Home buyers and sellers are playing a wait-and-see game. Photo / Getty Images
Home buyers and sellers are playing a wait-and-see game. Photo / Getty Images
A good interest rate is more important than a cashback home loan offer financial experts say, as that is where significant savings can be made.
One mortgage broker also warns against waiting to score a home at a rock-bottom price or get ''the sale of the century'' as that rarelyhappens.
However, year-on-year fewer people were buying homes and although most Kiwis liked to have their own home heading into retirement, it was not the be-all or end-all.
Rapson Loans and Finance owner Chris Rapson said it made sense to put any cashback offers from the bank straight on your mortgage.
The difference between a $5000 cashback and shaving half a per cent off the interest rate for a $500,000 mortgage over its lifetime could be about $70,000.
''It is a whole lot more valuable. Interest rates over the long term at a reduced rate are a whole lot more important than a bit of cash upfront.''
He urged people who wanted to buy a house to seek sound financial advice as economic circumstances had changed since their parents or grandparents bought homes.
Rapson Loans and Finance owner Chris Rapson. Photo / George Novak
''Often they are in a different phase of their life and although they mean well they are looking for reasons not to do things.''
If the numbers stacked up Rapson said, in his view, property was a sound investment and he did not believe the bottom would fall out of the market.
He acknowledged there would always be people under pressure to sell their homes for less than their expectations but a lot would wait.
''So don't expect to get the deal of the century.''
It was impossible to time market changes.
''I'm a great believer in getting pre-approval and going to negotiate with confidence. If you have a willing buyer and willing seller and you find a home you should get on and do that.''
Harry van der Merwe, from Hello Mortgage and Insurance Advisers in Rotorua, said it was still tough for first-home buyers as banks were calculating affordability differently.
''Some are accessing people's affordability at between 7.35 per cent and 7.7 per cent and that is a lot higher than the current rates. So that can throw it out and a client may be approved at one bank and declined at another, it's just the way they work it out.''
''It is very hard for first-home buyers if they don't have 20 per cent deposit.
However, van der Merwe said inquiries had not fallen and it had five settlements this week.
''We are definitely busy and we have got a lot of refinances where people are moving from their existing banks, primarily because of lack of service. Some are waiting three weeks to get an appointment.''
Harry van der Merwe, from Hello Mortgage and Insurance Advisers in Rotorua. Photo / Supplied
Other people were shopping around for the best deals and he agreed a lower interest rate was better than cashback deals but sometimes you could get a combination of both.
Te Ara Ahunga Ora Retirement Commission personal finance lead Tom Hartmann said if you could service a mortgage comfortably there was no doubt it was worth it.
''Over time it has the potential to increase in value. A mortgage is also a form of forced savings that you have to put money into, to build equity and wealth.
''So by building your net worth you end up in a better position by the time you reach retirement.''
The difficulty with renting was finding affordable accommodation so that was a bit of a risk.
''But we are seeing people solve that in different ways. People are coming up with different options and alternatives from co-housing to tiny homes and intergenerational living.''
Homeownership rates had also dropped year on year.
''The latest data is coming out soon. But overall the rates are dropping year on year and going forward we don't expect that to change, fewer people will own homes.''
Most banks were offering cashback deals, BNZ was the highest at $20,000 while ANZ was $3000, SBS $2000 and other banks were open to negotiation. All were subject to conditions.
The Reserve Bank this week raised its official cash rate by 50 basis points to 2.5 per cent in its latest bid to head off inflation.
CoreLogic NZ chief property economist Kelvin Davidson said in terms of annual mortgage repayments it equates to an extra $2050 per year or so for every $100,000 of debt.
Data from the Real Estate Institute of New Zealand revealed the number of unsold homes nationally soared to 25,271 last month compared to 13,861 houses for sale in June last year.
