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  1. #1
    Join Date
    Aug 2003
    Posts
    7,758

    Default Reserve Bank Macro-Prudential Tools

    Matthew Gilligan of GRA has written a post on the new RBNZ rules for lending to property investors with 5 or more properties - on the top menu bar - click the link to 'property blogs' to access it.

    …if you're a glass half full type of person you'll see the opportunity in this proposed change.

    cheers,

    Donna
    PropertyTalk Blog - property articles - About PropertyTalk

    BusinessBlogs - the best business articles are found here



  2. #2
    Join Date
    May 2008
    Location
    Torbay, Auckland
    Posts
    3,935

    Default

    I was going to get around to starting a thread on this.
    Its just another stake into the hearts of property investors.
    Instigated by the National government who have given the Reserve Bank open slather to target the purported villan and bogey man of the new zealand economy, the hated property investor.
    Responsible for all the ill's in new zealand, the world and maybe perhaps even the universe.
    Soon to be blamed for global warming I am predicting.

    I hate to say it.
    But I am almost wishing back the labour government, almost.

    Stakes through the heart of property investors:
    1. Depreciation.
    2. LVR Restrictions.
    3. Exorbitant rates.
    4. Exorbitant insurance premiums.
    5. LAQC's.
    6. Association rules.
    7. GST changes

    I just cant help but feel the knife is well and truly out for property investors.
    And that it really is a complete facade to say they are looking after the stability of the financial market.

    I just cant see how increasing the costs to property investors accross ALL area's of business.
    Is going to improve stability, when the only real outcome is going to be some investors going to the wall creating bad debts for banks and destabilising the financial markets.

  3. #3
    Join Date
    Apr 2004
    Location
    Auckland
    Posts
    1,962

    Default

    JK is on retainer from the "productive" financial sector.
    Can't have people doing investment themselves and not paying those exorbitant management fees.

    Very strange that tenants never figure out that they are the suckers who cop it in the end.
    The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

  4. #4

    Default

    Quote Originally Posted by Bluekiwi View Post
    Is going to improve stability, when the only real outcome is going to be some investors going to the wall creating bad debts for banks and destabilising the financial markets.
    Investors going to the wall creating bad debts for banks ONLY happens if their debt level is too high.

  5. #5
    Join Date
    May 2008
    Location
    Torbay, Auckland
    Posts
    3,935

    Default

    Maybe a good place for people to update what they hear about these rules.
    This is what I have heard.

    1. Date the rules come into action: June 30.

    2. Interest rate premium: I have heard .5 and I have heard between .5 and 1.5

    3. How many properties: I have heard 5 under one entity, I have heard up to 4 with one bank is fine.

    4. Rules decided: I have heard RBNZ are still fiddling with rules and will advise (no consulation with proprety associations prior)

  6. #6
    Join Date
    May 2008
    Location
    Torbay, Auckland
    Posts
    3,935

    Default

    Quote Originally Posted by speights boy View Post
    Investors going to the wall creating bad debts for banks ONLY happens if their debt level is too high.
    I have 5 years or more to get my affairs in order, as I am fixed out to 2018 / 2019.

    But what about investors who wanted to stay floating, maybe they have had insurance problems / loss of rent down christchurch, leaky building issue that has hit them, maybe they had a left field event hit them up here with council.
    They are floating and didnt fix to pay minimum interest bills now.

    They are prepared and have planned to pay lower rates now around 5% and go up to say 8.5% when floating rates hit that high.
    That equation could now be 6.5% and 10%.

  7. #7

    Default

    Quote Originally Posted by Bluekiwi View Post
    But what about investors who wanted to stay floating, maybe they have had insurance problems / loss of rent down christchurch, leaky building issue that has hit them, maybe they had a left field event hit them up here with council.
    They are floating and didnt fix to pay minimum interest bills now.

    They are prepared and have planned to pay lower rates now around 5% and go up to say 8.5% when floating rates hit that high.
    That equation could now be 6.5% and 10%.
    They sell.
    Their paper wealth is transferred to someone else.
    Happens every day in every market.

    It's a business, if they chose not to hedge they run the risk.
    Their decision.
    Last edited by speights boy; 27-02-2014 at 03:33 PM.

  8. #8
    Join Date
    Apr 2004
    Location
    Auckland
    Posts
    1,962

    Default

    Supply of rental properties fall - rents go up.
    Nice!
    The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

  9. #9

    Default

    Or...
    A renter buys it as their PPOR, or another investor buys it as at distressed sale discount.
    The house doesn't disappear when it's sold ya know !

  10. #10
    Join Date
    Apr 2004
    Location
    Auckland
    Posts
    1,962

    Default

    Minimum wage is rising = inflation = more rent for me :-) = more tax for me :-( = ...
    Oh I'm getting dizzy.
    The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.


 

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