Another week, another attempt to rein in the property market. So what has happened this week.
1. The Reserve Bank has dictated that Banks and other lenders can lend a maximum of 60% of the purchase price of a property if the buyers are not going to live in the property (investors).
2. Unlike previous restrictions they have not limited the change to the Auckland market, it is to be nationwide.
3. They have also further restricted banks’ ability to lend over 80% to owner occupied buyers. Previously they could have a maximum of 10% of their lending in that space in Auckland and 15% in the rest of New Zealand. Now it will be 10% across the country.
So what does it all mean and will it stop the property market going up. The answer in the short term is possibly as the changes did late last year but long term probably not.
Interest Rates Will Go Lower
The most interesting comment of the week was more around interest rates with the Reserve Bank virtually confirming they will be lowering the OCR at the next review on August 8.
I think we can expect a 0.25% cut. Banks’ are notoriously bad at passing on these cuts but I believe we will see rates of well below 5% for 5 year mortgage money in the near future.
Current Best Rates
Floating 5.45%
6 months 4.50%
1 year 4.25%
2 years 4.29%
3 years 4.34%
4 years 4.89%
5 years 4.99%
Note: These rates are the lenders carded rate and we can always negotiate for a better rate.
1. The Reserve Bank has dictated that Banks and other lenders can lend a maximum of 60% of the purchase price of a property if the buyers are not going to live in the property (investors).
2. Unlike previous restrictions they have not limited the change to the Auckland market, it is to be nationwide.
3. They have also further restricted banks’ ability to lend over 80% to owner occupied buyers. Previously they could have a maximum of 10% of their lending in that space in Auckland and 15% in the rest of New Zealand. Now it will be 10% across the country.
So what does it all mean and will it stop the property market going up. The answer in the short term is possibly as the changes did late last year but long term probably not.
Interest Rates Will Go Lower
The most interesting comment of the week was more around interest rates with the Reserve Bank virtually confirming they will be lowering the OCR at the next review on August 8.
I think we can expect a 0.25% cut. Banks’ are notoriously bad at passing on these cuts but I believe we will see rates of well below 5% for 5 year mortgage money in the near future.
Current Best Rates
Floating 5.45%
6 months 4.50%
1 year 4.25%
2 years 4.29%
3 years 4.34%
4 years 4.89%
5 years 4.99%
Note: These rates are the lenders carded rate and we can always negotiate for a better rate.
