The Reserve Bank kept the Official Cash Rate (OCR) unchanged at its last announcement on the 30th January but is widely expected to increase the rate at its next meeting on the 13th March.
Whilst economists and most commentators are talking up rates I’m going to provide a different perspective.
A lot has been happening the past few weeks that has impacts for property and investors. There is so much going on, it is hard to bridge the gap between macro and micro factors affecting property.
Let's start with wholesale interest rates, technically referred to as swap rates. Swap rates have been increasing since December.
With wholesale interest rates tracking as low as they are, and ongoing ructions in Europe, there is plenty of keen discussion on interest rates.
For years now I've ranted and raved about mortgage rates. One of the reoccurring themes is that mortgage rates are strongly influenced by household behaviour - "fear."
I write this article a day after the consumer price index (CPI) inflation rate came out at 5.3% and already you can hear the beat of the interest rate tom-toms.
2011 is shaping up to be an interesting year. In my opinion mortgage rates don't need to increase and the Auckland property market (at least for first home buyers) seems to be growing in confidence.
The "Jaws of Death" is how accountants affectionately describe declining revenue and increasing costs. You would never guess that this is the reality facing our banks.
On Campbell Live tonight they were searching for an animal to be our oracle for the Rugby World Cup. My vote is for Pikelet the pig. That got me thinking.
My personal view is the official cash rate (OCR) should not increase.
Will property prices fall in New Zealand? Is now a good time to buy? Is property a good investment and where should I buy? My overarching view of property is that it is a great investment because of long-term population growth, desirability and scarcity.