RBNZ appears more comfortable with interest rates

16 Jun 2023

• The Reserve Bank of New Zealand (RBNZ) lifted the Official Cash Rate (OCR) to 5.5% in May and signalled it has most likely done enough to contain inflation
• ASB economists now see the current 5.5% level as the peak for this cycle
• The RBNZ looks done, with its inflation forecasts released in May very marginally lower and back within the target band from mid-2024

Housing Confidence: Kiwis edge closer to a housing market turning point

13 Jun 2023

• House price expectations improve a shade, but remain deeply in the red
• Respondents are evenly split on whether or not it’s a good time to buy as they try and pick the market’s eventual turning point
• A hefty majority expect further interest rate rises, but more Kiwis think mortgages are getting close to their peak

Home Loan Rate Report: Are we there yet?

01 May 2023

• Mortgage rates have been rising over the past year and a half, consistent with the Reserve Bank of New Zealand (RBNZ) progressively hiking the Official Cash Rate (OCR) since October 2021
• Over 2023, the RBNZ has increased the OCR by another 100 basis points or 1%
• However, over the same time, floating rates have risen by less than half that amount (40 basis points or 0.4%), and some fixed rates have actually fallen

Home Loan Rate Report: OCR up, mortgage rates down?

22 Mar 2023

• Mortgage rates have been rising over the past year and a half, consistent with the Reserve Bank of New Zealand (RBNZ) progressively hiking the Official Cash Rate (OCR) since October 2021
• Yet in the month that followed the  RBNZ’s February 2023 rate hike we have seen floating rates largely remain steady, and some fixed rates have been trimmed
• Concerns about slower economic growth over the years ahead, and a belief that inflation will eventually be tamed, have weighed on longer term interest rates this year

Housing Confidence: Gloom resumes

06 Mar 2023

• House price expectations take a tumble and are closing in on Global Financial Crisis lows
• Respondents once again think it’s a “bad” time to buy a house on net, but remain off recent lows
• Over three quarters of respondents expect higher interest rates over the next year, in line with our forecasts 

Home Loan Rate Report: Going inverted

24 Jan 2023

• Mortgage rates have been rising over the past year and a half, consistent with the Reserve Bank of New Zealand (RBNZ) progressively hiking the Official Cash Rate (OCR) since October 2021
• Higher and persistent inflation pressures have fuelled concerns about how high the OCR (and in turn borrowing costs) may go to get inflation back in check
• But at the same time, concerns about slower economic growth over the years ahead, and a belief that inflation will eventually be tamed, have recently weighed on longer term interest rates

Housing Confidence: Glimmer of light at the end of the tunnel, or a train?

16 Dec 2022

• Confidence that now is a good time to buy a house moved out of the red in the three months to October
• House price expectations were downbeat but stable: in contrast we have taken an axe to our own forecasts
• A significant majority of respondents still expect interest rates to rise over the next year, few expect falls 

Home Loan Rate Report: Mortgages lift following the RBNZ’s latest hike

08 Dec 2022

• Mortgage rates have been going up and up over the past year and a half, and the Reserve Bank of New Zealand (RBNZ) has been progressively hiking the Official Cash Rate (OCR) since October 2021. 
• Mortgage rates have lifted again over the past month in the wake of the RBNZ’s latest hike.
• Mortgages are expected to increase further in 2023 as the RBNZ keeps lifting the OCR, even in the face of slowing economic growth.
  

Home Loan Rate Report: Long-term mortgages lift again

09 Nov 2022

• Over the past 18 months mortgage rates have gone up and up and the Reserve Bank of New Zealand has been progressively hiking the Official Cash Rate.
• Mortgage rates have lifted again over the past month and are expected to increase further.
• ASB Economics continue to think it is prudent to budget for higher mortgage rates over this year and next.

Home Loan Rate Report: High CPI prompts further interest rate increases

20 Oct 2022

• Fixed-term mortgage rates have risen significantly since early 2021 and, despite the recent dip in some fixed-term mortgage rates, we predict more increases over the rest of the year
• We think it is prudent for borrowers to budget on mortgage interest rates being higher than they are now over the coming years
• We expect most fixed-term mortgage interest rates will peak within a 7-7.5% range over the year ahead. Floating rates could peak around 9%. However, as is often the case, the outlook is far from certain

Home Loan Rate Report: Upward pressure on mortgage rates resumes

12 Oct 2022

• Recession concerns have been an opposing force to the inflation fears that have been driving interest rates higher
• Those concerns saw interest rates retreat from earlier highs over winter, and some mortgage rates were trimmed – particularly the longer-term rates
• But the RBNZ continues to signal more OCR increases over the year ahead, and the upward pressure on mortgage rates has resumed

Housing Confidence: Seeing is Believing

25 Aug 2022

• Housing confidence falls to 13-year lows as the housing market downturn deepens
• Buyer sentiment bounces off low levels, as falling house prices and booming wage growth ease affordability pressure
• Interest rate expectations hold at record highsSome summary points

Home Loan Report: Conflicting forces give borrowers a break

12 Aug 2022

• It’s been a one-way street for borrowers over the past year – mortgage rates have gone up and up as the Reserve Bank of New Zealand (RBNZ) has progressively hiked the Official Cash Rate (OCR)
• Higher and higher rates of inflation have fuelled concerns about how high the OCR (and in turn borrowing costs) might need to go to get inflation back in check
• Similar developments have been playing out offshore

