First time buyers get boost as auction success continues into July

One of the country’s biggest banks has made it easier for first home buyers to get into their dream home by becoming the first in the market to offer a single rate card. Auction activity continues to be healthy despite being in the middle of winter - showing no signs of slowing down.

Here’s what you need to know:

ASB moves to single fixed rate card

ASB has taken the lead in making it easier for first time buyers to get into a home, by becoming the first of the main banks in the market to have a single rate card offer.

The bank announced last week that it will be moving from having two fixed home loan rate cards for home lending to just one - a move that will put thousands of dollars back into the pockets of first home buyers with less than 20% equity.

The bank has previously offered two rate cards; special rates for customers with 20% equity and standard rates for all other customers. The move will allow all customers to access lower rates, irrespective of their equity levels.

ASB’s executive general manager for Retail Banking Craig Sims commented that the move is aimed at helping more kiwis get into their first home, while managing their financial wellbeing, “This is going to help our first home buyers in particular, as they often have lower equity, and so face higher rates. This will give them a leg up and hopefully help more New Zealanders into home ownership.”

This has followed earlier moves by ASB and other big banks in helping first time buyers – and the market – by offering record low interest rates and compassionate care options. But the move to a single rate card, removing higher rates for lower equity customers is the latest move to support home lending customers.

“The home ownership journey is an incredibly exciting one, but we know it can also be stressful for many of our customers. The move to a single rate card is going to help make it simpler and easier.”

Auction success continues to soar in July

July continues to see success in property auctions, with yet another week seeing nearly twice as many homes are being offered at auction compared to this time last year, as well as increased sales rates.

In the week from 6-12 July, interest.co.nz monitored 253 residential property auctions, which was up 86% compared to the 136 auctions in the equivalent week (8-14 July) of last year.

The sales rate was also higher, with 116 sales recorded in the week from 6-12 July this year, which gave an overall sales rate of 46%, compared to 50 sales recorded in the equivalent week of last year which gave a sales rate of 37%.

This increased level of activity has been seen as extremely positive by those watching the current market, as these numbers are very healthy for the middle of winter – a traditionally tough time for the market.

Sale prices also remained firm, interest.co.nz was able to match selling prices with the rating valuations of 98 of the 116 properties that sold, of those, 81% achieved prices that were higher than their rating valuations.

-by Ravi Mehta, from Professional Financial Solutions