Hi Guys
i know i’ve been saying this for 12 months but i think i should say it again.
Those of you who own properties in NZ or who are planning to buy in NZ need to look at Fixing your interest rates.
The variable (or floating rate) is now 9% (9.3% for westpac) however the Fixed rate is still an attractive 7.6% at the major banks for 5 years and 7.9% for 3 years.
In the short term the Reserve bank expects to continue to lift interest rates, but who know whats going to happen in 12 months time?
Regards westan
Properties in the USA 15-25% returns- email to join our database [email protected]
It is a little like Australia in the late 80s. Governments do not realise that you can damage an economy by continueing to lift rates. Although most people fix there rates many according to a broker I know has stated that many will shortly be coming off lower fixed rates. I hope that the reserve bank does not keep on tightening rates. They should be offering more incentives to save.
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand Property Researcher and education
One Day property investment research workshop just $290 Melb 26 NovemberNigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
… yuh? Higher interest rates DO provide incentive to save. They also discourage malinvestment which often leads to unsustainable asset price bubbles.
I agree with westan. I also still suggest that investors in Oz may be prudent to at least consider the same.
Cheers, F.[cowboy2]Higher interest rates do not provide an incentive to save. If people already have a home loan then it restricts the amountr of available money they have to spend or invest
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand Property Researcher and education
One Day property investment research workshop just $290 Melb 26 NovemberNigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Okay then. But I think both Keynes and Mises would probably disagree, as would ING and Bankwest who have created billion dollar businesses in Australia in very short periods of time… by offering higher interest rates (than existing banks).
My opinion stands – low interest rates encourage debt, high interest rates encourage savings.
Regards, F.[cowboy2]good for you
lets treat all of the public like children rather than try and educate them
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand Property Researcher and education
One Day property investment research workshop just $290 Melb 26 NovemberNigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
I think the jist of this is, if the interest rates are too high to borrow, investment/spending decreases. Then the funds that would have been used in coporation with a loan of some description get either saved at bank interest rates, and/or invested elsewhere with the money they have.
Also, I suggest that it’s not a matter of educationg the public, but rather the public not wanting to hear the bad news… thus continue to spend using their credit cards till it bits them in the bum.
Nothing like learning from experience!
The first step is always the biggest
Hi Guys,
The whole interest rate discussions seems to be a bit of a moot point if you are to believe the figures quoted on tonights tv2 news here in NZ.
80% of housing finance is currently funded through fixed rates. That is, 80% of every single dollar is fixed already at the low rates of the past few years.
I have rates of high 5’s through to 7 fixed from 2 to 5 years with every loan coming off a fixed rate at a stagger. That’s just the way I did it. Seems everyone else had the same idea as me.
To add to that everyone who is currently coming off fixed can fix for another 5 years if they like for 7.5 %. There is fierce competion in the fixed rate market and there are still plenty of adds on the telly from banks saying that if they can’t match the rate of the competitor they will give you cash.
Most modern loans products allow borrowers to switch from variable to fixed loans for a nominal fee anyway. This is probably why 80% of people are on fixed rates.
Pretty sure that at the moment the five year rate is the cheapest fixed rate out there. I will leave the interpretation of that to the bankers but my guess is that it has a fair bit more to do with the internation price of money than local NZ monetary policy.
Those of us who think property is a medium to long term investment will have invested with a long term strategy. This includes calculating and minimising the cost of finance and focusing on management and control of our investments.
Cheers
[email protected]
NZ Investors & Property Spotters
Renovations & Project Management
Email now to receive info on the lastest deals!Hi Guys
The whole interest rate discussions seems to be a bit of a moot point if you are to believe the figures quoted on tonights tv2 news here in NZ.Don if those figures are true (no reason to doubt them) then there are still 20% of the market that are on the variable rate, better for them to fix it don’t you think ! that was my original intent of the post to make people aware that now is the time to fix if they haven’t already. I know i keep saying the same message “fix your rates in NZ” ( i msut sound like a record i’ve been telling people to do it for 18 months, but there are so many new people on the forum better they get the message.
regards westan
Properties in the USA 15-25% returns- email to join our database [email protected]
Hi Westan,
Yeah, they said it again on the late news.
What the radio said yesterday was that the reserve is spewing because as they raise the rates everyone is just swaping to the fixed so the 20% number will just shrink away.
Exporters have to put up with the rate induced high currency and the rate rises are not having much effect on the demand for housing.
Tv1 dragged some economist out last night who reckons that it could take 2 years for the reserve to have any effect on the market with the way debt is held.
So fixed is the way I was just saying that most people have.
Cheers
[email protected]
NZ Investors & Property Spotters
Renovations & Project Management
Email now to receive info on the lastest deals!Hi Don
the worry is if people switch to fixed rates but down alter their spending habits NZ is headed for huge economic problems.
Not the least of which will be higher interest rates and the negative impact they have on the whole economy. Loss of profits foir exporters , loss of jobs etc ettc , it keeps going on.have a read of Bollards “media release” from a few days ago, he is very concerned about the NZ economy.
regards westan
Properties in the USA 15-25% returns- email to join our database [email protected]
You must be logged in to reply to this topic. If you don't have an account, you can register here.
