By Gareth Vaughan
The BNZ has seen a recent lift in housing market activity with the bank’s retail director now feeling “optimistic” about the outlook for house sales.
Andy Symons, who took up the role as BNZ’s retail director in August after a two and half year stint as CEO of Fly Buys operator Loyalty New Zealand, told interest.co.nz in a Double Shot interview BNZ had noticed a "pleasing" recent pick up in the housing market.
Symons’ comments come as the latest weekly Reserve Bank data for mortgage approvals shows both the value and number of mortgages approved last week hit their highest level since May. There were 5,596 mortgage approvals in the week to November 26, valued at NZ$742.9 million.
Several banks, including BNZ, have been trimming some fixed mortgage rates recently in an attempt to breathe some life into the housing market.
This comes after the latest monthly sales figures from the Real Estate Institute of New Zealand (REINZ) showed just 3,903 properties were sold in October, the lowest October total since REINZ records started in 1992. The volumes were only slightly above the all-time record low for any month of 3,666 hit in January this year and was down 36% from October a year ago. However, there was a surge of new listings and First National reported sales picked up in the second half of November as banks had loosened their lending criteria.
“On a historical basis you’d have to say there are some good interest rates out there at the moment,” Symons said. “(And) there is some good (housing) stock out there at the moment.”
“My personal view is that there are some people who are keen to sell at the moment. So I’m feeling like the pick up is an indication that people are starting to realize that there are some good lending products out there that will help them get into the home, there’s some good homes out there that they could look at, and I’m feeling optimistic about the pick up we’re seeing.”
Meanwhile, Symons said BNZ was looking closely at the country’s aging population and considering introducing a product targeted at people with their wealth tied up but wanting to maintain their quality of life. This comes after ASB announced in August it was becoming the only major New Zealand bank to offer reverse equity mortgages.
Reverse equity mortgages have been controversial in the past, particularly among borrowers concerned about putting debt back into houses they had hoped to hand on to their children or heirs unencumbered. The Auckland District Law Society issued a paper on reverse equity mortgages in December 2007. It said unless the borrower was over 70 years of age and intending to borrow only a small proportion of their equity, they should be "very circumspect" about entering into such a mortgage.
Symons said BNZ was looking at this area closely.
“We’re talking to our customers a lot about what they need from us in this area. We’re looking at the aging demographic in the New Zealand market and we’re being very careful to not simply lift and import concepts from overseas that have had varying results,” Symons said.
“We will look to bring a product to market that meets the needs of people who may have some different kind of wealth tied up elsewhere but need to maintain a quality of life.”
* This article was first published in our email for paid subscribers earlier today. See here for more details and to subscribe.