Have we hit the Bottom?
Understanding the current trends in the New Zealand housing market is crucial for homebuyers, sellers and investors. Recent indicators suggest that the housing market may have reached its bottom, offering potential opportunities for those interested in entering or investing in the property market.
One contributing factor to the potential bottoming out of the housing market is the peaking of inflation. As inflation stabilizes, it can boost confidence in the economy, leading to more predictable pricing for goods and services. This stability can create a balanced environment in the housing market, increasing the likelihood of price stability and providing opportunities for buyers and investors.
The Reserve Bank of New Zealand’s (RBNZ) Official Cash Rate (OCR) target also influences the housing market. The RBNZ is nearing its OCR target, with a 0.25% increase expected in May and no further increases anticipated soon. The OCR directly affects interest rates and borrowing costs, and as interest rate hikes slow down, the housing market can experience greater stability, reducing uncertainty for buyers and investors.
The easing of Loan-to-Value Ratio (LVR) restrictions is another factor contributing to the potential bottoming out of the housing market. Looser LVR restrictions make it more accessible for a wider range of buyers to secure mortgages and participate in the market, leading to increased demand and activity.
Increased market activity, including more buyers and sellers participating and higher attendance at open homes, is another sign that the housing market may be reaching its bottom. This heightened activity, along with other stabilizing factors, creates opportunities for buyers and investors to enter the market with a clearer understanding of the conditions.
Overall, as the New Zealand housing market stabilizes and confidence grows, it becomes an opportune time for homebuyers and investors to make informed decisions and take advantage of the current market landscape.
If you want to talk about buying, selling or investing then give me a call so me can meet and discuss your next move.