What a difference a year makes…

Written By Kim Manunui

With interest rates being on the up and up along with the OCR, incremental 0.25% and 0.05% rises on their own are not significant … but 12 in 20 months is!

So now we’re faced with an Official Cash Rate at 5.5% with interest rates hovering around 1.5% above that with some banks offering varying special rates but a far cry from the record lows we’ve had in recent years.

 So, the new norm is taking us back to the heady days of high inflation and higher interest rates, will it ever come back down again?

YES is the answer to that, according to Adrian Orr, the Governor of the Reserve Bank who’s pulled the handbrake on, stating he’s confident there will be no more increases … so when?

Fourth quarter of 2024 is the expectation from economists so we’re sitting it out locking in rates over the shorter period.

HOWEVER, house prices have settled back from what were very heady levels recently so good buying is to be had if you’re of the mind and have the capacity for a bit more interest in the interim to take the expected gains in the longer term. 

For example … on a 25 year loan 0.25% makes a difference of around $15 per month per $100k so on a $500k mortgage it’s $75 mth. A whole 1% difference is $300 mth, 2% $600 mth and so on. So, 1% more over a 24 mth period is $7,200 where the house is likely to increase from here by $100k+ once the economic stuff plays its part like immigration increasing and inflation decreasing bringing the OCR back down and interest rates with it.

Naturally, there’s no crystal ball and the above is just a rudimentary example, looking at it on a case by case basis will determine what’s right for you taking into account your overall position and where you want to go from here.

So give me a call or drop me a line and we can take a look and explore the possibilities.

The above commentary is a summation only and not to be construed as or acted on without seeking professional financial advice relative to your personal circumstances, the author bears no responsibility for persons acting on it in any way.

Kim Manunui

Hi, I’m Kim and I work with a great team to help individuals, as well as small and not so small businesses get their message, product and services to the world using digital media and creating wonderful websites that don’t cost the earth.

I was born in Canada, and grew up around Vancouver and the mountains of British Columbia. My love of pristine environments led me to New Zealand and eventually to the mountains, lakes and rivers of the central North Island which is home. My family’s heritage is here, and it’s from here that Korio traverses the planet.

The digital world is never static and neither are we.

And I say ‘we’ because I work with an awesome group of talented people who I gather together as required to complete a project.  Whatever your business, not-for-profit or individual needs are we gather the best team to get the job done.

Collaboratively we are creative, share sustainable values and work hard for great outcomes because that’s the buzz of satisfaction that drives us.

If you have an audience and market to reach, we can make that happen. Creative design, words that work and smart behind the scenes stuff that cuts through the online noise. We’ll design your website and then build it. We’ll manage the content as well as all your hosting needs. We can handle your online advertising so you get noticed,
and we’ll manage your social media presence so you get the clicks, likes and engagement to grow your business. All within the budget you set, because none of this needs to cost the earth.  And the job doesn’t stop when your website goes live. We are your virtual business partner.

https://www.korio.co.nz
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