Mortgage wars heat up once again as banks compete to get first time buyers with their record low home loan interest rates.

Here’s what you need to know:

Mortgage Wars Heat Up Post-Lockdown

Banks are offering record low interest rates to heat up the mortgage wars between New Zealand’s largest banks. ASB was leading the race at the end of last week, offering a 2-year fixed @2.69% undercutting moves made by rival banks earlier the same week.

Craig Sims, ASB executive general manager of retail banking, said the reduced rate would be welcome news for those first time buyers looking to take advantage of low house prices, “We hope this will help them manage their home loans or enable others to be in a position to get into their first home.” Sims also commented that the bank recognises that it is a hard time for existing customers and hoped this would offer some relief, “We’re doing everything we can to support them and make things a little bit easier. We’re confident these new rates will help with that.”

ASB’s main competitors, Westpac and ANZ had both announced earlier in the week that they would cut their one-year fixed term rate to 2.7%. Echoing sentiments made by Sim, ANZ managing director retail and business banking Ben Kelleher hoped these record low rates would help customers stay afloat in unprecedented times, “These new rates reflect a new reality where many home loan customers are facing uncertain times and our commitment to keeping rates as low as possible to help ease the pressure.”

House Auction Sales Begin to Rise in Level 2

Residential auction activity has seen a slow but positive rise as COVID-19 restrictions are eased, especially in Auckland where auction activity is traditionally strongest.

At Barfoot’s latest auctions the overall sales rate was 53%, compared to 48% in the week from March 16-22, signaling that activity could eventually return to pre-lockdown conditions in due time. One of the most impressive sales of the week was a modern, four bedroom/three bathroom, brick and tile house in Epsom with a Rating Valuation of $2.275 Million, that ended up selling under the hammer for $2.51 million.

Apartments were also seeing a lot of interest in the city, with Ray White City Apartments selling three of five apartments on offer in their auction, attracting multiple bidders.

While it may take the next few weeks to get a true indication of where we are heading, these results are certainly and early indication that the market may just land on its feet.

by Ravi Mehta, from Professional Financial Solutions