The chances of an interest rate rise in the foreseeable future look less and less likely . Dr Bollard must be chewing the carpet as all his warnings and finger waging are for naught.
Property buyers can remain confident in the knowledge that they can invest without any interest rate shocks spoiling the fun . I have had some emails from investors who think the world is coming to an end and should they bail out or what? I tell them that in my life time I have seen far worse crises, and if you doubt my words ask your grand parents what they have lived through.
Investors must harden up and get some steel down their back bones. We will muddle through as usual – I have no doubt about that.
Posted in News September 29, 2011 – 05:13pm, Gareth Vaughan
Stuff.co.nz
Kiwibank drops its two and three year home loan interest rates to bring them in line with those offered by ASB and Westpac
Kiwibank is trimming 10 basis points off its two-year fixed-term home loan interest rate and 20 basis points off its three-year fixed rate, bringing them into line with the two and three year rates advertised by ASB and Westpac.
The rate changes, effective from Friday (September 30), bring Kiwibank’s two-year rate down to 6.3% and three-year rate down to 6.70%.
The state owned bank has left all its other home loan rates, including its 5.65% variable, or floating, rate unchanged.
The Kiwibank cuts bring its three year rate in line with ASB and Westpac as the lowest three-year rate advertised by banks, but the 6.30% two-year rate offered by Kiwibank, ASB, and Westpac, is slightly higher than TSB’s 6.28%.
Published 22 September 2011
Bob Dey Report
12 commercial properties in Bayleys’ Total Property winter portfolio were sold at & before Wednesday’s Auckland auction.
The sales included 2 of the 3 Lincoln North shopping centre outlets on offer (another was withdrawn before the auction), producing yields of 5.8% & 6.5%.
Bidding was variable during the auction – the usual second-half lull was punctuated by firm bidding on 2 Glen Innes & East Tamaki properties and a royal contest for the Happy Days buffet restaurant property.
Auction results:
Queen St Valley
10 High St, 541m2 1920s’ 7-level retail & office building on 106m2 site, 126m2 of ground-floor retail space &d associated basement storage plus 5 83m²office levels, fully leased with multiple tenancies including Overland Footwear, Carats Jewellers and a mix of office tenants, building returning net $153,524/year, sold by a Hong Kong family trust to a US investor for $2.7 million (Millie Liang)
115 Queen St, unit C, large cafe up Swanson St walkway, opposite new supermarket going into BNZ Tower, passed in at $1.325 million (Quinn Ngo & James Chan)
239 Queen St, unit 1A, Mid-City shop with well established fast-food tenant, fixed annual rental growth, passed in with no bid (Quinn Ngo & James Chan)
CBD – Victoria Quarter
51 Hobson St, unit C, 133m² superette on 9-year lease in 2-storey restaurant & retail building, returning $46,900 + gst/year, passed in at $660,000 (Tony Chaudhary)
Isthmus east
Glen Innes, 248 Taniwha St, 117m2 Blockbuster video store on new 2-year lease with 4×2-year rights of renewal, on 151m2 site in Glen Innes town centre, opposite the train station, returning $23,500/year, sold for $275,000 at an 8.5% yield (Paul Dixon & Mike Peterson)
Newmarket, 8 Remuera Rd, corner Broadway, freehold stand-alone retail property returning $75,000 + gst/year, withdrawn from auction (James Chan)
Isthmus west
Kingsland, 390 New North Rd, withdrawn from auction (Alan Haydock & Cameron Melhuish)
Mt Roskill, 30-32 Carr Rd, 3950m2 on 2 titles with a 2114m2 factory & warehouse plus 3-bedroom house on development site, owned by family engineering company for 62 years, sold with vacant possession for $1.55 million (Dave Stanley, Peta Laery, Tony Chaudhary & Chris Upright)
