Record cuts to OCR forecast
Mortgage interest rates have dropped to their lowest level in 60 years. One bank is offering a one-year deal of below 4 percent, and others are expected to follow suit.
But that could put further pressure on the Auckland housing market.
Interest rates have been coming down slowly, but not since the aftermath of World War II has a bank offered a mortgage rate below 4 percent.
SBS is one of the smaller outfits and it's offering the one-year fixed rate with minimum equity of 20 percent. It could be the shape of things to come.
3 News has spoken to the five biggest banks, and none of them is committing to any sort of mortgage war. One said the offer was a gimmick for SBS's rebranding and that no bank could get any margin out of 3.99 percent.
The most common official line from the rest is "rates are constantly under review".
But today ASB today joined Westpac in predicting the Reserve Bank will slash the OCR three times by the middle of next year, dropping it from 2.75 to 2 percent in an effort to stimulate the economy. That means mortgage interest rates will follow and pressure on the Auckland housing market will grow.
The Government has today announced nine new special housing areas in Auckland – a total of 1100 new homes, raising the potential total to 48,000 new homes in all the Special Housing Areas. At the same time Auckland Council wants to intensify residential developments in many inner-city suburbs.
But some say it's already too little too late.
The Reserve Bank next reviews the OCR on December 10.