While many of us have enjoyed what weather wise has been a ripper of an NZ summer so far many are still spending their times checking out open homes as activity levels leading up to Christmas and the last couple of weeks have been exceptionally busy. This may be primarily with us dealing in the investor market as the statistics provided by the Reserve Bank indicate that while the dollar value of approvals is up 16% on the same time last year the number of approvals is about the same.
One point that is being enjoyed by mortgage holders across the board is the fact that interest rates have dropped as a result of increased bank competition and the plummet in oil prices meaning that inflation is expected to be at least 1.1% lower than was expected before the price drops. There is a flattening of the interest rate curve at the moment with there being very little differential once discounts are offered between the short term rates and the longer terms. This does mean that for investors who are definitely planning to hold for the next few years and who want price stability that it may be a good time to grab some of the longer term rates on offer. Also note that in some cases clients may be able to break and refix at a lower rate and benefit even when taking the possibilities of break fees into account.
To look at this further please email us HERE
In Auckland in particular the mainstream media (see HERE for an example) is continuing to mention the likelihood of price rises however for those of you whom have a few properties already it may be worth keeping an eye out to see if anything happens on Wednesday as there is some speculation that the 5 + property rule that has been under discussion over the last 12 months might be elaborated on further (See HERE for further info).
Even if the 5+ rule doesn't come in or is watered back in some way be aware that the RBNZ is not going to want the property market to continue to get out of control so there is definitely the possibility for further rules to be introduced this year potentially making finance harder to source.
If you want to talk to one of the team to see how you stack up in regards to the ability to get finance please click HERE and someone will be in touch.
Wishing you a healthy and successful 2015
Kris Pedersen & the team.