Reprieve for first home buyers in Auckland:
First home buyers in Auckland finally have something to cheer about, due to several factors:
- Investors are being pushed out of Auckland
Due to the new LVR rules (30% deposit on investment properties) and lower yields for investment properties we have seen many investors pushed out of the Auckland market. Many of them are now heading towards Hamilton and Tauranga, among other places.
- Clearance rates at auctions have lowered
This is in favour of the buyer; they can make a conditional offer whilst having certainty that if they spend money on the valuation and legal costs that they have the first right to either purchase or not. I recently met a client who spent $7000 on preparing for auctions only to lose out, so this is welcome news for first home buyers.
- Prices seem to be more realistic
With clearance rates dropping, some investors from abroad temporarily out of the market and investors seeking better returns, we have seen properties sell for slightly more realistic prices – a real advantage for those coming into the market for the first time.
50% chance of a rate cut before Christmas:
Three weeks ago I was sitting with clients saying I don’t expect a rate cut before Christmas as dairy prices rebounded and there was no imminent concern. Now I’m predicting a 50%, chance of a rate cut happening; we’ve had three consecutive negative dairy auctions and inflation is still perilously low. Keep an eye out for the next OCR announcement on the 10th of December.
ASB’s view of rates in 2016 and beyond:
According to ASB Bank’s Quarterly Economic Forecasts for November, New Zealand will see a low interest rate environment stick around for another two to three more years.
Low inflation and a subdued global backdrop are the major reasons for low interest rates to hold on, with ASB chief economist Nick Tuffley saying the bank’s economic outlook is for moderate growth, although the economy still faces a number of risks.
Fixed Rates Due
If you have any fixed rates due to expire don’t hesitate to contact us so we can negotiate rates for you. We know what the most competitive rates are and can give you appropriate advice.
As always give me a call if you have any questions in regards to rates or investment.
0211 9444 24