However, this may just have been a short-term pause back in October. After all, the LVR rules ease from today, the 1.5% cash-backs came roaring into life in November (suggesting that bank-switching may have ramped up again), and we\u2019ve always got to keep an eye on the debt-to-income ratio figures too. In particular, the share of loans done at DTI>7 for investors has recently risen to more than 13% \u2013 still below the 20% cap, but the highest since January 2023. <\/p>\n
Given all of this, it wouldn\u2019t be a surprise to see a renewed lift in lending activity as the data becomes available for November onwards. <\/p>\n
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Cotality chief economist Kelvin Davidson: “With mortgage rates down and the economy now showing hints of a turnaround, property values should start to rise modestly again in 2026.” Photo \/ Peter Meecham<\/p>\n
3. Peak \u2018pain\u2019<\/p>\n
Meanwhile, Cotality’s latest Pain & Gain Report, which examined the gross gain or loss from property resales in Q3, found that \u2018only\u2019 88% of sellers got a price higher than they originally paid. That’s the lowest share of gain since 2013, or in other words, the level of pain in the market was the highest in more than a decade. <\/p>\n
As always, hold period plays a key role here. The median ownership length for those profit-making sales was 9.5 years, whereas the losses had only been held for a typical 3.7 years. Making a purchase and then having to sell again during a market has been a tough situation. But this may well be about as bad as it gets for sellers. With mortgage rates down and the economy now showing hints of a turnaround, property values should start to rise modestly again in 2026. <\/p>\n
4. More good news for house-builders<\/p>\n
The first piece of data to watch this week is Stats NZ new dwelling consents for October. September was a strong result, and it\u2019ll be interesting to see if there\u2019s a solid follow-up in October \u2013 here\u2019s hoping. <\/p>\n
5. Will people fix for five? <\/p>\n
The Reserve Bank will publish on Friday its October data on the terms people chose when taking out a new mortgage. I suspect there\u2019ll still be a focus on floating and short-term fixes as people try to time their loans at the bottom of the interest rate cycle before potentially thinking about fixing longer again. But when that time comes, will most borrowers still favour 12-month fixes, or are we bold enough to go for a five-year term (which would have been a profitable approach in mid-2021)? <\/p>\n