Key Facts
- The cost of living crisis is causing discomfort among Kiwis with mortgages due to current rate levels.
- Realestate.co.nz reported that there were 11,788 new residential listings in February, a 45% increase from the same month last year.
- According to Infometrics Principal Economist, Brad Olsen, the time taken to sell a house is increasing, with a median length of 48 days between listing and selling in some parts of the country.
- Many Kiwis transitioned their mortgages to rates of around 6-7% last year, up from the 2-3% seen during the COVID-19 pandemic.
- Kiwi homeowners are reportedly spending around 49% of their average household income to service their first-year mortgage.
- ASB has recently cut some of its home lending rates for the second time in a week following the Reserve Bank’s decision to keep the Official Cash Rate (OCR) at 5.5%.
Article Summary
The ongoing cost of living crisis is putting pressure on Kiwis holding mortgages, with rising rates causing them discomfort. This situation follows the release of data from realestate.co.nz, indicating an increase in new residential listings in February – a staggering 45% jump from the same month last year, the highest for the month since 2017.
Furthermore, according to Brad Olsen, Infometrics Principal Economist, the time needed to sell a house is on an upward trend, reaching a median of 48 days in some areas. He suggested that this surge in listings could be due to homeowners trying to sell before their mortgage becomes too burdensome, despite not seeing significant price gains.
Last year, many homeowners re-fixed their mortgages to rates between 6-7%, significantly higher than the 2-3% figure seen during the COVID-19 pandemic. Currently, the typical Kiwi homeowner spends almost half their average household income on their first-year mortgage repayments. However, there’s a glimmer of respite with ASB announcing its second cut on some home lending rates in a week, following the Reserve Bank’s decision to maintain the Official Cash Rate (OCR) at 5.5%.
