Need for long-term interest rate stability

Media Release
Thursday April 30, 2009

Need for long-term interest rate stability, says First National

Today’s OCR cut will help to reassure vendors and buyers, but banks need to co-operate, First National Real Estate says.

“While sales have been strong in recent times, vendors particularly, have held back of late in the hope that buyers would be delivered better news and today seems to be just that”, First National general manager John Stewart said today.

“We note with interest the Reserve Bank Governor’s comment that the OCR will remain low, and possibly lower than at present, through until the end of 2010.” Stewart added.

“This will go a long way toward reassuring vendors and buyers that the market and affordability will stabilize”

“As another month draws to an end, in many areas of the country residential real estate has been positive. Strangely, some offices almost alongside busy areas report flat and lessening enquiry and certainly lower sales activity. Overall though, we can report on very positive first quarter sales.”

Much of that activity was prompted by lower interest rates, particularly long term ones and was measured in website activity, Open Home visitor numbers along with email and telephone enquiry.

A survey of First National’s offices around the country shows that while sales were almost uniformly the best since April 2008, listings were down across the regions for April 09 compared with the previous month, Mr Stewart said.

“Offices reporting lowering listing activity point to recent rises in long term interest rates having a dampening effect on the market.

“With a couple of our major banks this week reporting healthy profits for the past six months, we hope these profits plus today’s lower OCR will produce favourable medium and long term borrowing rates. This would go a long way to helping sustain the life we currently see in the property market.

“Should rates drop we might just well get an early winter continuation of the badly needed lift we have seen in the first quarter of the year.”

ENDS

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