Home Loan Report: Looking for the peak

28 Jul 2022

• Fixed-term mortgage rates have been lifting since early 2021, and we predict more increases over the rest of the year for the popular fixed rates (1-2 year terms)
• Long-term mortgage rates have risen the most over the past year but could be near the peak
• Short term rates still have a way to go and are expected to lift the most over 2022, as the RBNZ keeps lifting the OCR

Home Loan Report: Bracing for higher mortgage rates

23 Jun 2022

• The RBNZ has lifted the Official Cash Rate significantly off the record low level set during the pandemic, and continues to signal more increases over the year ahead.
  
• Similarly, mortgage rates have lifted significantly off the lows set during the pandemic. Long-term mortgage rates have risen the most over the past year but could be nearing a peak.  
  
• Short term rates still have a way to go and are expected to lift the most over 2022,  as the RBNZ keeps lifting the OCR.

Housing Confidence: Thump

03 Jun 2022

• The public’s house price expectations have crashed back down to earth, although a small majority still expect prices to rise over the coming 12 months
• The silver lining is a small bounce in buyer sentiment, but most still reckon it’s a bad time to buy
• There’s a bow-wave of mortgage rate re-fixing approaching, but households can at least see it coming. A net 81% of respondents expect interest rates to keep rising over the coming 12-months – a 26-year high

Home Loan Report: RBNZ delivers another 0.5% hike, more to come

30 May 2022

• The RBNZ lifted the Official Cash Rate by 0.5% in April and then again in May
• The RBNZ continues to signal more increases over the year ahead
• Mortgage rates have lifted significantly off the lows set early last year

Home Economics: Bracing for Impact

13 May 2022

• House prices are falling but the bulk of the impact from the mortgage rate surge is yet to come
• Faster and larger lifts in mortgage rates mean we now expect modest house price declines through to mid-2023. All told, we expect around a 12% decline. In real terms though, this would amount to a 20% correction
• We expect a house price inflation recovery to kick in over the second half of 2023, tied to our forecasts for an upturn in net migration and flattening mortgage rates

Home Loan Rate Report: RBNZ steps up the pace of interest rate increases

14 Apr 2022

• The RBNZ lifted the Official Cash Rate by 0.5% in April and continues to signal more increases over the year ahead
• Mortgage rates have lifted significantly off the lows set early last year
• Long-term mortgage rates have risen the most over the past year but could be nearing a peak 

Home Loan Rate Report: RBNZ steps up the pace of interest rate increases

14 Apr 2022

• The RBNZ lifted the Official Cash Rate by 0.5% in April and continues to signal more increases over the year ahead
• Mortgage rates have lifted significantly off the lows set early last year
• Long-term mortgage rates have risen the most over the past year but could be nearing a peak 

Home Loan Rate Report: Mortgage rate increases expected to continue

15 Mar 2022

• RBNZ has lifted the Official Cash Rate (OCR) three times since last October. More OCR increases are expected over 2022
• Mortgage rates have lifted significantly off the lows set early last year
• Long term rates are up the most over the past year. Short term rates will increase this year as the RBNZ keeps lifting the OCR

Housing Confidence: Confidence creaks as market peaks

10 Mar 2022

• The public’s perceptions about house prices are changing as the indicators turn down
• Confidence in rising prices is creaking, and buyer sentiment has fallen to the lowest level in 26 years
• At the same time, the public has never been more convinced interest rates are going to keep rising

Housing Confidence: Don't Look Down

06 Dec 2021

• The overwhelming majority of kiwis expect interest rates to keep rising.
  
• But this hasn’t shaken kiwis’ housing confidence, which actually increased last quarter.
  
• Conversely, perceptions of whether it’s a good time to buy crumble to 5-year lows.

Home Loan Rate Report: Long-term rates back above 5%

03 Dec 2021

• The RBNZ has lifted the Official Cash Rate (OCR) in October and November. More OCR increases are expected over 2022.
• Mortgage rates have lifted significantly over 2021.
• Long term rates are up the most so far. Short term rates will increase as the RBNZ keeps lifting the OCR.

Housing Insights: House Prices - From hero to zero in 2022

01 Dec 2021

• Supply and demand dynamics in the housing market are finally changing.
  
• Lofty house prices are at risk from the confluence of three big macro forces next year.
  
• We’ve updated our forecasts to take account of these risks, and now expect small falls in house prices over the second half of 2022.

Home Loan Rate Report: Mortgage rate increases continue

05 Nov 2021

• The RBNZ has begun lifting the Official Cash Rate.
  
• More RBNZ rate hikes are expected, which will contribute to more upward pressure on mortgage rates.

Home Loan Rate Report: RBNZ lifts the OCR, mortgage rate rises expected

14 Oct 2021

• The RBNZ lifted the Official Cash Rate (OCR) in October, as expected.
• More OCR increases are expected at upcoming meetings.
• Related to this, mortgage rates have lifted, and more increases are expected over the year ahead.