North
Dargaville, 76 Victoria St, 477m² building on 423m² site, substantially refurbished & reconfigured for Westpac NZ Ltd’s first branch in the town, Westpac as tenant on new 9-year lease from March 2011, sold for $1.055 million at a 6.7% yield (Andrew & Ross Blomfield)
North-east
Albany, 7 William Pickering Drive, unit A, withdrawn from auction (Stephen Scott & Robert Platt)
Birkenhead, 200 Hinemoa St, 4 unit titles, property A (show with one-bedroom flat above) returning $21,000/year + gst + opex, passed in at $970,000, property B (2 shops, a 2-bedroom flat & vacant garage storage) returning $52,285/year + gst + opex, passed in at $700,000 (Christina Heaven & Claire Rawkins)
North-west
Henderson, Lincoln North Shopping Centre, 192 Universal Drive, unit 1C, Moda Kitchen tenancy, returning net $43,960 + gst/year, passed in at $750,000 (Cameron Melhuish & James Chan)
Earlier Lincoln North story, 8 July 2009: 22 out of 22 shops go at auction
Henderson, Lincoln North Shopping Centre, 192 Universal Drive, unit 1D & auxiliary unit 10, 9-year lease from March 2010, returning net $67,459 + gst/year, sold for $1.03 million at a 6.5% yield (Cameron Melhuish & James Chan)
Henderson, Lincoln North Shopping Centre, 192 Universal Drive, unit 1E, 90m²corner unit with 9-year lease from April 2010 to a St Pierre’s Sushi of Japan outlet, returning net $43,960 + gst/year, sold for $760,000 at a 5.8% yield (Cameron Melhuish & James Chan)
Henderson, Lincoln North Shopping Centre, 192 Universal Drive, unit A3D, withdrawn from auction (James Chan & Cameron Melhuish)
New Lynn, 3055 Great North Rd, 1809m² building on 830m² site, La Porchetta restaurant on long-term ground-floor lease, 3 office floors above, withdrawn from auction (John O’Brien & Chris Upright)
New Lynn, 3115 Great North Rd, unit 1, retail unit occupied by the Bike Barn, 4-year lease from 2010, sold prior for $1.076 million at a 7.9% yield (Tony Chaudhary & John O’Brien)
South
East Tamaki, 22-24 Harris Rd, units 2B & 2C, 2 adjoining industrial units, 440m2 & 266m2, food processor Leonards Superior Small Goods exercised the first of 2 5-year rights of renewal late last year, net rent $66,100 + gst/year, sold for $675,000 at a 9.8% yield (Shane Snijder, John Bolton & Tony Chaudhary)
East Tamaki, 290 Ti Rakau Drive, fruit & vegetable shop returning $114,900 + gst/year, passed in at $1.35 million (Nicolas Ching)
Manukau, 586 Great South Rd, unit 1, roadfront site with TAB licence, 8-year lease from July 2010 returning $93,000 + gst/year, no bid (Gordon Gibson)
Manukau, 898A Great South Rd, 1999m2 site, 707m2 Happy Days buffet restaurant with 18 gaming machines (581m2 restaurant & bar, 37m2 casino area, 89m2 of first-floor office space), 70 on-site parking spaces, 15-year lease from March 2011, sold for $1.935 million at an 8% yield (Shane Snijder & John Bolton)
Papatoetoe, 91 Great South Rd, 1113m² caryard site with 410m2 of showroom & office, 3-year lease to Pearce Brothers until March 2012 with one 3-year right of renewal, sold prior for $881,000 at a 9.5% yield (Rob Farmer & Tony Chaudhary)
Totara Heights, 46 Eugenia Rise, 584m2 L-shaped mixed-use building in a corner of the 1575m2 site containing 4 shops (one vacant) plus 4-bedroom flat, returning $77,000/year, sold for $970,000 at a 7.9% yield (Tony Chaudhary)
Published 22 September 201112 commercial properties in Bayleys’ Total Property winter portfolio were sold at & before Wednesday’s Auckland auction.
The sales included 2 of the 3 Lincoln North shopping centre outlets on offer (another was withdrawn before the auction), producing yields of 5.8% & 6.5%.
Bidding was variable during the auction – the usual second-half lull was punctuated by firm bidding on 2 Glen Innes & East Tamaki properties and a royal contest for the Happy Days buffet restaurant property.
