As 2010 limps to a close I’m sure many of you will join with me in letting out a collective ‘thank god for that!’ We’ve had some highlights this year but overall I have to admit it has been a tough one for anyone involved in the property business. Economically the country has been under the pump not to mention the earthquake in Christchurch and the loss of life at the Pike River mine. Those two events certainly made us sit up and appreciate what we’ve got and that our loved ones are safe and well. Economically speaking if you thought it was sluggish out there, you’re right.

Having said that I do think the well worn line of ‘growing stronger in difficult times’ rings true in Godzone with the economy coming into a fairly good position for a solid and gradual recovery over the next 2 -3 years. The country will get a massive kick from the RWC and billions will flow into Christchurch as rebuilding gets going in earnest too. Lets not lose sight of the fact that we produce a lot of ’stuff’ that the world needs  (esp Asia) and 2011 should be an improvement from this year!

Where to for interest rates?

March 2009 represented the low point for interest rates, in fact they were the lowest the country has ever seen. They’ve crept up since then but have really just been sputtering along, a bit like a toddler trying to walk for the first time. While we might get a bit more of that make no mistake — interest rates will begin to go up as the economy and people’s confidence picks up — thats the way it works.

I am in the group that says interest rates may be flat till about March/April and then begin to go up, steadily but not dramatically. 2 year money is well priced at the moment and although it’s higher than the floating rate I think it’ll look like good value in a years time as the floating rate moves on up. But if you don’t want to lock in all of your mortgage splitting it half floating half fixed for 2 years is a decent ploy as well.

Will 2011 be a good time to buy a house?

Yep. Absolutely. I say that because there are heaps to choose from right now and I think it will be that way all year, lending criteria has loosened up a little and interest rates (while on the up) won’t be off the planet. Property values have dropped about 5%-10% across the board since 2008 and look reasonably stable now which is good news for buyers too. Plus if you’re a first home buyer and have been in Kiwisaver for 3+ years the government will help boost your deposit.  Pretty benign conditions overall in 2011 for home buyers I’d say.

Thanks

For reading, for your questions and feedback but especially for your custom and referrals this year. David and I look forward to doing it again with you in 2011. Have a good one, Campbell Hastie

 

About Campbell Hastie

Cam is one half of Auckland based mortgage brokers, The Go 2 Guys.

He makes a living by sharing what he knows about mortgages with people, arranging mortgages for people and then insuring people.

He doesn't claim to know everything about mortgages himself which is why he teamed up with David Mercer — hence the ‘2’ in Go 2 Guys.

He writes posts regularly on his blog and has been told he has an ability to share his knowledge in a simple and sometimes memorable way.

Feel free to comment and ask any questions. Contact Campbell Hastie m: 027 697 7789.

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