This month’s surprise 50 basis point cut in the Official Cash Rate (OCR) immediately triggered a wave of cuts in home loan offerings from the major banks, and is predicted to boost the first home buyer market.
However, Canstar’s recent research for the 2019 Most Satisfied Customer Award, Home Loans, showed many first home buyers still sacrifice on lifestyle to meet home loan repayments.
More than a third of New Zealanders cut back on shopping and eating out once they have taken out a home loan. A small number, 5%, even said they would even rethink having a child, or more children. In Auckland, that figure rose to 8%.
It remains extremely difficult to even get on the property ladder, with many young Kiwis being forced to reconsider their lifestyle choices as they try and save a deposit.
Respondents to the Canstar research, done as part of the financial sector Customer Satisfaction surveys, shared how they are cutting back to save for their first home, then manage the repayments.
Aside from foregoing shopping and eating out, Kiwis gave up Netflix and gym memberships, and cut back on personal maintenance costs such as haircuts.
Kiwibank’s customers were the most satisfied with the home loan borrowing experience. As such, the New Zealand-owned bank has received Canstar’s Most Satisfied Customer Award, Home Loans, for 2019.
“Kiwibank’s customers have told us they are extremely happy with the bank’s customer service for home loans, particularly the application process,” said Jose George, Canstar NZ General Manager.
“Half of those surveyed had taken out only one home loan, for the house where they lived. This reflects Kiwibank’s ongoing strong performance in the first home buyer market, and will be good news for the bank.
“First home buyers make up nearly 20% of the home loan market by value and this is expected to rise now home loan rates have dropped.
“However it is worth remembering that saving the required deposit to even get a home loan remains very difficult for many young New Zealanders. Our research shows some of the very big decisions they are being forced to make to the dream of home ownership come true.”