Building on the trimming of their one year home loan rate late last week, TSB have done it again, this time trimming their two year fixed rate.
They have taken it down from 5.25%, which pretty much matched the main bank offers, to 4.99%, a -26 bps reduction.
At these levels TSB undercuts the main banks. But these reductions are not enough to match the existing levels of some other key challenger banks such as SBS Bank, and Heartland Bank (or the Cooperative Bank at the one year level).
Meanwhile in the background, wholesale swap rates have been moving lower as those markets settled on the idea that the prior run-up was overdone. They will probably stay lower as they await the full RBNZ Monetary Policy Statement on Wednesday, May 25 which will give a deeper understanding about how the RBNZ sees the balance between inflation risks, and the risks of a global economic slowdown. Most of a +50 bps is currently priced in for a May 25 hike. A further +40 bps is already priced in for the July 13, 2022 OCR review.
One useful way to make sense of these changed home loan rates is to use our full-function mortgage calculator which is also below. (Term deposit rates can be assessed using this calculator).
And if you already have a fixed term mortgage that is not up for renewal at this time, our break fee calculator may help you assess your options. But break fees should be minimal in a rising market.
Here is the updated snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at the moment.
| Fixed, below 80% LVR | 6 mths | 1 yr | 18 mth | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
| as at May 19, 2022 | % | % | % | % | % | % | % |
| ANZ | 4.65 | 4.55 | 4.90 | 5.25 | 5.55 | 6.35 | 6.45 |
 |
4.49 | 4.49 | 4.85 | 5.25 | 5.55 | 6.35 | 6.45 |
 |
4.39 | 4.55 | 4.90 | 5.25 | 5.45 | 5.79 | 5.99 |
 |
4.80 | 4.55 | 5.19 | 5.39 | 5.55 | 5.79 | |
 |
4.59 | 4.49 | 4.89 | 5.19 | 5.49 | 5.79 | 5.89 |
| Bank of China | 4.25 | 4.65 | 4.95 | 5.25 | 5.65 | 5.85 | |
| China Construction Bank | 4.35 | 4.45 | 4.85 | 5.19 | 5.45 | 6.15 | 6.35 |
| Co-operative Bank | 4.29 | 4.29 | 4.85 | 5.19 | 5.45 | 5.75 | 5.95 |
| Heartland Bank | 3.85 | 4.70 | 4.84 | ||||
| HSBC | 4.49 | 4.39 | 4.89 | 5.15 | 5.39 | 5.69 | 5.89 |
| ICBC | 4.39 | 4.29 | 4.79 | 5.09 | 5.35 | 5.65 | 5.89 |
 |
4.49 | 4.19 | 4.69 | 4.85 | 4.99 | 5.45 | 5.95 |
 |
4.45 | 4.34 -0.11 |
4.90 | 4.99 -0.26 |
5.35 | 5.55 | 5.75 |
Fixed mortgage rates
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4 Comments
Hutt Valley Market Update 16th May
To start with this week – the real estate agents in the Hutt have started to come to the realisation that the “property party “ is well over
I received an email from a “large Hutt Valley real estate firm” on Friday with the heading “Huge Price Reductions on these Properties”
Normally these type of email headings are reserved for Kathmandu and Briscoes and every kiwi knows you don’t pay full price at these retailers unless your desperate.
So It makes sense with these real estate headlines that buyers have quite a bit of time up their sleeves and FOMO has rapidly disappeared. Makes sense to ensure (as you would at Briscoes and Kathmandu) you don’t pay too much- further discounts are likely in the near future.
Current Market Listings
611 houses on the market- down 17 on last week.
Quite a few houses sold last week (mainly in the 700K-850K range) and also there was a large number withdrawn unsold– at least 11. May is looking to be a stronger month for sales than April and March were – recent house price falls may be encouraging people back into the market – specifically in the bottom quartile of the market
There continues to be a low number of listings this week (Consistent for this time of the year) combined with withdrawals and what looks like a consistent number of sales appears to be the key reasons for the decline in the number of houses.
Based on the REINZ data which showed that 96 sold in Feb and 104 sold in March and 98 in April giving an average sale of 25 houses per week– 611 houses means there is 24.5 weeks stock on the market.
I am expecting given the withdrawals and low number of listings for the number of listings to fall to around the mid 500’s
House Price Reductions
308 houses have a listed price
55% of the houses listed with a price have reduced their price since listing
The average markdown has fallen this week from 84K to 82K.
Of those that have listed prices (pool 308) -34 have reduced their prices by 100K (last week this was 30 properties
6 have reduced their prices by over 200K and 2 have reduced their prices by 300K with the biggest reduction been 350K (a total 20% reduction)
The data continues to show the majority of houses listed are under 900K. The Median house price for all 611 listings is now 830K. (Steady on last week and the lowest Median YTD – previous low was $839K)
REINZ data showed the April Median was 847K – my data for April showed 849K.
The latest QV valuations (valuations by QV which are updated every month and give an approximation of a houses value) have dropped $130K since Jan for the Hutt.
In April the QV valuation had dropped 80K – approximately 20K a month since the start of the year but this escalated in April – dropping 50K in one month.
Meanwhile Homes is indicating there has been an approximate $110K drop on house prices in the Hutt valley– since the peak which they are indicating was early Nov 21. According to homes prices are back to June 21 prices – so flat with this time last year.
Houses sold vs houses removed
My records show 157 houses listed with a Price have sold YTD (up 15 from last week).
I have records of a further 133 houses (up 11 from last week) that have been removed from the market unsold YTD.
18 of those houses removed from the market have been listed on the rental market
The total number of houses removed from the market in the last 4 weeks is 57 (this compares to about 5 houses delisting a week over the previous 14 weeks).
Length of time on the Market
- 441 of the houses have been on the market for over 30 days - 72% (last week it was 472)
- 303 of the houses have been on the market for over 60 days - 50% (last week it was 286)
- 169 of the houses have been on the market for over 90 days – 28% (last week was 166)
The number of houses on the market over 60 days is for the first time over 50% (one in two). This has risen from 32% of houses in mid March (one in three) and just over 1 in 4 houses have now been on the market more than 3 months.
The time to sell is getting longer and longer. Anybody looking for a quick sale of their property would need to be well under the QV valuation or have a very attractive property at a very attractive price.
A real estate agent did advise most houses are going conditional with subject to sale as the most common condition in some cases there is chain effect occurring where there are now several houses all in the chain subject to sale. So anybody with cash is going to be an attractive buyer at the moment and could probably get a premium discount on the asking price.
Rental Market
Meanwhile the rental market has 198 properties for rent (up 4 on last week), and up 93 on this time last year – when just 105 houses were for rent.
Average rental price reduction is $58 a week (up $5 on last week) and 42% have dropped their prices since listing.
As noted last week I have also been noting how many properties are listed for rent over $650 a week.
At the moment the percentage of properties listed at $650 is 41% - last week it was 40%. This is the lowest percentage of houses over $650 since the week of the 27th Sept 2021 when 38% houses listed were over $650.
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