Auction results:
Queen St Valley
10 High St, 541m2 1920s’ 7-level retail & office building on 106m2 site, 126m2 of ground-floor retail space &d associated basement storage plus 5 83m²office levels, fully leased with multiple tenancies including Overland Footwear, Carats Jewellers and a mix of office tenants, building returning net $153,524/year, sold by a Hong Kong family trust to a US investor for $2.7 million (Millie Liang)
115 Queen St, unit C, large cafe up Swanson St walkway, opposite new supermarket going into BNZ Tower, passed in at $1.325 million (Quinn Ngo & James Chan)
239 Queen St, unit 1A, Mid-City shop with well established fast-food tenant, fixed annual rental growth, passed in with no bid (Quinn Ngo & James Chan)
CBD – Victoria Quarter
51 Hobson St, unit C, 133m² superette on 9-year lease in 2-storey restaurant & retail building, returning $46,900 + gst/year, passed in at $660,000 (Tony Chaudhary)
Isthmus east
Glen Innes, 248 Taniwha St, 117m2 Blockbuster video store on new 2-year lease with 4×2-year rights of renewal, on 151m2 site in Glen Innes town centre, opposite the train station, returning $23,500/year, sold for $275,000 at an 8.5% yield (Paul Dixon & Mike Peterson)
Newmarket, 8 Remuera Rd, corner Broadway, freehold stand-alone retail property returning $75,000 + gst/year, withdrawn from auction (James Chan)
Isthmus west
Kingsland, 390 New North Rd, withdrawn from auction (Alan Haydock & Cameron Melhuish)
Mt Roskill, 30-32 Carr Rd, 3950m2 on 2 titles with a 2114m2 factory & warehouse plus 3-bedroom house on development site, owned by family engineering company for 62 years, sold with vacant possession for $1.55 million (Dave Stanley, Peta Laery, Tony Chaudhary & Chris Upright)
North
Dargaville, 76 Victoria St, 477m² building on 423m² site, substantially refurbished & reconfigured for Westpac NZ Ltd’s first branch in the town, Westpac as tenant on new 9-year lease from March 2011, sold for $1.055 million at a 6.7% yield (Andrew & Ross Blomfield)
North-east
Albany, 7 William Pickering Drive, unit A, withdrawn from auction (Stephen Scott & Robert Platt)
Birkenhead, 200 Hinemoa St, 4 unit titles, property A (show with one-bedroom flat above) returning $21,000/year + gst + opex, passed in at $970,000, property B (2 shops, a 2-bedroom flat & vacant garage storage) returning $52,285/year + gst + opex, passed in at $700,000 (Christina Heaven & Claire Rawkins)
North-west
Henderson, Lincoln North Shopping Centre, 192 Universal Drive, unit 1C, Moda Kitchen tenancy, returning net $43,960 + gst/year, passed in at $750,000 (Cameron Melhuish & James Chan)
Earlier Lincoln North story, 8 July 2009: 22 out of 22 shops go at auction
Henderson, Lincoln North Shopping Centre, 192 Universal Drive, unit 1D & auxiliary unit 10, 9-year lease from March 2010, returning net $67,459 + gst/year, sold for $1.03 million at a 6.5% yield (Cameron Melhuish & James Chan)
Henderson, Lincoln North Shopping Centre, 192 Universal Drive, unit 1E, 90m²corner unit with 9-year lease from April 2010 to a St Pierre’s Sushi of Japan outlet, returning net $43,960 + gst/year, sold for $760,000 at a 5.8% yield (Cameron Melhuish & James Chan)
Henderson, Lincoln North Shopping Centre, 192 Universal Drive, unit A3D, withdrawn from auction (James Chan & Cameron Melhuish)
New Lynn, 3055 Great North Rd, 1809m² building on 830m² site, La Porchetta restaurant on long-term ground-floor lease, 3 office floors above, withdrawn from auction (John O’Brien & Chris Upright)
New Lynn, 3115 Great North Rd, unit 1, retail unit occupied by the Bike Barn, 4-year lease from 2010, sold prior for $1.076 million at a 7.9% yield (Tony Chaudhary & John O’Brien)
South
