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Yes, will be interesting to see how it plays out .
If rates rise and there is no change to current LVR rules; then there will be a lot more discussions on tax issues around property investors and FHBs.
Of that I have little doubt.
Well, it's only one year later,
but how are the predictions
looking, now?
Like i thought back a year ago when many were pushing to fix long term 7%+ ...rates aren't going anywhere fast even here we would be far to out of wack with our trading partners ....we can start offering 6%+ deposit rates while other much bigger economy's offer only 2% etc ...our dollar would just get far to strong ...
So over the last couple of years I've only been fixing for the short term round 5% ....
Personal I don't see high rates for some time ... now with JAPAN the third biggest economy in recession ...more Q.E easy money polices to keep the markets afloat ....
My est prediction on rates here for 2015 ....we will see 1yr fixed stay well below 6% with even a 50/50 chance we could see the same rates drop back under 5% ....
2016 much of the same ... but likely we will see the affects of the under pricing of commodities (below mining etc costs) kick some inflation into the system on price spikes ...
2017 doing well to get short term rates below 6% ...2018 -2019 we get peak rates for the period 7-8% max ....longer term 2019-25 rates come back downwards on the size of debt/incomes constricting growth back to round the 6% levels .....the days of 9-10% are long gone for many years IMHO
A couple has won a rare court victory against a bank that forced the mortgagee sale of their dream home for $1 million beneath its valuation.The scathing judgment provides a glimmer of hope for Kiwis fighting mortgagee sales in the aftermath of the global financial crisis. Ross and Candace Robertsons house at Hatfields Beach north of Auckland was sold by tender for just $1.2m, well short of its official valuation of $2.2m.
I know that house. Looked at it myself when it was up for sale. We're talking 2012 numbers here, and while $1.2m might seem a little low in today's numbers, it was about right (imo), possibly a little low, at the time (although it was a mortgagee sale!). I would question the $2.2m valuation. That seems very high, even by today's values. The house was nice, but it wasn't completed, the land wasn't overly use-able unless you liked a few sheep or goats, and it was clifftop alright. Very close to the cliff. So close in fact, that if you had young kids I would consider it dangerous for them to run around outside on the north/eastern side of the house. One trip and over they'd go. It needed a decent fence, but of course that would spoil the view.
The comments are more interesting. Worth reading on-line just for them.
Typical media stuff. I found this in the comments interesting I don't know what these people Robertson's are moaning about as on 16/5/13 the house was sold for $720,000-00. I did wonder as I was reading the article if the place had sold since.
The Reserve Bank predicts floating mortgage rates will rise to 7 or 8 per cent over the next two or three years and says buyers who entered the market in recent years with small deposits will be disproportionately affected.
Quite scary, when you think about - just how wrong the RBNZ was / is. Makes one feel so sanguine about their fiscal policy management abilities - if any.
Mortgage rates can't increase much. Because if they do, the country will be stuffed.
So they won't be allowed to.
Simple as that.
Apart from very short term rates it is out of our (NZ) control!
Mostly the same applies (can't afford to be increased) in other countries also so we may be OK - but we don't control any of this.
yes be an uproar to the masses of debt laden NZers if we had 7-8% rates ....would be a national crisis as it would in most of the world .... record bankruptcies / forced sales ..
Very simply the growth of the last decades has truly be driven by debt not Capital ...and to keep this going the rate has been pushed downwards
along with loose lending practices ...
IMHO 7-8% will not be seen this decade and maybe not even the next (in the short term loans etc )
Apart from very short term rates it is out of our (NZ) control!
Mostly the same applies (can't afford to be increased) in other countries also so we may be OK - but we don't control any of this.
RBNZ only set the very short term rate (floating and maybe 6 month) - the cash rate.
Long rates are set by whomever the banks have to borrow from (1-5 years) - generally overseas.
RBNZ only set the very short term rate (floating and maybe 6 month) - the cash rate.
Long rates are set by whomever the banks have to borrow from (1-5 years) - generally overseas.
Nope not tongue in cheek at all.
I don't believe for a second it's got anything to do with offshore borrowing rates.
"In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood: the principal way is through commercial banks making loans. Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money."
So this has nothing to do with offshore rates.
Just look what happened when the GFC hit. The RBNZ lowered rates from 8.5% to 2.5% and mortgages got cheaper overnight. They didn't have to wait for new cheaper borrowing opportunities to open up or anything.
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