Home Loan Rate Report: Mortgage rates keep moving higher

14 Sep 2021

• Despite the August COVID-19 outbreak causing the Reserve Bank of New Zealand (RBNZ)  to keep the Official Cash rate at a record low 0.25%, mortgage interest rates keep rising.
• Mortgage rates have lifted in September, and more increases are expected over the year ahead.
• The ASB Economics team thinks every RBNZ meeting should be considered "live" for Official Cash Rate increases, although the latest COVID-19 outbreak is a reminder that the situation is fluid.

Darn the torpedoes

13 Sep 2021

• Kiwi's expectations of continued house price increases have been surprisingly hard to sink.
  
• And the perception remains that it is still a relatively challenging time to buy a house at present.
  
• Respondents were increasingly aware of the likely upward journey for interest rates.

Home Economics: Upcycling

25 Aug 2021

• We’ve upped the amount of ‘cycle’ in our house price inflation forecasts: more this year, less next.
• Therecent COVID outbreak means a chunk of activity will get postponed, rather thancancelled. But we don’t think this will have a lasting impact on the houseprice outlook, assuming the lockdown is brief. 
• Higher mortgage ratesare a gamechanger. But most of the house price impact will occur next year. Wehaven’t materially changed our mortgage rate forecasts despite the RBNZ’sAugust pause. 

Home Loan Rate Report: Mortgage rate increases remain on the horizon

20 Aug 2021

• The RBNZ did not lift the Official Cash Rate (OCR) in August as widely expected, instead pausing because of the latest COVID-19 outbreak and related Alert Level 4 lockdown.
• The pause to assess the latest developments is entirely appropriate, but OCR increases are still on the cards for upcoming meetings, and more mortgage rate increases are expected.
• The ASB Economics team thinks every Reserve Bank of New Zealand (RBNZ) meeting should be considered “live” for Official Cash Rate (OCR) increases, although the latest COVID-19 outbreak is a reminder that the situation is fluid.

Home Loan Rate Report: Mortgage rates on the rise

10 Aug 2021

• We are past the low point, and fixed-term mortgage rates have been lifting.
• The ASB Economics team thinks every Reserve Bank of New Zealand (RBNZ) meeting should now be considered “live” for Official Cash Rate (OCR) increases.
• Our expectation that the RBNZ will lift the OCR several times in succession influences our mortgage forecasts and our thoughts regarding the various strategies for borrowers.

Home loan rate report: How high, how far, how fast?

08 Jul 2021

• We are past the low point for most mortgage interest rates, and long-term mortgage rates have been lifting.  Our forecasts suggest more increases are coming for mortgage rates over the rest of the year.
• ASB now expects the Reserve Bank of New Zealand (RBNZ) to start raising the Official Cash Rate (OCR) from its record-low setting of 0.25% in November 2021.
• Taking advantage of the lower rates on offer now, combined with our expectations that mortgage rates will keep lifting over the years ahead, influence our thoughts on mortgage strategies.

Housing Insights: Can we cope with higher mortgage rates?

29 Jun 2021

• We find households in aggregate have plenty of buffer to cope with higher mortgage rates. Household gearing and mortgage serviceability metrics are at low levels.
• But there are some sensitive spots, such as new entrants to the housing market. There’s also a bit of re-set risk out there – 77% of all mortgage debt is on fixed-rate terms of less than a year.
• At a macro level, the RBNZ will get more bang for its buck when interest rates eventually do rise. Higher mortgage rates are also a key factor behind our view house price inflation will slow down from here.

Home Loan Rate Report: Long-term mortgage rates lifting

18 Jun 2021

• We are past the low point for most mortgage interest rates, and long-term rates have been lifting.  Our forecasts suggest some modest upward pressure on all but the near-term mortgage rates over the rest of the year.
• ASB now expects the Reserve Bank of New Zealand (RBNZ) to start raising the 0.25% Official Cash Rate (OCR) by May 2022 – if not earlier.
• Taking advantage of the lower rates on offer now, combined with our expectations that mortgage rates will only rise modestly over the years ahead, influence our thoughts on mortgage strategies.

Housing Confidence Survey: Speed wobble

28 May 2021

• Kiwis’ confidence that house prices will keep rising wobbles, but remains strong.
• Further knocking back perceptions of whether it’s a good time to buy a house.
• More evidence that housing market pressure is being released only gradually.

Home Loan Rate Report: Long term rates start to rise

27 May 2021

• The resilience of the local economy over the second half of 2020 and the prospects of more improvement over 2021 impacts our outlook for interest rates, including mortgages.
• ASB now expects the RBNZ to start raising the 0.25% OCR by May 2022. However, we do not expect the OCR to move up significantly over time, with the OCR to peak at 1.25% in late 2023/early 2024. This suggests that mortgage interest rates are likely to ‘settle’ at still-historically low levels.
• We believe we are at (or past) the low point for mortgage interest rates.  Our forecasts suggest some modest upward pressure on all but the near-term mortgage rates over the rest of the year.

Housing Insights: No hard landing for housing

15 Apr 2021

• No signs of slowing from March housing data, as they pre-date government announcements.
• We expect the market to cool from here.
• We’ve lowered our house price forecasts, but not aggressively so. There are still plenty of supports out there.

