Comments on: Rates down, down, down – market up? http://www.landlords.co.nz/blog/rates-down-down-down-market-up A blog for New Zealand landlords and property investors Thu, 09 Feb 2012 07:09:47 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Dave http://www.landlords.co.nz/blog/rates-down-down-down-market-up/comment-page-1#comment-664 Dave Tue, 06 Jan 2009 09:16:37 +0000 http://www.landlords.co.nz/blog/?p=107#comment-664 There was some comment from hopeful investors/landlords in a recent NZ Herald articlebased on interest rate relief and rent rises may allow property to reach 'positive' cash flow. I believe the negatives to this argumentare demographic such as negative migration flows. Thus while landlords may wish to push rents, there will also be those who will lower rents as interest rates allow, plus the mortgagee sales etc. One determining factor that transcends all others is the long term affordability of home ownership. Deposit hurdles are a temporary thing and will reduce family upgrades and then ultimately the 'baby boomer' generation who will wish to release equity are also at the whim of major demographics as they will need a willing and liquid buyer. There was some comment from hopeful investors/landlords in a recent NZ Herald articlebased on interest rate relief and rent rises may allow property to reach ‘positive’ cash flow.
I believe the negatives to this argumentare demographic such as negative migration flows.
Thus while landlords may wish to push rents, there will also be those who will lower rents as interest rates allow, plus the mortgagee sales etc.
One determining factor that transcends all others is the long term affordability of home ownership. Deposit hurdles are a temporary thing and will reduce family upgrades and then ultimately the ‘baby boomer’ generation who will wish to release equity are also at the whim of major demographics as they will need a willing and liquid buyer.

]]> By: Pete B http://www.landlords.co.nz/blog/rates-down-down-down-market-up/comment-page-1#comment-604 Pete B Thu, 04 Dec 2008 02:54:22 +0000 http://www.landlords.co.nz/blog/?p=107#comment-604 Lower mortgage rates can help people buy housing, but only if they feel secure enough in their jobs, and confident enough in their financial future to take the plunge. Given that consumers hold plenty of debt especially housing debt, fearful of layoffs, and waiting for housing prices to hit bottom, it's unlikely that they'll react to this interest rate cut with a spending spree. Lower mortgage rates can help people buy housing, but only if they feel secure enough in their jobs, and confident enough in their financial future to take the plunge.

Given that consumers hold plenty of debt especially housing debt, fearful of layoffs, and waiting for housing prices to hit bottom, it’s unlikely that they’ll react to this interest rate cut with a spending spree.

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