What will you do if Interest rates increases today

[acmc86]

http://www.interest.co.nz/property/64796/bnz-chief-economist-tony-alexander-sees-floating-mortgage-rates-hitting-85-within-nex

What will you do if interest rates goes up by 8.5% today and you are on floating rate?

i might stack up more cash, get ready to buy more houses from people who can't meets their financial obligation...

[Raftcomm]

i might stack up more cash, get ready to buy more houses from people who can't meets their financial obligation...

If i had a larger portfolio than i do now which contained high and low yielding IPs, i would be kicking myself to be honest. With interest rates up (in your example), it would be harder to offload low yielding IPs since there are less buyers in the market, which may mean having to lower the selling price expectation.

Personally i think now is a really good time to streamline the portfolio to offload those low yielding ones, maintain a healthy cashflow level so that when interest rates do go up and the macro prudential tools are in place, i would be in a better position to purchase those bargains.

I often read media articles with a grain of salt but im starting to wonder if we are already seeing the signs of the property market plateau at its peak. (Referring to this article).

[Glizzle]

All my buys are done on expectation of interest rates being 9%, so atm all my property's are heavy cf+, the low interest rates to me has been a time to cut the debt not really make money.

[Jumpin]

Yes but TA is looking at an extreme scenario. Interest rates of 8.5% in the forseeable future would stall the economy so badly that they would have to reduce back to 5% pretty smartly.

The main worry is in the over-heated housing market . Best scenario is if some foreign building company sets up in Auckland and Christchurch and starts building affordable housing using Non-leaky designs and materials.

The way it is going is that Chch will have to be re-built in 10 yrs time to replace all the dodgy crap that is shooting up now.

[Orkibi]

its not realistic so don't sweat it.

[smilverpeech]

With all my rentals at roughly 9% gross yield I may survive for a period of time. But wait, if the NZ economy is so good that RBNZ has to raise interest rate to 8.5% to fight inflation then i suppose return on my rentals would be much higher than current rate

[drelly]

With all my rentals at roughly 9% gross yield I may survive for a period of time. But wait, if the NZ economy is so good that RBNZ has to raise interest rate to 8.5% to fight inflation then i suppose return on my rentals would be much higher than current rate

Return on debt levels is more important

[muppet]

Japan's Nikkei index is in a bear market. Stock markets across the world are sagging. Australia's indices are tumbling faster than most.
But you needn't worry about the world's stock markets. The central banks will lower interest rates if anything bad happens. If they can't go any lower, money printing will save the day. Stocks can only go up from here.