The Reserve Bank of New Zealand (RBNZ) has announced an increase in the Official Cash Rate (OCR) to 5.5%, and while this may cause whopping increases for homeowners refixing their home loans this year, it’s not all bad news for first-home buyers.
Today’s 0.25% basis points increase marks the 12th consecutive increase since the tightening cycle began in October 2021, a huge shift from the OCR’s pandemic low of 0.25%.
Although it is unclear yet if mortgage rates will follow, Claire Williamson, director of My Mortgage, believes there is actually some good news for first-home buyers amidst this development.
“I suspect we’re now pretty close to the top of the rate cycle, and the bottom of the market, so now is the time for first-home buyers to act and enter the property market,” she says.
“My advice to first-home buyers is to seek guidance from your trusted financial advisor to assess your financial position and develop tailored strategies to achieve your homeownership goals. You might be surprised at how close you are to purchasing.
“There are plenty of other strategies that first-home buyers can leverage to help them accomplish their dream of owning their own home. Just this week we published a video about how to purchase with other people, even if you’re not part of a couple. And there are some great deals out there too,” she adds. https://www.mymortgage.co.nz/blog/post/104847/co-ownership-buy-with-a-friend-or-family-member/
The latest OCR increase of 25 basis points follows a string of eight consecutive hikes of at least 50 basis points, with an additional 75 basis points increase in November 2022.
