According to New Zealand's Tower Investments, purchasing a home in New Zealand is a wise decision with the inflation rate increasing globally. Same Stubbs, chief executive, stated that property investors are wise to invest in properties when inflation begins to rise.
It is predicted that mortgage rates will increase this year but does not anticipate a housing bubble. Experts believe that now is the time to purchase as interest rates and inflation are expected to rise. Some are concerned about whether to purchase now because of fear of what the market will do in the future, but the general consensus is that buying now is a wise option as buying a home is still considered a good investment.
Interest rates on mortgages are fairly reasonable currently on short to medium term loans as banks are hanging in there despite the global economic crisis. Banks have largely withdrawn from the commercial and industrial sectors, but residential mortgages have seen more stability.
Stubbs went on to clarify that home prices do not decrease when inflation rises, but they actually increase. He added that in the 1970's and early 80's, inflation in New Zealand virtually destroyed the property market. Those who had mortgages were fortunate as that protected their investments, but those who had a great deal of fixed interest deposits in banks lost out and their investment portfolios diminished in value.
Tower investments predict that the New Zealand property market will be stable in 2011 and believes that the economy will continue to recover by growing, restructuring debt, and through inflation.