East Tamaki, 22-24 Harris Rd, units 2B & 2C, 2 adjoining industrial units, 440m2 & 266m2, food processor Leonards Superior Small Goods exercised the first of 2 5-year rights of renewal late last year, net rent $66,100 + gst/year, sold for $675,000 at a 9.8% yield (Shane Snijder, John Bolton & Tony Chaudhary)
East Tamaki, 290 Ti Rakau Drive, fruit & vegetable shop returning $114,900 + gst/year, passed in at $1.35 million (Nicolas Ching)
Manukau, 586 Great South Rd, unit 1, roadfront site with TAB licence, 8-year lease from July 2010 returning $93,000 + gst/year, no bid (Gordon Gibson)
Manukau, 898A Great South Rd, 1999m2 site, 707m2 Happy Days buffet restaurant with 18 gaming machines (581m2 restaurant & bar, 37m2 casino area, 89m2 of first-floor office space), 70 on-site parking spaces, 15-year lease from March 2011, sold for $1.935 million at an 8% yield (Shane Snijder & John Bolton)
Papatoetoe, 91 Great South Rd, 1113m² caryard site with 410m2 of showroom & office, 3-year lease to Pearce Brothers until March 2012 with one 3-year right of renewal, sold prior for $881,000 at a 9.5% yield (Rob Farmer & Tony Chaudhary)
Totara Heights, 46 Eugenia Rise, 584m2 L-shaped mixed-use building in a corner of the 1575m2 site containing 4 shops (one vacant) plus 4-bedroom flat, returning $77,000/year, sold for $970,000 at a 7.9% yield (Tony Chaudhary)
If this prediction comes true, Auckland alone will need to build 15,000 homes each year from now own (allowing for demolition etc) . As the countries total building is not much more, it can only mean higher priced and higher rents . And I am sure that Len Brown is not talking about expensive homes either . You have been warned.
“Auckland’s new plan to create the “world’s most liveable city” has been unveiled this morning by Mayor Len Brown.
It comes as the Auckland Council faces scrutiny over transport and crowd management failures during the Rugby World Cup’s opening night.
In a speech and documents rich in buzzwords, Brown added two new ones: “kid city” and “Auckland Unleashed”.
The plan to move Auckland from the world’s 13th most-liveable city to the first – supplanting Melbourne – envisions a city that will have a million more people in the next 30 years and will need 400,000
http://www.stuff.co.nz/national/politics/5653392/Its-Aucklands-time-to-transform
“Mortgages – to fix or float
ELOISE GIBSON
19/09/2011
It’s the eternal question for homeowners: to fix or not to fix?
You make the decision, regret or rejoice, and then two years or so later you have to make it again.
If you’re in a quandary, no wonder. Seasoned economist Tony Alexander says this may be the most difficult environment for predicting interest rates that New Zealand has ever seen.
So what’s a homeowner to do?
Are you an optimist or a pessimist?
There’s no easy answer. Economists themselves can’t agree on when mortgage interest rates will rise, or whether – if you jump into a fixed rate now – you’ll be better or worse off in two or three years.
First of all, if you’ve already fixed, don’t panic. Even though most economists are now saying you’d be better off floating, they also say fixed rates are unlikely to go much lower.
Translation: if you fixed pretty recently, you probably didn’t get a bad deal – just missed out on a few months paying the lower variable mortgage rate.
Chances are – like me – you were spooked by economists predicting an imminent rate hike that upped and receded thanks to wobbles in Europe and America.
Now the Reserve Bank has pushed predictions of an official cash rate hike into early next year , making those of us who rushed feel a little bit silly.
At least we weren’t alone.
ANZ, ASB, BNZ, Westpac, and Kiwibank all had more people than usual switching to fixed rates during the past two months.
For a heady three weeks, sixty per cent of BNZ customers coming off fixed loans chose to re-fix, compared with the usual 10 per cent.
