With long term mortgage rates on the increase and the short term remaining pretty steady around the high 5's, maybe this is signalling that house prices and mortgage rates are as fair as they are going to get. For the first time in a long time investors are able to get positive returns on their rental investment properties. This hasn't been the case in New Zealand for some 30 odd years.
What does all this mean? Well......... it certainly provides serious cash flow for those people who were wise enough to float or time their fixed rate to come off around now. Whilst the repayments are significantly lower than this time a year ago, with the Banks current stance on 20% deposits as a minimum these days, it is still not that affordable for first home buyers to enter the market as most don’t have $40k in their pocket for the deposit!!
Thus making the current market a property investors dream time! Yes, the mortgage will be self funding from the rents, Yes, there will be a housing shortage due to lesser consents issued due to global economy restraints, Yes, this will create demand by tenants and thus increase rents and make purchasing a rental property a very viable option right now. A long with this we have house prices at very low levels as well. What else could an investor ask for??!!
If you are considering entering the rental property market, make sure you have a chat to us first. As with anything significant purchase, you want to dot the i’s and cross the t’s and get some very professional, impartial advice to set it up right first time!!! That includes the potential tax benefits etc.
