WHERE TO WITH MORTGAGE INTEREST RATES?
At the recent First National conference in Wellington we heard from ANZ’s Khoon Goh, who carefully explained why the world is in the mess it is, where things are going and what we New Zealanders might have to expect in the future.
I won’t confuse you with the intimate details but the nub of it all goes like this:
Firstly, NZ is doing well compared with many nations, with a slow return to normality under way.
Secondly, because of the cost of money to banks off shore and changes in the Reserve Bank’s requirements around NZ banks using more and more NZ-sourced money for mortgages, the “new normal” will see:
o floating rate loans at lower rates than fixed, probably permanently it seems,
o a demand for higher deposits on property purchases
o and get this, we could be right back to the real old days with a limit on the number of loans available in any one week from any one bank branch.
It was also obvious that the Reserve Bank has constructed this position and there is really no way out. This will indeed become the “new normal.”
Filed under: REAL ESTATE | Tagged: Real Estate