Dear Resident
With the NZ economy preforming even better than the predicted 3.5 - 4.0% growth (some even suggest 6% this year) the reserve bank is clearly worried about future inflation which could cause havoc to the living standards of all New Zealanders.
As a result we have see the second rise of 0.25% in the official cash rate (OCR). While everyone with a mortgage hates rises in the OCR (which means the mortgage lending rates increase), it is essential that inflation is controlled.
I personally can remember mortgage rates of 23%! The price of everything you brought seemed to go up just about every week. It would be a tragedy for New Zealand if anything like this happened again. It took the country many, many years and a lot of pain and unemployment to get out of the mess. Lets just hope the good times continue to roll and the reserve bank governor does not over do it and slow the growth in our economy which means plentiful employment and rising living standards.
What will happen to the house prices in Auckland? I strongly believe they will continue to rise. There is a big shortage of houses which can not be filled quickly and there is the strongest net migration to New Zealand for a decade.
All the OCR actions will achieve I believe is slow the price rises to a more acceptable level (to the reserve bank that is) to prevent rapid inflation. One further prediction this year - the LVR (loan to value ratio) will be relaxed again allowing 90% borrowing and bringing back more first home buyers into the market.
Best wishes,
John
| JOHN GOODRUM | ||
| thelegendofthewest@gmail.com P:09 838 8895 or 021 945 140 | ||
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