Property

Investors opt for safety of bricks and mortar

Low bank interest rates have seen an influx of people switching their money from bank deposits to rental properties.

Friday, January 23rd 2009

Barry Joblin of The Professionals Glenbarry Whangarei says as interest rates come down, he has noticed more people starting to put their money into property investments to get the 5% to 6% interest return, plus potential for capital gains.

“It only started in December 2008. But with the banks going down there were about eight or nine people in our office who had traditionally put their money in the bank and they were looking to buy property.”

Joblin adds that Whangarei represents good value for investors and is particularly popular with people of retirement age leaving Auckland for the lifestyle.

In Hamilton, Dennis Coombes, a director of Ray White’s Online Realty has seen a similar trend.

“We’re finding the older people of 60-plus have around $200,000 and they’re scared to leave it in the bank. When you consider the interest rate, less tax and the rate of inflation, you actually have nothing left. People don’t trust the sharemarket or any global markets so there’s a big pull for senior citizens to put their money into real estate. They’re buying a regular income from the rental. That’s happening a lot here,” he says.

In Hawke’s Bay, Mike Hughes of Bayleys says there is sentiment towards bricks and mortar rather than paper money.

But he knows of two people who have transferred their money from the bank to property to keep it safe. One of those is a farmer who has landbanked his money and the other has bought another residential home for himself.

“They’ve seen the depressed market with pressure on price and think property is better than the bank.”

Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

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