Hello and a warm greeting to you all from Tracy. I sincerely apologise for not keeping up with my monthly blog messages since April. It has been a tough year for me with several trips between China and New Zealand, all while trying to spend quality time with my dear mum, who was very ill and sadly passed away on 20th August.
As I take the time to refocus back into my daily role as a financial advisor, I want to begin by expressing my deepest gratitude to all of you. Without you—my valued clients—I wouldn’t have the privilege of doing what I love. As 2024 winds down, I’d like to take a moment to reflect on the mortgage market trends, the lessons we’ve learned, and how we can prepare for the opportunities ahead to ensure you’re set for a smarter 2025.
2024 Mortgage Market Challenges and Trends
The New Zealand mortgage market in 2024 has faced several challenges, with rising interest rates, regulatory changes, and economic uncertainties affecting both buyers and lenders. Key challenges include increased mortgage servicing costs as interest rates remain elevated, which is putting pressure on both homeowners and investors. As a result, many homeowners are rethinking their financial strategies, with some opting for refinancing or taking advantage of lower fixed rates before further increases.
Lessons learned from this period highlight the importance of long-term planning and staying informed about interest rate trends. Homebuyers and investors are increasingly focusing on securing pre-approvals and ensuring their budget aligns with rising mortgage payments. Furthermore, adapting to government policies and regional variations in the housing market has become crucial, especially with policies like the Debt-to-Income (DTI) rule, which might restrict borrowing capacities.
The New Zealand mortgage market is likely to be shaped by several key trends. Expectations suggest that interest rates will continue to decrease, which could boost buyer confidence—especially in the lower end of the market. Policy changes such as the reduction in the Brightline test and the return of investor interest could spur more activity, particularly from first-home buyers and investors. Some regional markets are expected to remain active, with high demand in areas like Auckland and Christchurch, alongside growing international interest. (Check out the full analysis from NZ Sotheby’s Realty and OneRoof websites for more insights.)
Lessons to Take Forward
- Proactive Planning Pays Off
The adage “The best time to plan was 20 years ago— the next best time is NOW” rings true. Every year you delay financial preparation can increase the challenges ahead, but every small action you take now builds a stronger foundation. Starting sooner means more options for the future, making you better prepared for whatever comes your way. - The Value of Expert Guidance
Navigating the mortgage landscape can be overwhelming, but you don’t have to do it alone. Partnering with a trusted mortgage advisor ensures you’re making informed decisions tailored to your goals. The right expert will not only help you with interest rates but can also provide a comprehensive approach to your overall financial strategy. - Care for Yourself and Your Mindset
Achieving your homeownership goals isn’t just about the numbers—it’s about maintaining a healthy, positive mindset. The pressures of planning, decision-making, and managing finances can be overwhelming, especially when there are uncertainties. Lean on your support system and remember that your well-being is just as important as financial success. With a positive mindset, you’ll find it easier to make the tough decisions.
Five Steps to Maximise Your Mortgage Strategy
- Review Your Mortgage Terms with Expert Advice
Interest rates have fluctuated throughout 2024. As your fixed rate nears expiry, consider reviewing your options to lock in a competitive rate or restructure your mortgage for better terms. Floating rates are still higher than fixed rates, so weigh your options carefully. This decision can be complicated, so it’s a great idea to consult your advisor to ensure you make the best choice. - Check Your Home Equity
Property values in New Zealand have shown resilience in certain areas. A quick home valuation could reveal opportunities, whether it’s refinancing, funding renovations, or starting an investment journey. Platforms like Corelogic and Valocity can provide a solid indication of your home’s current value range which can be used as a great tool to check if you are meeting bank’s LVR requirements. - Assess Your Repayment Strategy
A clear repayment plan is your key to long-term savings. Consider increasing repayments or making lump sum contributions—small changes now can significantly reduce the interest you’ll pay over the life of your loan. - Plan for Interest Rate Changes
The uncertainty around future rate movements can be unsettling, but it shouldn’t stop you from planning. Start building a financial buffer now to stay prepared for potential increases in repayments. A proactive approach today can help you manage future changes without added stress. - Self-Care & Seek Support from Family and Friends
While we’re focused on financial goals, it’s important not to overlook self-care. The process of planning, decision-making, and managing finances can be mentally and emotionally taxing. Surrounding yourself with a trusted support network is crucial. Whether it’s sharing your concerns with family or simply taking time to unwind, caring for your mental well-being can make all the difference.
Take the Next Best Step
The best financial decisions come from being informed and proactive. If you’ve been putting off reviewing your mortgage or planning your property goals, the best time to act is NOW. With interest rates stabilizing and opportunities ahead, 2025 holds great promise for those who are ready.
Reflect on what 2024 has taught you, identify where you want to go, and start building the path toward your goals today. The earlier you act, the better prepared you’ll be to navigate the future.
Let’s set you up for success in 2025—Feel free to reach out and let’s talk about your mortgage options. Together, lets create a strategy that works for you!
* Disclaimer: We recommend that you seek personalized, professional advice from your trusted adviser before taking any action, as each applicant’s situation can vary. The above content is only general commentary.
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