Housing Confidence: All that glitters is not gold

12 Mar 2021

• Kiwis have never been more confident house prices will keep rising.
• But buying sentiment is crumbling as affordability is stretched further.
• It’s a challenging mix for policy-makers. But we think housing momentum is likely to level off soon.

Home Economics: Simmer down

10 Mar 2021

• Pace of house price increases to slow from here.
• As mortgage rates bottom and LVR restrictions return.
• We don’t expect outright falls in house prices. The housing shortage is easing only gradually and mortgage rates are not about to race higher.

Home Loan Rate Report: Mortgage rate turning point

08 Mar 2021

• The resilience of the local economy over the second half of 2020 and the prospects of more improvement over 2021 impacts our outlook for interest rates, including mortgages.
• Our forecasts suggest we could be around the low-point for mortgage rates.
• Borrowers are prudent to plan to deal with higher interest rate costs over the long run, rather than budget on rates remaining this low indefinitely.

Home Loan Rate Report: Are we there yet?

10 Feb 2021

• The resilience of the local economy over the second half of 2020, and the prospects of more improvement over 2021, impacts our outlook for interest rates, including mortgages.  Our forecasts suggest we could be at, or near the low-point for mortgage rates.
• Taking advantage of the lower rates on offer now, combined with our expectations that mortgage rates will only rise slowly over the years ahead, influences our thoughts on mortgage strategies. Fixing and then rolling fixed-term mortgages is forecast to be the cheapest option over a 5-year time horizon.
• Borrowers are prudent to plan to deal with higher interest rate costs over the long run, rather than budget on rates remaining this low indefinitely. And for those who want interest rate certainty now, the cost of fixing for longer terms, at below 3%, is very low compared to the past.

Housing Insights: Canterbury’s Housing Supply Crusade a Recipe for Auckland’s Blues?

10 Dec 2020

• House price inflation in Canterbury has tracked below most other regions over the past 10 years. Houses in Canterbury are consequently much more affordable than elsewhere.
• We perform an Auckland vs. Canterbury case study toinvestigate why this might be the case.
• With demand conditions similar, we find Canterbury’s strongsupply response to be the most likely driver.

Housing Confidence Survey: Bitter-sweet symphony

30 Nov 2020

• Housing Confidence soars as NZ’s housing market shifts up a gear.
• But stretched affordability is putting a dent in perceptions of whether it’s a good time to buy.
• We see little to slow the market down, so this mix of bitter-sweet looks set to continue in 2021.

Home Loan Rate Report: Mortgage rates keep getting lower

16 Nov 2020

• The RBNZ’s massive response to the COVID-19 situation continues to put downward pressure on mortgage rates.
• Borrowers can lock in record low interest rates now, with ASB’s fixed term rates as low as 2.49%.
• Our forecasts suggest rates could get even lower over the year ahead. Fixing and then rolling shorter term mortgages is forecast to be the cheapest option over a 5-year time horizon.
• Mortgage interest rates look set to stay extremely low over the next several years. Nonetheless, borrowers are prudent to plan to deal with higher interest rate costs over the long run, rather than budget on rates remaining this low indefinitely.

Home Loan Rate Report: Mortgage rates keep getting lower

23 Oct 2020

• The RBNZ’s massive response to the COVID-19 situation has seen mortgages press lower over recent months.
• Our forecasts suggest rates could get even lower over the year ahead. Fixing and then rolling shorter term mortgages is forecast to be the cheapest option over a 5-year time horizon.
• Mortgage interest rates look set to stay extremely low over the next several years.  Nonetheless, borrowers are prudent to plan to deal with higher interest rate costs over the long run, rather than budget on rates remaining this low indefinitely.

Housing Insights: Housing boom - who's buying

21 Oct 2020

• Investors and first-home buyers have been the most active borrowers recently.
• High-LVR investor borrowing in particular has jumped.
• The central/lower North Island, notably Wellington, are the tightest markets amongst the regions.

Home Economics: Housing shortage sustaining house price momentum

13 Oct 2020

• Blink and you would’ve missed it. The housing “correction” is behind us.
• A more severe housing shortage, a less gloomy outlook for the labour market, and the RBNZ’s effective “green light” for asset price cycles all promise to keep house prices rising at a rapid clip over the coming 12 months. Flat-lining net migration and some roll-back of policy support will slow rather than stall the market next year.
• We have materially upgraded our forecasts. We now expect annual house price inflation of 9% by year end, and have flipped the small negative we had in for June 2021 to an 11% positive annual increase.

Home Loan Rate Report: Mortgage rates could press even lower

31 Aug 2020

• The RBNZ’s massive response to the COVID-19 situation has seen mortgages press lower over recent months and borrowers can lock in record low interest rates now, with fixed term rates as low as 2.55%.
• Our forecasts suggest rates could get even lower over the year ahead; fixing and then rolling shorter term mortgages terms is forecast to be the cheapest option over a 5-year time horizon.
• While mortgage interest rates look set to stay extremely low over the next several years, borrowers are prudent to plan to deal with higher interest rate costs over the long run, rather than budget on rates remaining this low indefinitely.

Housing Confidence: Seeing light at the end of the tunnel

28 Aug 2020

• Views on whether it is a good or a bad time to buy a house are the most optimistic since 2012.
• House price expectations have partly recovered from lockdown depths.
• Unsurprisingly, a greater proportion of respondents expect interest rates will fall further.

