While there is still a lot of global volatility many things seem to be staying the same at the moment. The Auckland housing market is still going ballistic, with what seems ever increasing net migration, the council seems to be getting further and further behind in regards to issues consents to fix the supply side of the equation and the Bank war continues with rates that no one really expected to be this low this far into the cycle.
 
We are noticing more of the regional areas being targeted for investments as more and more Aucklanders get priced out of their local market and with the likelihood of further tools to try and control the housing market by the Reserve Bank this could cause this to increase further.
 
It is all but certain that in July this year the Reserve Bank will introduce a rule designed to partially correct the distortion that was created by the introduction of the LVR restriction which moved many of the property markets in favour of investors with solid equity levels.
 
This has moved away from the initial plan to do with the "5+ property rule" which could have had a reasonable price margin attached to it but wouldn't have affected that high of a proportion of the overall population to three options of which one will be finalised and introduced. These are:
 

• If the mortgage property is not owner occupied or
• If servicing of the mortgage loan is primarily reliant on rental income or;
• If servicing of the mortgage loan is at all reliant on rental income

 
Obviously these are likely to have a wider effect than the aforementioned rule that was initially posed. HERE is the most recent RBNZ document around this. THIS article also is well worth reading for many of you as it assesses the potential impact which this rule change could have and both WESTPAC and ANZ Economists have come out stating that it is definitely likely to impact the market.
 
I'm not normally much of a fan of Bernard Hickey has he has tended to repeat the same article again and again over the last few years in regards to the property market however THIS article is worth a read to at least pose the question on whether rates could go down further. I personally think that there is still more upside risk with rates than downside potential however it is definitely and interesting age we live in.

Contact us today on (09) 476 1199 or email on info@krispedersen.co.nz if you would like to talk to one of our team about reviewing your current interest rates.