On the up: What will higher interest rates mean for real estate investors in New Zealand and further afield?
The Land of the Long White Cloud is shaping up to raise rates and the country may well be a bellwether for the Australia...
With speculation increasing that the cash rate is set to rise in 2015, a wealth coach has urged investors to consider fixing their interest rates.
Zaki Ameer, wealth coach and founder of Dream Design Property, said rising property prices and “unconventionally low” interest rates were creating an ideal environment in which to invest – but warned that variable rates remain risky.
“Interest rates have remained unchanged for two years now, and in my opinion, that’s because there is still some local uncertainty within our economy, which may be caused by local involvement in international terrorism,” he said.
“As a result, some banks are now offering five-year fixed-term rates at 4.99 per cent, which is very favourable. My advice to investors usually revolves around property investment for the longer term, and with this in mind, I would advise my clients to most certainly take this opportunity to fix their rates, as opposed to risking variable rates.”
Mr Ameer said the opportunity to invest in Australian property had “never been better” and that investors who fix their rates will reap the most rewards.
“Aside from the obvious benefits, which is low interest repayments for those who have fixed, what many people do not realise is that when the Reserve Bank does increase its interest rates, rent prices usually increase too, and this then creates more cash flow for investors.”