Housing Insights: Lower mortgage rates…higher house prices

26 Aug 2020

• We lower our mortgage rate forecasts.
• And lift our house price forecasts.
• We now expect national house price inflation to fall 2.8% by March, milder than the 6% fall previously forecast.

Home Loan Rate Report: Mortgage rates are at record lows, so what next?

13 Aug 2020

• The RBNZ’s massive response to the COVID-19 situation has seen mortgages press lower over recent months.
• Borrowers can lock in record low interest rates now, with fixed term rates as low as 2.55%.
• Our forecasts suggest fixing and then rolling shorter term (1- and 2-year) mortgages terms is likely to be the cheapest option over a 5-year time horizon.

Home Economics: Doom or Boom? A post-lockdown housing stocktake

21 Jul 2020

• Recent housing commentary appears to encapsulate everything from doom to boom. We stocktake the post-lockdown state of house prices, rents, turnover, and inventory to try and provide some clarity.
• We’re left happy occupying the less pessimistic end of the house price forecasting spectrum. In fact, if anything the recent run of data and anecdotes have come in on the stronger side of our view. Still, it’s early days and we suspect pent-up demand will fade in coming months.
• Our overall view remains unchanged. We continue to expect a modest 6% fall in NZ national house prices.

Home Loan Rate Report: Mortgage rates drop as RBNZ pulls out the stops

24 Jun 2020

• Mortgage interest rates appeared to have hit their lows in late 2019.  However, the RBNZ’s massive response to the COVID-19 situation has seen mortgages drop to fresh lows over recent months.
• Our forecasts suggest fixing and then rolling shorter term (1- and 2-year) mortgages terms is likely to be the cheapest option over a 5-year time horizon.
• We expect mortgage rates to stay low for several years.  Nonetheless, borrowers should still plan to deal with higher interest rate costs as fixed terms mature in the future, rather than budget on rates remaining this low indefinitely.

Housing Confidence Survey: Whipsaw

27 May 2020

• Confidence in rising house prices whipsawed by COVID-19.
• Perceptions of whether it’s a good time to buy also decline as households batten down the hatches.
• Interest rate expectations flick back to lower for longer.

Housing Insights: Thinking about the new normal for housing

29 Apr 2020

• NZ’s housing market will emerge from lockdown into some big headwinds.
• House prices are likely already falling, but estimating how far/fast they fall is difficult.
• We provide our thoughts on the key factors to consider.

Housing Insights - Runnin' on empty: when will home listings rise?

29 Apr 2020

• Housing inventory is at rock bottom levels right around the country.
• We find some evidence to suggest listings, at least in Auckland, should rise from here.
• A failure to do so could see prices bust through our house price inflation forecasts.

Home Economics: Housing immunity about to be tested

17 Mar 2020

• The NZ housing market got off to a flying start in early 2020.
• But COVID-19 has changed the game. The NZ economy is headed for recession, and we have slashed our house price inflation forecasts accordingly.
• We are now forecasting small house price declines for the next two quarters, and annual house price inflation to slow to zero by March 2021.

Housing Confidence Survey: Housing confidence to be tested

12 Mar 2020

• Confidence in rising house prices hits the highest level in three years…
• …knocking back perceptions of whether it’s a good time to buy.
• Expectations on whether interest rates would fall again were dialled back. But recent events suggest lower rates are on the way once again.

Home Loan Rate Report: Mortgage rates could dip on coronavirus response

10 Mar 2020

• Mortgage interest rates appeared to have hit their lows in late 2019. However, if the RBNZ changes its view and cuts the OCR again as we now forecast, we could see another dip for floating and fixed rates.
• The Reserve Bank of New Zealand (RBNZ) cut the Official Cash Rate (OCR) to a record low 1.0% last August and, as global concerns mount, we think the RBNZ will join other central banks and cut the OCR again soon.
• Our forecasts suggest fixing and then rolling shorter term mortgages terms is likely to be the cheapest option over a 5-year time horizon.

Home Loan Rate Report: Mortgage rates could be as low as they’ll get

19 Feb 2020

• The Reserve Bank of New Zealand (RBNZ) cut the Official Cash Rate (OCR) to a record low 1.0% last August.  Since then it has maintained that developments do not warrant more policy stimulus despite risks to the outlook (including the coronavirus). 
• Mortgage interest rates appear to have hit their lows in late 2019. From now on, we expect mortgage rates to gradually rise unless the RBNZ changes its view and cuts the OCR again.  The RBNZ seem less likely to lower the OCR any further (their eventual move could be a hike). Regulatory changes could also provide upward impetus.
• Borrowers can lock in very low interest rates now, but should plan to deal with higher interest rate costs as fixed terms mature.  Our forecasts suggest fixing in the 1- to 2-year horizon and then rolling over on similar terms is likely to be the cheapest option over a 5-year time horizon.

Home Economics: Time to upgrade

17 Dec 2019

• The latest indicators suggest the NZ housing upturn is gathering steam, broadly as we’ve been expecting.
• The Auckland market has reawakened, joining already fizzing regional markets.
• We kick the tyres on our house price forecasts, and upgrade slightly our view of Auckland and Canterbury.

