The saying may you live in interesting times couldn’t be more true at the moment.
I went to the Reserve Bank’s Official Cash Rate press conference yesterday and a couple of things are clear. The central bank isn’t seeing much sign of inflationary pressures, and it forecasts the OCR isn’t going anywhere soon.
However, that doesn’t mean interest rates are staying put. Indeed I’d suggest they will rise for a couple of reasons.
One is that banks are having to compete far more strongly for deposits to fund lending. The second is an interesting comment from the Reserve Bank governor, Graeme Wheeler, that some banks are reaching their limits on borrowing offshore.
My other key observation is that the housing market is, arguably, at the peak of this cycle and now heads into the next phase.
This potentially will have a big impact on every mortgage advisers’ business.
I'd be interested to hear your thoughts on the market and how you are preparing for the next part of the cycle. You can email them to firstname.lastname@example.org
- Philip Macalister