What are interest rates going to do?

[hele27]

I have heard they are going to hit 3% in the next 6mths, so am thinking of breaking my fixed term and floating until they hit the 3%

[Hound]

My belief is we'll be doing well to get around 4%. But happy to take what we get.

[Orkibi]

They are going down and then go up. No one can predict... What are you locked on now?

[rocket]

I am locked at 5.45 for 5, started few months ago. ..Should I break. But they say that the long term rates wouldn't change

[Orkibi]

What is the net yield on the property you locked at 5.45% ?
And what round be the brake fee Rocket ?

[brokerman]

OCR has a way to go downward, not convinced fixed will drop that much more. Break fees getting pretty heavy from recent experience so do the maths first!

[speights boy]

Also, will be interesting to see if the banks are told to apply a separate "Auckland investors rate"

[Wayne]

I have heard they are going to hit 3% in the next 6mths, so am thinking of breaking my fixed term and floating until they hit the 3%

How solid was what you heard?

[brokerman]

Also, will be interesting to see if the banks are told to apply a separate "Auckland investors rate"

Interesting indeed, I think not. The LVR restrictions are already in place and having the effect of people buying in Tauranga, Hamilton, Wellsford and even Whangarei. If rate differentials come into play then this would accelerate this process.

[speights boy]

If rate differentials come into play then this would accelerate this process.

So what ?
Reduces demand in AKL and increases demand elsewhere.
The RBNZ concerns are mainly AKL housing exposure to our banks.

[brokerman]

Agreed in part. The overall demand for Auckland far exceeds anything local Investors do so regardless of anything the RB does in this regard Auckland will continue to rocket. Auckland needs 25,000 dwellings now to satisfy current demand, not going to happen!

[speights boy]

Auckland needs 25,000 dwellings now to satisfy current demand, not going to happen!

Which is why demand measures will be implemented sooner rather than later.

[brokerman]

Which is why demand measures will be implemented sooner rather than later.

Agreed however the only really effective one is to raise rates by at least 2% and that ain't going to happen. Restricting overseas owners doesn't work because the numbers are relatively small. CGT isn't going to work (look at Sydney) and no Government in my lifetime will introduce it anyway. LVR restrictions merely cause a ripple effect and don't address the core issue which is supply. You cannot stop people wanting to live and work in Auckland.

[Maccachic]

Think a yearly foreign owner tax would help level the playing field for local owners - no idea how to implement.

[elguapo]

Some interesting thoughts on it here;

https://www.squirrel.co.nz/rushed-auckland-70-lvr-policy-who-pays/