Home Loan Rate Report: Could this be the low point for mortgage rates?

12 Dec 2019

• At this juncture we think most mortgage interest rates won’t move much lower than they are now. Furthermore, there is now some upward pressure on fixed mortgage interest rates, coming courtesy of: the upward drift in global interest rates; markets recalibrating expectations for the RBNZ; and as regulatory changes take effect.
• Borrowers can lock in very low interest rates now, but should still plan to deal with higher interest rate costs over the long run.
• The RBNZ has surprised markets a couple of times recently.  In August it cut the Official Cash Rate (OCR) by a bigger than expected 0.5% to a record low 1.0%.  Since then it has maintained that developments do not warrant more policy stimulus despite slowing domestic and global growth.  We thought the RBNZ would lower the OCR again in November, and think RBNZ will cut the OCR one more time in 2020.

Housing Confidence Survey: Good vibrations

09 Dec 2019

• Kiwis are picking up good vibrations from NZ’s housing market.
• All three of our key housing confidence measures lifted in Q3, for the second straight quarter.
• This sentiment matches the turn higher we are seeing in most key indicators of the housing market. House price inflation is picking up and we expect the upturn to continue through to at least the middle of 2020.

Home Loan Rate Report: A bird in the hand or two in the bush?

21 Nov 2019

• Borrowers can lock in very low interest rates now, but should still plan to deal with higher interest rate costs over the long run.
• Since August, the RBNZ has maintained that developments do not warrant more policy stimulus despite slowing domestic and global growth. We still think RBNZ will cut the OCR again in the future. 
• But if the floor in the OCR is 1.00%, mortgage interest rates are unlikely to move much lower than they are now. There is now some upward pressure on mortgage interest rates, given the upward drift in global interest rates, as markets recalibrate expectations for the RBNZ, and as pending regulatory changes take effect.

Home Loan Rate Report: Mortgage rates set fresh lows

29 Oct 2019

• Borrowers can lock in very low interest rates now, but should still plan to deal with higher interest rate costs over the long run.
• Interest rates for shorter-term mortgages had dipped lower this year, and eased further since the RBNZ’s August cut.
• Longer-term mortgage interest rates had already been falling prior to this year’s RBNZ rate cuts.  The significant dip in these rates occurred between 2017 and early 2019.

Home Economics: And so it begins

22 Oct 2019

• The spring lift in NZ’s housing market we’ve been expecting appears to be upon us
• The Auckland market is looking far more sprightly, while hot regional markets have lost a little momentum
• We continue to expect nation-wide house price inflation to pick up to 5-6% yoy by mid-2020.

Home Economics: Bracing for spring growth

26 Aug 2019

• We expect nation-wide house price inflation to pick up from the current annual pace of around 1.5%, to 5-6% by mid next year. Spring will be a key test of our view.  
• The RBNZ’s determination to get kiwis borrowing and spending could see a more enduring cycle take hold. But we think there are enough offsetting factors out there to limit the extent of the upturn.
• July housing data were consistent with the idea that the housing market may be slowly turning higher. Although, as our Regional Heatmap shows, conditions remain highly variable across the country.

Housing Confidence Survey: Home comforts

26 Aug 2019

• Housing confidence is tentatively turning higher. All three of our key confidence measures we monitor show respondents are feeling more positive about housing relative to the situation three months ago.
• This sentiment broadly matches the nascent signs of a turning we’ve seen in other housing data.
• House price expectations crept higher, interest rate expectations fell sharply, and more people believe now is a good time to buy a house.

Mortgage rates edge even lower

16 Aug 2019

• The RBNZ cut Official Cash Rate (OCR) to a record low 1.0% in August, and could cut it again in the future.
• Floating rates swiftly dropped after the RBNZ’s surprise 0.5% OCR cut in August.
• Interest rates for shorter-term mortgages had dipped lower this year, and eased further in the wake of the RBNZ’s August cut.
• Longer-term mortgage interest rates had already been falling prior to this year’s RBNZ rate cuts. The significant dip in these rates occurred between 2017 and early 2019.
• Borrowers can lock in very low interest rates now, but should still plan to deal with higher interest rate costs over the long run.

Home Loan Rate Report: How low can they go?

30 May 2019

• The RBNZ cut Official Cash Rate (OCR) to a record low 1.5% in May, and could cut it again over the year ahead.
• Carded interest rates for shorter term mortgages have generally dipped this year, and could ease further.
• Borrowers can lock in very low interest rates now, and should still plan to deal with higher interest rate costs over the long run.

Housing Confidence Survey: Proposed capital gains tax impacts housing views

27 May 2019

• House price expectations fell across the country in the three months to April 2019, with Auckland house price expectations turning negative for the first time since 2009.
• Interest rate expectations reveal most respondents expected interest rates to remain unchanged, or rise, ahead of the RBNZ’s cut to the Official Cash Rate in May.
• On balance, it’s a slightly better time to buy in Auckland, but most have no strong view either way.

Housing Confidence Survey: Cautious cheer for buyers as Year of the Pig begins

15 Feb 2019

• House price expectations slipped slightly again in the three months to January, though respondents were still more bullish than they were 12 months ago in the aftermath of the 2017 election.    
• Interest rate expectations continue to decline significantly, remaining at two-year lows.
• For the first time in more than five years, a plurality think it’s a good time to buy – but only by a whisker.

