Rental property investors and the real estate industry should prepare for some turbulence later this year because the Reserve Bank is gearing up to tighten lending rules for landlords, possibly as early as November.
The Reserve Bank finds itself between a rock and a house. It needs to cut interest rates to try to boost Consumer Price Index inflation from 0.4% currently to closer to the 2.0% mid-point of its 1-3% target range. But it knows that further falls in mortgage rates would just pour more fuel on the fire burning under Auckland house prices and now spreading to the rest of the country.
The Reserve Bank finds itself between a rock and a house. It needs to cut interest rates to try to boost Consumer Price Index inflation from 0.4% currently to closer to the 2.0% mid-point of its 1-3% target range. But it knows that further falls in mortgage rates would just pour more fuel on the fire burning under Auckland house prices and now spreading to the rest of the country.
