Happy New Year for 2014.
Through the Christmas break the newspapers have had regular articles quoting economists, all predicting a great year for property, particularly in Auckland and Christchurch, so let’s hope that proves to be true.
The strong demand for properties led to significant price rises over the last year, and it is hard to see much easing of that demand over the next year. In the longer run, plans for building more new houses will see supply rise to meet that demand and price growth should ease.
This won’t be immediate, however, and in my opinion it remains a great time to invest in residential property.
If you’re looking at buying a new home or an investment property this year, please let us assist you in arranging the mortgage. There are numerous lenders in the marketplace now, and we’re able to arrange significant interest rate benefits, contributions towards your legal fees etc.
Reserve Bank Lending Restrictions
In 2013, in an attempt to reign in property prices, the Reserve Bank put restrictions on lenders which removed the ability to borrow more than 80% of purchase price. Those restrictions have now been lifted for new construction, so purchasers are now able to borrow 90% on new houses whether for own occupation or rental investment.
In addition, the banks are now looking at 90% lending for selected clients, so if you or someone you know is not buying because they think they won’t get loan approval, please get in touch with us, we may be able to assist.
The Reserve Bank reviewed the Official Cash Rate last week, and made no adjustment – however they did warn that the rate was likely to rise in March. It seems inevitable that rates will rise through this year, probably by 1 to 1.5%. It might now be prudent to consider fixing the interest rates on all or part of your mortgage – the banks are still offering good discounts against their standard rates, so if you’d like us to look at fixing your rates, just email me with your account number and I’ll get you a quote.
A reminder that we offer Insurance services, so if you would like us to review your existing insurances, please email me. New Zealanders are historically under-insured, and therefore at risk financially if ill-health should occur. Please don’t leave it and assume “it can’t happen to me” – insurance is a relatively inexpensive way of protecting your families future.
Even if you have existing policies, they may not be appropriate for your current circumstances. We’re happy to review your levels of cover and make suggestions.
Many of us have trouble keeping a lid on our spending. If you would like some assistance in arranging your financial affairs to ensure you don’t overspend, please let me know, we’re happy to offer advice in this area.