The Reserve Bank today (26 April 2012) left the Official Cash Rate (OCR) unchanged at 2.5 percent.

Interest rates are at lows not seen since the early 1970s. Rents, particularly in the major cities, are high and are continuing to rise. In many cases, it costs now roughly the same to own a property as it does to rent it. If your income is relatively secure, this is now the time to consider owning your own property. Mortgage rates are low, but if you are worried about them rising and making it harder to meet your repayments, it is now easy to fix them and protect yourself. Many renters complain about the quality of their accommodation. By owning, you can steadily improve your property and this may be reflected, over time, in an increase to the capital values.

Have you been thinking about Expanding your Investment Property Portfolio?

Despite an increasing number of people expecting house prices to rise, overall confidence in the housing market fell during the July quarter, according to the latest ASB Housing Confidence Survey.

Over the past few weeks a number of commentators have been suggesting that the Official Cash Rate (OCR) may rise as early as September and most certainly by December this year. The events of the last two weeks have certainly put a stop to any likelihood that rates will rise in the near term. Even before the recent events, we believe it was premature to talk about increasing rates. Our economy is really still in recession despite the official figures. Unemployment is still around 6%, youth unemployment is increasing at alarming rates and retailers are finding it a particularly difficult trading environment. Exporters are suffering with the high exchange rates. There is a strong argument that we should cut our rates further. Our OCR, at 2.5%, is still well above the USA, at a quarter of a percent, the UK at half a percent and the Eurozone at 1.5%. We are lower than Australia at 4.75% but they have a booming mining sector and we do not.

Some recent softening on home loan criteria is good news for buyers