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Mortgage Interest Market Monthly Summary

Home Loans Today Interest Rates Update July 2014

July 10, 2015 by · Leave a Comment 

Home loans Today

Interest Rates Update July 2014
Current Interest Rates as at 10 July 2014
Variable               6.15%
6 Month Fixed     5.80%
1 Year Fixed        5.85%
2 Year Fixed        6.00%
3 Year Fixed        6.25%
5 Year Fixed        6.89%

The rates are an indication of the market.

Property Prices
The number of house sales around the country has started to drop, and house prices are now starting to slide in the same direction. A few factors trying to push prices in the opposite direction include an improving market backdrop, an increasing number of immigrants arriving on our shores and a decreasing number of houses for sale. But change is in the air, and we’re starting to see the initial signs of a cooling labour market.
The month of May saw a very slight rise in house sale numbers, but we are still way off the numbers we were seeing before the LVR limits were introduced. There’s no doubt that real estate turnover has become sedated, and price gains are slowing too. On the other side of the coin, a rise in migration is increasing demand for housing, and with a smaller volume of houses for sale, we’re seeing property prices resisting the drop. However, an increase in interest rates has taken its toll, and further increases are expected soon. First-home buyers are going to continue to find it harder and harder to get into the market as property becomes less affordable, even more so with increasing demands for debt servicing.
There is something to look forward too – it’s expected we’ll have an annual average GDP growth of 3.7 percent this year, with a growth of 2.9 percent estimated in 2015 too. But before you all get ahead of yourselves, remember there are still risks and vulnerabilities. While global growth continues to improve, it’s still in a fragile state. Likewise, New Zealand’s commodity prices are high, but they’re starting to fall. Also, our economy is still in debt, which means our potential growth is naturally stymied. We simply don’t have the capacity to be growing at this rate for long.
One of the major contributors to our nation’s growth is expected to be the construction sector, as the rebuild in Christchurch continues, and earth-quake strengthening is implemented throughout the rest of the country.

What’s Hot
Despite a third successive increase to the OCR, mortgage rates for a number of banks haven’t changed significantly. However, with the OCR tipped to rise even further, we wouldn’t be surprised to see rates that have resisted change go up as well. So now’s the time to look at those fixed rates, many of which sit lower than floating.

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