Monday, 27 October 2008
Property investors are predicting the end for finance companies.
Hundreds gathered in Rotorua at the weekend for the Property Investors' Federation annual conference as global markets continued their rocky ride.
Federation president Martin Evans said investors were impressed by news the Westpac and ANZ banks had taken up a multibillion-dollar Reserve Bank offer to purchase residential mortgage-backed securities if the banks ran short of money.
Other banks were expected to take up the Reserve Bank offer.
Economists at the conference predicted banks would be the last lenders left standing as credit conditions tightened. "Money won't be so easy to get you will have to put a better case to the bank to get your money," Evans said.
"And they are saying there won't be any non-bank lenders soon, it will be only the banks that will be lending money."
Investors at the conference said they wanted to have more control over their investments, rather than buying in to property ventures run by middle-men.
"A few people got burnt by that," Evans said.
"People fairly realistically realise that there is going to be a downturn in the economy and we're going to go through bad times. But the bankers were saying New Zealand will fare well."
Economists at the conference predicted the official cash rate would fall to 4.75 per cent, but Evans was sceptical.
"I don't know how they can predict that. Last month they were saying petrol would never drop below $2 again, weren't they?" he said.
Reserve Bank Governor Alan Bollard last week cut the official cash rate by 100 basis points to 6.5%.
Massey University banking expert David Tripe said prediction that banks would soon be the only lenders might not be borne out.
"One of the things about the (Reserve Bank) deposit guarantee scheme is that it actually chucks a lifeline at a number of other participants in the market," he said.
Hundreds gathered in Rotorua at the weekend for the Property Investors' Federation annual conference as global markets continued their rocky ride.
Federation president Martin Evans said investors were impressed by news the Westpac and ANZ banks had taken up a multibillion-dollar Reserve Bank offer to purchase residential mortgage-backed securities if the banks ran short of money.
Other banks were expected to take up the Reserve Bank offer.
Economists at the conference predicted banks would be the last lenders left standing as credit conditions tightened. "Money won't be so easy to get you will have to put a better case to the bank to get your money," Evans said.
"And they are saying there won't be any non-bank lenders soon, it will be only the banks that will be lending money."
Investors at the conference said they wanted to have more control over their investments, rather than buying in to property ventures run by middle-men.
"A few people got burnt by that," Evans said.
"People fairly realistically realise that there is going to be a downturn in the economy and we're going to go through bad times. But the bankers were saying New Zealand will fare well."
Economists at the conference predicted the official cash rate would fall to 4.75 per cent, but Evans was sceptical.
"I don't know how they can predict that. Last month they were saying petrol would never drop below $2 again, weren't they?" he said.
Reserve Bank Governor Alan Bollard last week cut the official cash rate by 100 basis points to 6.5%.
Massey University banking expert David Tripe said prediction that banks would soon be the only lenders might not be borne out.
"One of the things about the (Reserve Bank) deposit guarantee scheme is that it actually chucks a lifeline at a number of other participants in the market," he said.
Comment