Four ways low rates have boosted the market
In his latest market update, the leading economist outlines how record-low mortgages have helped the property market defy pre-Covid expectations.
1. The economist says the Reserve Bank's decision to slash the official cash rate to 1% last year encouraged "a new flow of buyers into and reduced flow of sellers out of the residential property market". Low term deposits have also driven people into the housing market and away from traditional savings, he said.
"The RB cuts cemented in the turning of Auckland’s cycle from its flat period to upward and added strength to the regions," he said.
2. The Reserve Bank's emergency cut in March has "again [energised] buyers and discouraged people from selling and accepting lower returns from the likes of term deposits," Alexander added.
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