Hello April!

April Fools Day, the first day of the new financial year, or if you are property investor… new rules for the tax deductibility.  The second new year starting point for many people, another opportunity to reset.

In this newsletter we are going to talk about:

What’s up with us

Summary of March blogs

Property

KiwiSaver

Banks

Reserve bank

Hot tip of the month

First Home Buyer Tips

Did you know…

MBIE completed a review of the CCCFA rules and the Government has agreed to make some minor changes to the regulations to bring back some common sense to the evidence required, but it is going to take until June before we see these coming into effect, and the specifics of the changes won’t be announced until late April / May. We will keep you updated.

The Ukraine / Russia war is influencing oil and commodity prices which is one of the factors that is fuelling the increasing inflation. Omicron is rampant in the community in Aotearoa and there are not many households or businesses that have not been affected, with people unable to work or in forced isolation, while other household members recover.  The BOB team been working from their homes and one of the team has COVID – we are wishing her well with her recovery and providing support where we can.

Elise is halfway through her Investment Strand training and on track for completing it on time, and other projects within the business are continuing as planned

We hope that you are all well and that if there is something that we can do to support please do not hesitate to get in touch

We have posted a few blogs in March, so go and have a read.  Here are links to 2 of them, and there are more on the website.

How much should I pay for a property?

Property Values – they’re a funny business. A property is only worth what someone is willing to pay – and once you’ve bought, the value is fairly irrelevant.

Read More

Hot tip of the month

Banks like to see savings on top of KiwiSaver

If you are able to, set aside funds into a separate account. Even just a wee bit each pay. This shows that you are disciplined and able to make a regular financial committment. If you are a typically a spender then putting that saving in an account at a different bank – and not enabling the internet banking on your phone – is a good idea.  This stops you using the banking app to help fund a wee shortfall when you are buying something that you just want rather than need.

Did you know?

Interest free deals!!   We love the idea of something for nothing. 6, 12, 18 or even 24 months interest free sound great.  While they need to declare the fees be aware of the extras like $1 per month for the paper statement and if you don’t pay it off before the end of the interest free period then the charges wrack up rather quickly.  The minimum payments on the statement will not have the debt paid off prior to the interest kicking in.

First Home Buyer Tips

Buying your first home can be an overwhelming process. This is our new tips section to help you get into your own home.

What do you need to look for when you get a builders report?

Many banks are now asking for builders reports to make sure that the properties are structurally sound, weathertight and don’t have any issues with deferred maintenance.  If there is maintenance required the bank will want to make sure you have the funds to be able to do the maintenance in the coming months / years.

There are many companies which specialise in doing property inspections. They will list what is covered in the inspection, so go and find a company and check what they will be looking for. This will help you to understand the process and what you can also look out for. If you would like a recommendation, just ask!

Have a read of the First Home Buyer section on our website too.

KiwiSaver

You are now 3 months away from receiving your Government Contribution. Make sure you have put enough into your KiwiSaver to receive the full free allocation of $521.43  – please contact us if you would like some help accessing your KiwiSaver account.   Many KiwiSaver accounts have been affected by the war and the stock markets both in NZ and overseas continue to be largely unpredictable.  If you are looking to be using some or all of your KiwiSaver within the next 5 years let’s have a conversation and talk through balancing your portfolio.

Banks

More banks are open to lending up to 90% LVR level, but the requirements are still very strict for qualifying deals.  Construction finance is also becoming very difficult to get given the delays due to material delays and the need for changes to plans to allow for substitution of materials.

Interest rates are continuing to rise, and determining the best strategy for you will depend on your intent with the property and your cashflow in this high inflation environment. Let’s talk.

Reserve Bank 

The next banks next policy statement is due in the middle of April and the expectation is for the OCR to continue to rise as a way to combat the increasing inflation.  We are also expecting to see the Consumer Price Index well over 6% due to the sharp increase in food and fuel prices.  Supply chain constraints also continue to be a driver.  The opening of the borders will certainly help hospitality and tourism businesses in NZ, the question is will it be enough?

Property 

Real Estate agents who I am working with are telling me that there are more properties coming on the market, mainly from Investors who have owned the properties for a long time and are now starting to sell their stock as they move towards retirement.  Fewer buyers are finance ready at Auctions so not all properties are suitable for being sold at auction.  We are seeing more deadline sales and “regular” by negotiation sales again.

This is the time for experienced real estate agents to show their value in how they promote and handle properties.  For many new agents that have not worked through a flat and down market, the idea of a property taking more than 2 weeks to get an offer is weird.  Select your agent carefully if you are looking to sell your property.  Not all regions (and suburbs for that matte)r are seeing the price drops.  In some areas if the properties were to drop by 10% it would bring the property values back to what they were in July last year.

We are always available for a chat about your situation. Book a meeting at the Calendly link, or send us an email.

Until next time,

Elise and the Team