Crunching the numbers for mortgage-holders
The upward lift in interest rates by ASB, ANZ, BNZ and Westpac will impact new borrowers. For example, a 0.36% increase resulting in a 2.95% initial interest rate equates to additional repayments of $1,824 per year ($152 per month) across a recent home buyer’s $800,000 mortgage on a 30 year home loan term.
Should interest rates keep rising, and reach the long-term average of 6% (which for now is a scenario-based indication, rather than an actual forecast), that same new buyer would pay an extra $19,164 in mortgage repayments per year ($1,597 per month), or around $4,800 per month in total repayments across the balance of the home loan term. Even a new borrower with a ‘lesser’ mortgage, say $500,000, will need to find another $246 to $388 a month ($2,952 to $4,656 a year) in repayments if rates move up to 3.5% or 4%.
Community Scoop » Is This The Turning Point Of New Zealand s Property Market?
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By Kelvin Davidson, Chief Property Economist, CoreLogic New Zealand
Wellington’s property market has been on a prolonged upswing since 2015 and if anything that boom has intensified over the past nine to 12 months (post-COVID). What’s been going on lately and does it tell us anything about future prospects?
Starting with average values themselves, in June 2015 the figure for wider Wellington (defined here as city, Porirua, Lower Hutt, Upper Hutt) was $459,751. Now, only six years later, the number has jumped to $1,024,649 – a rise of 123%, or $564,898.
As the chart shows, each of those sub-markets has risen strongly over the full six years since 2015, but even more so in the past 12 months. Even the ‘cheapest’ market in Upper Hutt now has an average property value of more than $850,000.
MARK TAYLOR / STUFF
The Waikato Regional Theatre is tipped to dramatically change the central city with a host of other multimillion-dollar projects on the cards.
There’s not a single housing market round the country which hasn’t been running hot of late but, of the big North Island cities, Hamilton stands out for its comparative affordability. Make no mistake, the market is seeing strong price growth, frantic buyer activity and increasingly low levels of housing stock. But while a three-bedroom, two-bathroom unit in Hillcrest in Auckland recently sold for $1 million, according to Trade Me Property, for that money you could have bought a five-bedroom, two-bathroom standalone house on a large section in Rototuna in Hamilton – it sold for $980,000. Another sale was a five-bedroom, one-bathroom standalone house, but with limited land, in Beerescourt for $954,500.
CoreLogic NZ’s latest
Property
Market & Economic Update cements evidence
from a number of market indicators that investor demand has
surged back to 2016 levels. Kelvin Davidson, CoreLogic’s
Senior Property Economist, says there is a rising
possibility that a 40% deposit requirement for investors
could be officially mandated later in the
year.
“CoreLogic’s Buyer Classification series
shows that mortgaged investors surged to a 27% market share
in the final quarter of 2020, up from 24% in Q2. This growth
coincided with a 6.1% increase in property values in the
quarter; a rise not seen since the three months to February
2004 at 6.6%.
“The last time that mortgaged
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