What a big month it's been!
Royal Commission Report in Australia:
We’ve been well aware of its impending report but the Royal Commission’s suggested reform on the mortgage broker industry has surprised those in our industry. What was quite interesting is a commission that was meant to reprimand the banks for their indiscretions have, on the back of the findings and recommendations, caused an increase in share price of the banks being investigated?? Hopefully the authorities in New Zealand, and our Australian counterparts, take the time to ask the consumer two key questions: What is in their best interest and what would they like to see? Essentially, they are recommending the industry charges fees to the customer - both bank and broker - to secure a mortgage. And who wins out of that arrangement? Certainly not the customer.
From my humble perspective, we will continue to expand our service to our clients, as it has been from inception, and if you stick to doing what is best for your customer you can hold your head up high and stand out from the rest. On that point, I look forward to announcing, by our next newsletter, the addition of our new customer services manager, who is employed to enhance our customer experience.
In short, it was kept at 1.75% and the vocabulary used by Adrian Orr was that he does not expect an increase in the OCR until late 2020. At this point they don’t expect a decrease either. Various factors could force a change, but for now that is their outlook.
Capital Gains Tax (CGT):
Needless to say this will add cost on top of recent changes to tenancy and rental property requirements. Political opinions aside, most of the Organisation for Economic Co-operation and Development (OECD) countries have CGT in place already and that has not drastically affected the property market. In the short term it will have an effect, but over the long term I am not worried it will cause a negative-growth curve in the property market. Essentially it is a tax on profit, and profit means you’ve made money. Thus, it is not the end of the world and I would suggest that some form of it would be implemented in the near future.
New Howick Office:
Viv, Nicola, Tim, and I are very excited to move into our new office this week Friday. As with all renovation projects, it has not been straight forward and it almost feels like “The Block” at 20 Moore St, Howick. We will be open from the 4th of March so pop in and say “hi” if you are in the area.
If you have any questions at all, give us a shout as we are here to help you.