Home Loan Rate Report: Low for longer

22 Nov 2018

• We expect floating and short-term fixed mortgage interest rates to remain around current levels well into 2019.
• The tick-shaped curve and our expectations of a mild RBNZ tightening cycle suggest shorter-term fixed rates should continue to offer good value.
• There are a number of forces influencing mortgage interest rates at present, with downward pressures on rates prevailing over recent months. Nonetheless, borrowers should still plan to deal with higher interest rate costs in the future.

Housing Confidence: Price expectations falter

19 Nov 2018

• House price expectations eased in the three months to October, with price expectations lower across all regions.
• Lower interest rate expectations have likely been shaped by falling fixed mortgage rates and increasing expectations that the RBNZ may leave rates on hold for longer.
• The balance of respondents still think it’s a bad time to buy, but views were the least negative in over five years.

Home Loan Rate Report: Holding steady

30 Aug 2018

• We expect floating and short-term fixed mortgage interest rates to remain around current levels well into 2019.
• The tick-shaped curve and our expectations of a mild RBNZ tightening cycle suggest shorter-term fixed rates should continue to offer good value.
•  There is the risk that mortgage interest rates increase faster and more significantly than what our forecasts currently assume.  Borrowers should think about their appetite for risk and ability to absorb higher interest rate costs should this occur.

Housing Confidence Survey: Moving on...slowly

16 Aug 2018

• House price expectations continue to recover, with overall expectations at more than one-year highs.
• Respondents’ interest rate expectations are largely unchanged with the majority still expecting higher interest rates in the year ahead.
• The balance of respondents still think it’s a bad time to buy, but views were the least negative in over two years.

Home Loan Rate Report: Low and steady for now

05 Jul 2018

• We expect floating and short-term fixed mortgage interest rates to remain around current levels into 2019.
• The tick-shaped curve and our expectations of a mild RBNZ tightening cycle suggest shorter-term fixed rates should continue to offer good value.
•  There is the risk that mortgage interest rates increase faster and more significantly than what our forecasts currently assume.  Borrowers should think about their appetite for risk and ability to absorb higher interest rate costs should this occur.

Home Loan Rate Report: A higher road ahead

24 May 2018

• We expect floating and short-term fixed mortgage interest rates to remain around current levels into 2019.
• The tick-shaped curve and our expectations of a mild RBNZ tightening cycle suggests shorter-term fixed rates should continue to offer good value.
• There is the risk that mortgage interest rates increase faster and more significantly than what our forecasts currently assume.  Borrowers should think about their appetite for risk and ability to absorb higher interest rate costs should this occur.

Housing Confidence Survey: Post-election rebound

22 May 2018

• House price expectations rebound from post-election lows, with improvement evident for all regions.
• On balance, respondents still expect interest rates to rise over the next year.
• The balance of respondents still think it’s a bad time to buy, but views were the least negative in two years.

Home Loan Rate Report: A balanced approach

01 Mar 2018

• We expect floating and short-term fixed mortgage interest rates to remain around current levels for the rest of 2018, with rates to drift up prior to RBNZ hikes from August 2019.
• The tick-shaped mortgage borrowing curve and our expectations of a mild RBNZ tightening cycle suggest that the 1 to 2-year part of the mortgage curve should continue to offer good value.
• There is the risk that mortgage interest rates move up more quickly and significantly than what our forecasts currently assume.  Borrowers who place a high premium on certainty and stability may want to consider fixing a portion of their loan for longer terms.

Housing Confidence Survey: Game of two halves

20 Feb 2018

• House price expectations at 6 ½ low, driven by falling expectations in the North Island.
• On balance, respondents expect interest rates to rise over the next year.
• The majority of respondents still think it’s a bad time to buy, but are the least negative in nearly two years.

Home Loan Rate Report: Where to from here?

08 Jan 2018

• NZ interest rates largely unchanged from this time last year.
• However, we expect longer-term interest rates to move higher this year as US interest rates lift.
• Floating and short-term fixed rates may rise in late 2018 with expectations of an early 2019 RBNZ OCR hike.

Housing Confidence Survey: Price expectations hit 6-year low

09 Nov 2017

• The soft housing market sees house price expectations sink to a 6-year low in the three months to October.
• While interest rate expectations ease after hitting a 3-year high earlier in 2017.
• On balance, respondents outside of Christchurch still think it’s a bad time to buy a house.

Home Loan Rate Report: Signs pointing to slightly higher interest rates ahead

04 Oct 2017

• NZ interest rates are down a touch from July, reflecting a period of tax reform uncertainty in the US.
• However, we expect this to be short-lived as US interest rates have begun to grind higher again.
• Locally, bank funding costs remain a constraining factor despite the RBNZ sitting on the sideline.
  
  

Housing Confidence Survey: Housing slowdown reflected in price expectations

25 Aug 2017

Slower housing market activity and house price growth have weighed on expectations for higher house prices.

Interest rate expectations steadied, in line with the interest rate outlook.

Respondents still think it’s a bad time to buy a house, but less so than in the previous quarter.

