APIA Blog

RSS Feed

OCR predictions - should they be taken seriously?

Thursday, September 12, 2019
 

This week's question comes from Pat (paraphrased):  

The Internet is riddled with OCR predictions. Every commentator sounds just as learned and trustworthy as the next. How seriously should property investors take these predictions?

 

To answer this question, we've turned to Ryan Smuts from Kris Pedersen Mortgages & Insurance. Ryan, take it away!

'While the interest rate market plays an important part in an investor’s financing strategy, it should never be the only factor for consideration. Having a clear understanding of your personal position within the context of the interest rate market is just as crucial to the overall success of your portfolio.

Regularly reviewing your interest rate position and hedging your bets to take advantage of potential drops in the future are matters of good practice. That said, they do not always deliver the best results. Take for example: Say you are looking forward to May 2020. You can either fix now at 3.55% or hold out for an even lower rate in 9 months by stomaching a +1.5% floating rate in the meantime.  If you do the maths, you will likely come to the conclusion that the future rate would have to drop fairly significantly for you to break even. Sometimes we see property investors focusing too much on the rate they are going to potentially get in the future at the expense of paying for a much higher rate now. Interest rates should always be compared on a rolling basis.'

Do you have any tenancy related questions? Write to us at admin@apia.org.nz or hit us up on our social channels here and here

Recent Posts


Tags

Sponsored post tax auckland council management Guest blog RBNZ insurance boarding house lvr covid-19 investor auckland asbestos parry v inglis trespass landlord inspection first home buying legal ask an expert property management market rent anz bond Tribunal case study principal and interest building subdivision Must know ring-fencing How to trademe minor dwelling winz initio equity finance LIM productivity Editor's Choice Q&A RTAA 2019 tenancy services interest only development relationship income investment strategy tenancy issues ventilation Market report interest rates scotney williams worksafe housing affordability positive cash flow education smoke alarm property cycle ocr personal growth market capital gain Question and answer rta reform return buyer's agent skill shortage ird Gluckman Property (Relationships) Act television heating election 2017 damage financial advisers act housing bubble mortgage fixed-term tenancy property maintenance twg report water bill TCIT rental wof tenant maintenance rent arrears cash-flow letting cat bond form debt enforcement rta HHGA shower dome Must knows CCC Jeff Bezos Landlording Investment tip bad tenant structure sale and purchase privacy holiday house renovation HHS p lab rental market rent gluckman report Standards New Zealand wealth creation beginner investor rent increase meth contamination unitary plan letting fee short-term rental airbnb off the plan insulation speculator CoreLogic meth reserve bank house prices Level 4 Holler watercare DTI property value sublease business property cgt robert kiyosaki sale and purchas tenancy tribunal partners HSWA negotiation recycling equity banking clnz heater wins extractor fan trust warm up new zealand advice Investor story data security warren buffett buying rules nzpif Kris Pedersen Mortgages and Insurance government termination buying

Archive

Introducing Our Partners
Principal Sponsor - Kris Pedersen Mortgages & Insurance logo Gold Sponsor - Barfoot & Thompson logo Gold Sponsor - CoreLogic logo Property Apprentice logo Keith Hay Homes logo The Insulation Warehouse logo The Renovation Team logo The New Zealand Property Investors' Federation logo
09 360 2376
info@apia.org.nz

The Tenancy Practice Service and TPS Credit Control work closely with the Auckland Property Investors' Association. Our vision of bringing helpful resources, documents and high quality services to Auckland Property Investors and Property Managers is shared by APIA, so its a partnership that works well. 

The Auckland Property Investors' Association is a great organisation for those who want access to advice and information from a range of industry experts and partners. 



Mathieu Holt- Managing Director, The Tenancy Practice Service & TPS Credit Control
Through the Association I found the channels and methods to fund the purchase of property I never dreamed about. Grant Brown

All round it has been one of those things Neil and I felt was really worthwhile belonging to. We have learned so much it has just built our confidence in what we are doing.

Janice Bieleski
I read two articles in the monthly magazine that saved me over $5,000. That is my membership fee for the next 26 years and I am sure I will learn a whole lot more! John Duncan
Fantastic organisation. The networking opportunities are brilliant and provide us with information and opportunities that cannot be obtained anywhere else. We learn something new at every meeting and we've been in this game for nearly 20 years. Pauline and Gyanen Kumar

I find the information obtained from various APIA meetings very useful in guiding my own property investment and rental management.  I also enjoy the networking opportunities with like-minded investors.  I am inspired by other investors’ success and find the more experiences and knowledge that I share with others, the more confident I become.  

Thanks to all APIA event organizers and administrators for your brilliant work. 

Stella Shao

I like talking to people and learning from their experience because it gives me the confidence to invest well. I think it is a knowledge thing. I now know I am doing things the right way.

Stephen Weatherall

My APIA membership has become a total success.

Every time I attend a monthly or regional meeting I come away with so many useful and positive tips that have added value to my property investments and management.

Not only that, the website is a great place for practical advice and useful information. It has now evolved into an important resource for my business.

Talk about value for money! The discounts I have been getting at Bunnings when I present my APIA membership card have more than paid for my annual subscription!

Tim Duffett, Plan A Investments Limited