As we all start settling into the groove of things for 2015, many of you will be casting an eye to the Reserve Bank of New Zealand and its looming cash rate decision. Property investment in NZ rises and falls to a degree on this announcement, as it influences the interest rates set by banks. They do not have to follow it to the letter, but it generally serves as a guiding light for lenders.
So, what have speculators from around the country anticipated would happen?
Moving on up
Currency commentator Roger Kerr wrote about his predictions for the coming year back in December, for interest.co.nz. While these mostly fixated on the global money market, he did anticipate interest rates rising from 3.5 per cent to 4 per cent through the year, to help the local dollar stay strong against the Australian and US currencies.
This is nothing to be alarmed about, though. By tailoring a great property investment strategy with your expert team of advisers, you should be able to see yourself through many such changes.
Staying steady
Ahead of the cash rate decision on the 29th, the New Zealand Institute of Economic Research (NZIER) polled their shadow board for what they think should happen. An overwhelming majority thought that keeping the cash rate at 3.5 per cent was the best course of action. Even though inflation has dropped, NZIER Principal Economist Dr Kirdan Lees stated that it was not yet time to undo the increases to interest rates that occurred through 2014.
Going down
There were members of the NZIER shadow board, however, who thought a decrease was prudent. Cameron Bagrie, Chief Economist with ANZ said the cash rate is actually higher than it needs to be. So clearly, there are many different reasons for changing the rate one way or the other. As an investor, it is important to get good property investment advice and move with the market to get some great capital gains.
Here's to your financial independence!
Daniel Carney
Authorised Financial Adviser / Investment Property Expert