Header Ad Module

Collapse

Announcement

Collapse
No announcement yet.

Interest Rates

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • BK, they can still say, oh the RBNZ is making us turn you into a commercial customer, so your account type will be changing to commercial and your bank fees will change as a result.

    But yeah, hard to see how they can change the interest rate.
    Squadly dinky do!

    Comment


    • Originally posted by Bluekiwi View Post
      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 !!!
      They certainly seem to be.

      Comment


      • National and Reserve Bank are making a huge mistake doing what they are doing, they are barking up the wrong tree and have lost the plot and cannot see the big picture.
        I dont know how many phrases and cliche's I need to make my point, so I will just explain what I am seeing.

        1. I am now seeing 90% of bidders in auctions being chinese.

        2. I have stopped seeing families with wife's crying in corners after being out bid at auctions with tears rolling down mum's face and young child saying "Yahoo is the house now ours".
        Mum then between sobs, tells son that they didnt win the auction, that the man over there bidding on someone else's part has won the auction.
        "Why cant we have someone bid for us" says the kid.
        These famalies are just not there to be outbid at the moment.
        That is the affect of the LVR rules.

        3. I see Chinese people buying multiple properties at auctions. I know of one who has 17 properties in Auckland and lives half his time here and half in Singapore.

        Now I have bought enough rental properties, I dont need any more.
        I am happy to see huge inflows of immigration and swags of chinese money escaping its homeland and coming here and pushing up NZ asset prices.
        Doest worry me in the least.

        But it does irk me slight the RBNZ / National have no idea what they are doing.

        Okay so you stop famalies and NZ investors buying property in NZ.
        You still have 30,000 people arriving in NZ, you still have China money and China investors living here who love property investing, good on them.
        Who do you think will buy up all of Auckland.

        Of course the LVR rules have sent a surge of panic through the market overall, and prices have been flattened Nov through to about end Jan.
        But make no mistake, the tide is still rising and Auckland prices have a lot more to go, albiet at a slower rate.

        Comment


        • Originally posted by Bluekiwi View Post
          BNZ and ANZ back it up in there reports
          Is there not a conflict of interest where you are sourcing your information from ?


          Westpac has treated the 6th rental as commercial for decades

          Comment


          • BK - I agree with everything you've said. I think we're going through a period of change to a situation that is accepted as normal in other countries. Your average income earners simply will not be able to purchase in a central Auckland suburb. It's the same in London.

            I don't have any experience of Chinese investors though. China is likely to see a slowdown at some point. Will be interesting to see what happens then. Globalisation and global investing sure is screwing up the West though!
            You can find me at: Energise Web Design

            Comment


            • Originally posted by tulips View Post
              Westpac has treated the 6th rental as commercial for decades
              Not for me they don't.
              Still have a personal banker not a commercial one and pay residential interest rates.

              Comment


              • Originally posted by Perry View Post
                Oh, goodie - it it's really a business can
                we have the depreciation back, please?
                (like other businesses!)
                Originally posted by elguapo View Post
                You still have depreciation don't you?
                Yes - but it can't be claimed on buildings,
                for reasons of parliamentary expedience.
                Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

                Comment


                • Originally posted by Perry View Post
                  Yes - but it can't be claimed on buildings,
                  for reasons of parliamentary expedience.
                  can't be claimed for any buildings - residential or commercial (unless they have an expected life less than 50 yrs etc).
                  So making 5 or more houses a small business doesn't change anything there - or produce any anomoly.

                  Comment


                  • Here are the consultation documents.

                    Consultation Paper: Review of bank capital adequacy requirements for housing loans and internal models processes
                    http://www.rbnz.govt.nz/regulation_a...cy/5463896.pdf


                    "If bank has recourse to more than four dwellings owned by the borrower then the loan cannot be classified as a residential mortgage loan."


                    Summary of submissions and final policy decisions on the Consultation Paper - Review of bank capital adequacy requirements for housing loans (stage two)
                    http://www.rbnz.govt.nz/regulation_a...cy/5570960.pdf


                    "The paper also proposed that if a bank had recourse to four or more dwellings owned by the borrower, then the loan could no longer be classified as a residential mortgage loan. "


                    "A few argued that drawing the boundary at a specific number would encourage customers to split their borrowing across more than one lender, potentially limiting a bank’s ability to assess the customer’s credit risk and increasing overall risk, and disadvantage borrowers with considerable other income which makes repayment of the mortgage not dependent on the rental income those properties generate."


                    "As a result of the feedback received on this part of the consultation, the Reserve Bank has decided to amend the wording of the definition to address many of the potential issues raised by respondents. Marketability will be added to the boundary definition of whether a loan is a residential mortgage loan or a farm or business lending, there is greater emphasis on the income source used to service the loan, and the purpose component of the definition will be amended.

                    However, we are retaining a count based element in the determination of the boundary between residential mortgage lending and commercial property investor lending, although this will also include an income test. The count threshold, however, has been increased to five properties and greater clarity will be provided as regards the treatment of multiple dwellings within a property. The Reserve Bank is of the view that anyone with more than five properties, regardless of whatever other income sources or revenue streams may exist, should be treated as running a small business. To avoid further confusion, this would mean treating those loans as corporate property loans."


                    BS2A: Capital Adequacy Framework (Standardised Approach) - applies to the 4 big banks.
                    http://www.rbnz.govt.nz/regulation_a...ok/3174397.pdf


                    On Page 47 in the "Residential mortgage loans not past due"
                    LVR does not exceed 80%, Risk Weight % = 35


                    Page 46 has a table of corporate of "Risk weights for long-term claims on corporates", and all but rating grade 1 are higher than 35%.

                    Comment


                    • Symptom-chasing surely
                      takes many forms.

                      I wonder what the ratio
                      of failed loans by number
                      is, between commercial
                      and residential loans?

                      Same for by value.
                      Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

                      Comment


                      • Raising the price of the product - debt - is one way of limiting its attractiveness.
                        The vast majority of people would prefer moves such as this especially if it helps limit the number of OCR rises coming.

                        Raising banks' capital requirements is happening world wide......finally.
                        Long overdue.
                        Last edited by speights boy; 24-02-2014, 04:30 PM.

                        Comment


                        • Wow this will really push rents up eventually.
                          You can find me at: Energise Web Design

                          Comment


                          • Originally posted by drelly View Post
                            Do you think it will actually have much impact though? Over 95% of investors have less than 5 properties anyway and those with 5 or more are probably not pushing the limits debt-wise after the GFC.
                            Why the change of mind ?
                            Originally posted by drelly View Post
                            Wow this will really push rents up eventually.

                            Comment


                            • Originally posted by speights boy View Post
                              Why the change of mind ?
                              Sounds contradictory doesn't it! Well, I don't think that it will impact current investors that much... but... it might raise the barrier to growth and perhaps the perception of all these barriers combined will reduce the number of investors considering property. That's got to push rents up eventually? Death by 1000 cuts? LOL
                              You can find me at: Energise Web Design

                              Comment


                              • Overseas investors more used to 3% yields back home, will just come in with cash and take up the slack.
                                So......nothing to worry about is there ?

                                Comment

                                Working...
                                X