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Hi Guys
After reading this it makes those positive cash flow rental investments look more and more attractive:
I hope that all those with negatively geared properties have deep pockets.
Regards
After reading this it makes those positive cash flow rental investments look more and more attractive:
Home loan rates head for 8pc
FRIDAY , 30 APRIL 2004
By JAMES WEIR
Home loan interest rates look set to rise to 8 per cent by the middle of the year, slowing the housing market, with fixed-term rates also on the way up, according to economists.
Reserve Bank governor Alan Bollard pushed up the official cash interest rate from 5.25 per cent to 5.5 per cent yesterday, and gave a strong hint that rates would rise again soon, possibly to 5.75 per cent in June. The latest rate rise is expected to feed through to floating mortgage rates, about 7.5 per cent at present at most of the big banks.
On a $100,000 loan at 7.5 per cent, the fortnightly repayments are about $340. If floating rates go up to 8 per cent, the repayments will rise to $355 a fortnight.
Bank of New Zealand chief economist Tony Alexander said rates were "under review" but the Reserve Bank intended bank lending rates to rise. Longer-term fixed rates were also rising and could be up 1 per cent in the year ahead, he said.
If mortgage interest rates rose to 8 per cent by the middle of the year, it would hurt some borrowers "at the margin", Mr Alexander said.
Overall, house prices could fall about 5 per cent by the middle of next year, in "a relatively small correction", affected by slowing migration and falling numbers of foreign language students.
House prices rose almost 21 per cent in the year to March, according to recent Real Estate Institute figures.
Real Estate Institute president Graeme Woodley said he did not think a small rise in floating rates to about 7.75 per cent would have much impact on the housing market. "But if we get over 8 per cent for the floating rate, then it would certainly have an effect," he said.
The housing market had already "quietened" a little with slowing migration.
Mr Alexander said there had also been a drop in foreign language students coming to New Zealand, which made the Auckland central city apartment market especially vulnerable.
Westpac Bank chief economist Brendan O'Donovan said the last general house price fall followed the 1998 Asian financial crisis, when interest rates went above 10 per cent. That was not expected to happen this time.
People who owned their own homes might see prices drift sideways for a few years, he said.
But Mr O'Donovan agreed the Auckland apartment sector was susceptible to a "significant" price fall.
FRIDAY , 30 APRIL 2004
By JAMES WEIR
Home loan interest rates look set to rise to 8 per cent by the middle of the year, slowing the housing market, with fixed-term rates also on the way up, according to economists.
Reserve Bank governor Alan Bollard pushed up the official cash interest rate from 5.25 per cent to 5.5 per cent yesterday, and gave a strong hint that rates would rise again soon, possibly to 5.75 per cent in June. The latest rate rise is expected to feed through to floating mortgage rates, about 7.5 per cent at present at most of the big banks.
On a $100,000 loan at 7.5 per cent, the fortnightly repayments are about $340. If floating rates go up to 8 per cent, the repayments will rise to $355 a fortnight.
Bank of New Zealand chief economist Tony Alexander said rates were "under review" but the Reserve Bank intended bank lending rates to rise. Longer-term fixed rates were also rising and could be up 1 per cent in the year ahead, he said.
If mortgage interest rates rose to 8 per cent by the middle of the year, it would hurt some borrowers "at the margin", Mr Alexander said.
Overall, house prices could fall about 5 per cent by the middle of next year, in "a relatively small correction", affected by slowing migration and falling numbers of foreign language students.
House prices rose almost 21 per cent in the year to March, according to recent Real Estate Institute figures.
Real Estate Institute president Graeme Woodley said he did not think a small rise in floating rates to about 7.75 per cent would have much impact on the housing market. "But if we get over 8 per cent for the floating rate, then it would certainly have an effect," he said.
The housing market had already "quietened" a little with slowing migration.
Mr Alexander said there had also been a drop in foreign language students coming to New Zealand, which made the Auckland central city apartment market especially vulnerable.
Westpac Bank chief economist Brendan O'Donovan said the last general house price fall followed the 1998 Asian financial crisis, when interest rates went above 10 per cent. That was not expected to happen this time.
People who owned their own homes might see prices drift sideways for a few years, he said.
But Mr O'Donovan agreed the Auckland apartment sector was susceptible to a "significant" price fall.
Regards
), double digit interest rates for deposits next year. Its nearly past time to decide if you are in for the long haul (it can feel like a very long haul at times waiting for the next cycle) or out at the peak and maybe get some good interest on your cash or cut back debt, and come back in later when things cool off. I've heard there is some foreigners interested in property in T............. 
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