2024: Mortgage market booms despite soaring rates and prices.

Despite high interest rates and strong house prices, experts predict that the mortgage market will continue to grow in 2024. Finspo chief executive Angus Gilfillan expects the market to grow at a slower pace than during the pandemic, but believes that first-time buyers will benefit from more stability and government grants. However, borrowers will have to search harder for the best deals as interest-rate increases have reduced borrowing power and made loan refinancing more difficult. Over the past two years, banks have engaged in a “mortgage price war” by offering low fixed-rate loans and cashbacks, which has eroded their profit margins. Experts believe that while mortgage competition may increase slightly in 2024, the intense competition seen in recent years is likely to subside. PropTrack senior economist Paul Ryan expects competition to remain similar to the past six months, with higher interest rates being passed on to borrowers. While strong house prices and high interest rates may dampen first home buyer activity, it is still expected to grow at a solid rate. Lendi Group co-founder Sebastian Watkins predicts a challenging year for first-time buyers but believes that innovation from lenders and government bodies in the refinancing space could ease some of the challenges. As for the big four banks, there will likely be continued competition, but limited room for most lenders to move due to pressures on their margins. Overall, experts anticipate a constrained mortgage market for the next six months, with a potential pick-up in competition later in the year.