Interest Rates

[speights boy]

Much impact ?...Probably not.
However:

The RBNZ isn't concerned about whatever the % of investors is; but more the number and size of mortgages in different categories;
It is probably more about income dependency as opposed to other metrics;
The first policy step taken often sets the framework to make subsequent changes easier.

[Wayne]

I have more than 5 and am trying to get my head around what it will mean.
In short it will be higher interest rates.
How much is the Q.
0.5% has been suggested (in the article?).
Breaking the properties into 4 house chunks is not a nice thought either - pretty cross-collateralised

[drelly]

The first policy step taken often sets the framework to make subsequent changes easier.

Good point.

In short it will be higher interest rates. How much is the Q. 0.5% has been suggested (in the article?).

I thought commercial rates were about 2% higher?

[Wayne]

I thought commercial rates were about 2% higher?

I was looking at this (from the article)
Bolton said commercial borrowers could expect to pay roughly 50 basis points of extra interest, as well as face greater scrutiny and sometimes higher fees.

[absoluke]

every other business simply passes the added expenses to the consumer - i wonder how accepted it will be in property?

[elguapo]

every other business simply passes the added expenses to the consumer - i wonder how accepted it will be in property?

Only if they can, most of the time they cannot.

[Davo36]

Which raises the question, what are rents doing at the moment? Different things in different areas of course, but what are people seeing in Auckland?

Are they going up? Staying flat?

[speights boy]

every other business simply passes the added expenses to the consumer - i wonder how accepted it will be in property?

Many (most ?) will not be affected by this change.

[Wayne]

every other business simply passes the added expenses to the consumer - i wonder how accepted it will be in property?

in some industries every business is affected the same so have the same desire to pass on costs.
In this business, as someone has already said, all are not equal.
I can't increase my rents because my costs are higher because I have 5 properties whereas someone else pays less interest because they have 3.

[Bluekiwi]

Just to throw the act amongst the pigeons further... I've heard rumours from a broker friend that the Reserve Bank is considering forcing banks to charge commercial rates when lending is over a certain number of properties... oh yay.

They wont be changing my rates until 2017 / 2018 / 2019.
That gives me 3 to 5 years to move my rentals around a few other entities.

But the game is certainly changing, and its about time people woke up to the fact that National is anti property investing, they have done more against property investors in this term than all the labour governments through the history of time !!!

[speights boy]

They wont be changing my rates until 2017 / 2018 / 2019.

Have your banks confirmed that ?

[Davo36]

Yep BK, you're right.

Of course National will say the RBNZ is independent and they have nothing to do with the policies they come up with...

At which point anyone with half a brain would start laughing.

[Bluekiwi]

Have your banks confirmed that ?

I fixed everything

[drelly]

But the game is certainly changing, and its about time people woke up to the fact that National is anti property investing, they have done more against property investors in this term than all the labour governments through the history of time !!!

I think they're just walking a line to stay popular. A lot of the things they're doing are more showy than they are effective. Removal of depreciation did sting though.

[speights boy]

I fixed everything

Your residential loans were fixed not commercial loans I assume.

Now, I have no idea and am just being cynical and extra cautious.
I would be making sure there is nothing in the mortgage T & Cs that this policy can affect.