I attended the monthly TPIA (Tauranga Property Investors Association) Event last night - we were fortunate to have Matthew Holdich, Head of Mortgages for ANZ.
There were a few key messages that came out - namely that, there is no sign of any imminent turn around in the downward trend of the OCR (i.e. the belief is that there are at least another 2 cuts to come) and secondly, that there was a general belief that there was some LVR relief coming to borrowers - Investors in particular - in the months to come.
However, Matthew did comment on the ongoing disagreement between the main banks and the Reserve Bank on the level of Equity that should be held by the banks (so that’s probably 3 key messages….). This has a way to play out yet. However, if the RBNZ stand their ground, predictions are of an impact that would see a 0.5% to 1% increase in interest rates (it varies between lenders and market commentators).
However, there seems to be no confidence or certainty in any predictions or commentary from banks or economic commentators - albeit UBS are predicting the largest impacts.
Coupled with the uncertainty, there are very different views between the Banks and RBNZ on what a reasonable level of reserves would be. Given this, and slow (if any) wage growth in the general economy (and hence, limited increase in available spending/affordability), no-one seems to be able to make a confident prediction or statement on this topic - so I guess we will all just have to hang in for the ride…
Irrespective, at all of the industry events/sessions I have attended lately, the general consensus is for a moderate average increase in values (around 3-5%) across the country, ongoing OCR cuts, continued strong employment conditions and immigration and the potential easing of LVR restrictions.
Make an appointment to chat about your portfolio structure and which lenders are starting to distinguish between (and enforce) Investment and Owner Occupied Rates.
Because, remember, not all lenders are the same!
Have a great Tuesday.