By contrast most Kiwis are content to ride out the ups and downs – BNZ and ASB both say more than 70 per cent of their lending is floating.
If you haven’t fixed, should you?
BusinessDay asked three bank chief economists whether fixed or floating was a better bet right now. Two went for floating and one – just marginally – for fixed.
ANZ’s Cameron Bagrie and BNZ’s Tony Alexander backed the floating rate over the next two years.
“I don’t think there’s a big mad rush to jump into those fixed rates,” said Bagrie.
“To be expecting floating rates to be to moving up aggressively pretty quickly, you’ve got to have an expectation that the global economy is going to be relatively robust. I think that’s a very heroic assumption at the moment.”
Tony Alexander agreed: “The situation offshore is deteriorating all the time.”
Only ASB’s Nick Tuffley said fixing for two or three years would work out fractionally cheaper than floating.
“But it is very much at the margins and it wouldn’t take much to steer things a little bit either way,” he added.
Tuffley said the pre-GFC situation of pricey short term borrowing vs. cheaper long term rates had been turned on its head.
“So there’s going to be this trade-off…how much am I prepared to pay for the certainty a fixed rate gets me?”
Certainty, after all, is one thing you can’t get from a floating rate.
“The decision between fixing vs. floating is not just about cashflow,” says Bagrie. “A lot of people want the certainty a fixed rates offers.”
So if sleep is important to you, you might just opt for peace of mind.
“There’s nothing guaranteed, the floating rate could go up a long way,” says Bagrie.
How much does the OCR matter?
It’s tempting to think of the official cash rate as the sole predictor of interest rates.
But a one or two percentage point rise in the cash rate doesn’t necessarily mean mortgage rates will rise by the same amount, says Bagrie.
For example, if global economic risks reduced enough for the Reserve Bank to hike the cash rate, the same factors could make borrowing overseas cheaper – reducing the overall effect on interest rates, says Bagrie.
It works both ways, says Tuffley.
“If we do get into a really messy situation with the European debt crisis and that spills over to the European banks…it’s always possible that banks’ costs (of borrowing) do get lifted high by that.
“But if that was the case, the Reserve Bank might just opt to not lift the cash rate as much (because the inflation environment wouldn’t warrant it.).”
Sorted’s mortgage repayment calculator is a good way to work out if you can afford an interest hike.
And if you want to give your heart a flutter, check out the historic mortgage rates compiled by the Reserve Bank. A casual 15 per cent interest, anyone? Yep, it happened in 1990.
If you fix, when?
If you want to fix, economists say you probably have some time up your sleeve.
But don’t muck around too long. “There’s pressure (on fixed rates) to move up,” says Bagrie.
Fixed rates tend to move around more often than floating, says Tuffley, so it’s not a good idea to wait until after the floating rate has moved.
Right now, fixed rates are on the low side compared with what economists are predicting will actually happen to the cost of money next year.
“One important thing to bear in mind is that market doesn’t have much built in the way of interest rate increases going forward,” says Tuffley.
“If you wait too long and market starts to re-price, you may miss the boat on getting a fairly low fixed rate.”
Alexander says fixed rates are unlikely to go lower before rising.But: “If you fix right now you’re sacrificing a low floating rate to do that, so the real questions how long can one safely stay floating before moving into fixed?”
He still says floaters have time on their sides. “If you stay floating you’re not facing the prospect of the fixed rate suddenly jumping up on you.”
But he admits waiting is always a gamble.
As for how long to fix for, all of the economists said two year and three year rates were looking much more attractive than longer terms. “I wouldn’t go longer than two years,” says Bagrie.
Hedge your bets
Remember all those post-GFC headlines about people trying to break their fixed loans?
If you fix and floating rates fall dramatically, it can be costly to get out.
Banks have complicated formulas for deciding how much to charge you, but basically they do their best to recover the difference between what you would have paid by staying on the fixed rate and what they will get by you breaking the term.
With floating there’s no penalty if you want to pay the whole amount early.
Alexander says, if he was going to fix, he would hedge his bets by leaving some of the loan floating.”
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