Home Loan Rate Report: Still waiting for US tax reforms

03 Jul 2017

Markets are in limbo waiting for Trump’s pro-growth tax policy reform.

In the meantime, the US Federal Reserve has raised interest rates twice in 2017.

Further, bank funding remains squeezed, keeping pressure on interest rates despite the OCR remaining on hold.

Home Economics: Breaking infrastructure barriers

06 Jun 2017

Infrastructure provision is one of the biggest challenges councils face across the country.

But, current infrastructure funding models have contributed to under-investment in housing-related infrastructure.

As a result, Councils need to be open to a broader range of funding methods. 

Price expectations continue to cool

15 May 2017

Slower housing market activity and house price growth have weighed on expectations for higher house prices.

Interest rate expectations continue to climb higher.

Respondents still think it’s a bad time to buy a house, with pessimism growing in all regions but Auckland.

Housing Confidence: Price expectations cool in line with a slowing housing market

20 Feb 2017

A cooling housing market appears to have cooled expectations for higher house prices.

But interest rate expectations continue to climb higher, reflecting recent lifts in mortgage rates.

Overall, respondents still think it’s a bad time to buy a house, but are less pessimistic than 3 months ago.

Home Loan Rate Report: The Trump effect

15 Feb 2017

Trump’s proposed policies have seen US interest rates lift sharply since his  election as US President.

Combined with bank funding pressures, mortgage rates have lifted across the curve. 

We expect interest rates to continue to creep higher, despite the RBNZ remaining on hold until late 2018.

Home Loan Rate Report: Mortgage rates lifting off lows

23 Nov 2016

Bank funding challenges have limited mortgage rate falls, despite the RBNZ cutting the OCR in August & November.

We are not expecting the RBNZ to cut the OCR beyond current levels.

Combined with higher offshore rates, mortgage rates look to have bottomed out.

Housing Confidence: Are the good times over?

07 Nov 2016

More people than ever before think now is a bad time to buy a house.

Net expectations of house prices moderated but remain high, and fewer people are expecting interest rates to fall.

The latest LVR restrictions could be weighing on both buyer sentiment and house price expectations.

Mixed pressures on mortgage rates muddy outlook

24 Aug 2016

Mortgage rates have remained largely steady since April’s Home Loan Rate Report.

Increases in funding costs have limited mortgage rate declines following the RBNZ cutting the OCR in August.

We are expecting another 25bp cut in November, which may put some downward pressure on mortgage rates.

Three months to July 2016

16 Aug 2016

Sentiment around whether or not it is a good time to buy a house has dropped sharply around the country.

At the same time, more people expect house prices to lift over the next 12-months.

Combined with expectations for interest rate rises, it’s not surprising to see buying sentiment shift lower.

Highly regulated and highly priced

12 Aug 2016

The Auckland housing market is highly regulated and highly priced.

Regulations reduce land development capacity and create inflexible planning processes.

The proposed Unitary Plan is unlikely to dramatically improve the housing supply response.

Sharing Auckland's pain

19 May 2016

Auckland’s housing market problems are not unique.

Other high-priced cities have comparatively sluggish housing stock expansion.

Land use regulations are a likely influence on house price appreciation.

Rising with the tide

11 May 2016

Expectations of house price increases remain high.

On balance, lower interest rates are expected.

Outside of Auckland, it is seen as a good time to buy a house.

March OCR cut sees mortgage rates move lower

08 Apr 2016

The RBNZ cut the OCR by 25bp in March and we expect two further 25bp OCR cuts this year.

Another OCR cut is likely to put further downward pressure on floating and short-term fixed mortgage rates.

There is a risk of long-term mortgage rates increasing if influential offshore rates increase this year.

Fewer expecting house price gains but see interest rates staying low

27 Jan 2016

Fewer people are expecting house price gains, with a net 44% of respondents expecting house prices will increase.

The majority of respondents expect interest rates to remain unchanged over the next 12 months.

Sentiment about buying a house varies from region to region. Nationwide a net 5% see now as a bad time to buy.

Mixed pressures on mortgage rates heading into 2016

08 Jan 2016

We expect the RBNZ to cut the OCR by an additional 50bp over the second half of 2016.

Further OCR cuts are likely to put downward pressure on floating and short-term fixed mortgage rates.

The risk is long-term mortgage rates increase if influential offshore rates increase over the course of the year.

Auckland, it's not just prices getting squeezed

15 Dec 2015

Auckland’s housing stock has been used with a greater intensity than elsewhere in New Zealand.

And, this utilisation has been increasing over time.

Housing preferences and household circumstances within Auckland are significant contributors to differences in housing utilisation.

Fewer expecting house price gains but still see interest rate falls

06 Nov 2015

Fewer people are expecting house price gains, with a net 52% of respondents expecting house prices will increase.

The majority of respondents expect interest rates to fall, second only to expectations during the Global Financial Crisis.

Sentiment about buying a house varies from region to region. Nationwide a net 8% see now as a bad time to buy.

More downward pressure on interest rates

24 Sep 2015

We expect the RBNZ to cut the OCR by an additional 25bp this year – taking the OCR to 2.5% by year-end.

Influential global interest rates have been choppy recently, but could come under upward pressure later this year.

Another OCR cut will put downward pressure on mortgage rates. Rising global rates could become an opposing force.