Sharechat Logo

Short-term fixing still on the cards

Wednesday 22nd October 2008

Text too small?
Property investors should fix their mortgages for six months to a year, as interest rates are likely to fall quite quickly, according to ANZ's Property Focus.

The bank's property gauges show affordability is improving though prices are still high relative to people's incomes. The cost and indebtedness measure remained high, according to the October report. Consents and house sales were treading water, with building applications dwindling while vendors have unrealistic price expectations.

"Mortgage rates are heading lower," ANZ Bank economists said. "Keep the duration of borrowing short, around six months."

Reserve Bank Governor Alan Bollard is expected to slash the official cash rate by 100 basis points tomorrow, the biggest cut since the measure was introduced in March 1999 to lift an economy that has been mired in recession this year. ANZ Bank predicts the OCR will continue to fall in 2009, to reach 4.75%.

Home-building approvals fell to a 22-year low in August, according to government figures on September 30.

Fletcher Building, the biggest construction company on the NZX 50 Index, fell 4.7% to NZ$6.15 today. Fletcher has declined 45% this year.

By Jonathan Underhill

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

7th December 2021 Morning Report
Sky Network Television Limited (NZX: SKY) Transformation accelerates - Sky raises FY22 guidance
PGG Wrightson Limited (NZX: PGW) FY22 Operating EBITDA forecast to better last year
Vulcan Steel Limited (NZX: VSL) Trading Update & Earnings Upgrade
6th December 2021 Morning Report
Synlait Milk Limited (NZX: SML) Partnership to enhance soil health; test regen ag practices
Property for Industry Limited (NZX: PFI) Strong Valuation Outcome, Penrose Acquisition
3rd December 2021 Morning Report
Fonterra Shareholders Fund (NZX: FSF) Fonterra provides Milk Price, earnings and Q1 update
Kiwi Property Group Limited (NZX: KPG) Signs Sale and Purchase Agreement with IKEA