The Christmas holidays are over and we are back in action. 2016 is shaping up to be a fantastic year in a number of ways. The summer is predicted to be the hottest on record. With December being a fizzer weather wise, it leaves the remainder of summer to roll out the really hot weather. Let’s hope we have a brilliant last few months of summer with never ending hot cloudless days. For real estate it means busy weekends and for some reason people feel fine weather is a good time to be looking at property. We recently heard about inflation being at its lowest (not seen since 1999), which some may see as a bad sign, but to me it means a further lowering of the OCR rate, bringing interest rates to an all-time low. So although capital gains may be slower than previous markets due to a lack of inflation pressure, low interest rates mean your dollar can go further. Let me put it another way – if you are a first home buyer go and ask your mum and dad what their first mortgage interest rates was, I guarantee they will say late teens or early 20% – compare that to today, yes the value for money is not so great but long term interest rates in the early 4% is just stunning. What is really interesting is that gross yields have not reflected the changes in mortgage rates yet – they will, but at this very time you can still find investments returning 7% and you can borrow the money at 4.5% that is a great return for simply buying a house and you have the potential to make a capital gain as well! I am excited about the future and you should be too! |
James Twiss
Licensed Business Owner of Harcourts Four Seasons Realty 2017 Ltd Greg Roberts
Licensed Business Owner of Harcourts Four Seasons Realty 2017 Ltd Archives
September 2020
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