Welcome Back to Homeland Hub

Speaker 1 0:10

Hello and welcome back to that Homeland Hub . I'm joined by Kunj . Hello , kunj , good morning , how are you ? Wonderful , so good to have you back .

Speaker 2 0:19

Yeah , it's been a little wee while since we've done this podcast thing .

Speaker 1 0:23

I know We've been very busy . We were away traveling , we had lots happening , we had our annual conference , we did , we did , and we'll dive into what we've learned at the conference as well . Yeah , but today it's very important to talk about something that everyone always talks about O-C-R , yes , official cash rate .

OCR Drop and Interest Rate Effects

Speaker 1 0:43

So we recently had a massive drop again . Well , not a massive one , but a drop nonetheless yeah . And it's the drop of 0.25 , which had a follow on effect . Yes , let's dive into it .

Speaker 2 0:55

Yeah , well , was it the 20th of August ? So what , three weeks ? Two weeks ago , yeah , we had that 0.25 drop in the OCR . So obviously with that dropping we had a drop in interest rates . So finally we've seen the six-month rate at under 5% , which is great for those you know short fixed terms , because obviously these predictions of the OCR still dropping a couple more times this year . So I think we've got one due .

Speaker 1 1:30

I thought there was one this year and one next year that they're predicting to drop , hopefully , yeah , yeah , which is incredible because , if you think about it , this time last year we were sitting at about 6.7 for six months , yes , and now we're sitting at 4.99 . Yeah , that's massive difference .

Speaker 2 1:44

It is really massive for a lot of homeowners or the ones that were on the 6% or things like that .

First Home Buyers Return

Speaker 2 1:56

They're actually , you know , for an average home loan you're getting back about $120 to $180 per month on the repayments . But if you've managed for the last year or two years on that , keep paying it because you'll see the savings on interest as well .

Speaker 1 2:13

Yeah , yeah , because it will save you like five years off your mortgage straight away if you keep the repayments the same . But I guess for a lot of people it's a welcomed relief because a lot of people Absolutely .

Speaker 2 2:23

Yeah , the struggle's real out there . We're all struggling and it's a good relief to see that homeowners will get some relief in that . But then it balances out with the increase . Of you know , our power bill has gone up , our insurances , our rates have gone up , so yeah , so it's a catch-22 on that side of things .

Speaker 1 2:44

Yeah but it's a welcomed relief . The rates are going down . There's a bit more positivity from our first-home buyers , especially because , for those that stayed away for the last year or two watching the rates climb up and seeing their friends struggle , yeah , they didn't want to . No , they didn't want to struggle . So now they're like , oh , actually , maybe things will improve , maybe we should jump on this ladder now . So we do encourage you highly to jump on the ladder and benefit from those low interest rates .

Speaker 2 3:12

Yeah , and I think we've also seen an up on our first home buyers and things coming through to us as well as advisors . We've seen a lot of inquiries coming through for our first home buyers , so they're coming out in the market with the lower interest rate and things . Historically , though , with interest rates coming down ,

Wellington Investment Opportunities

Speaker 2 3:35

you see house prices Go up , but They've actually flattened , which is actually Really good . So I think it's quite A Good time For our you know , first home buyers and things like that .

Speaker 1 3:47

To jump in , especially in the region that went Like Wellington region Was the worst .

Speaker 2 3:52

One of the worst . That was like 27% A drop in house prices .

Speaker 1 3:59

So , for those that are looking to invest and you're listening to me outside , because I see where you guys are listening from and big shout out to Auckland , so a lot of Aucklanders are listening , so , thank you , if you are in Auckland and you're looking to invest , hey , invest in our region , invest in Wellington . Auckland is going up , wellington is going down , so good time to be investing in this area because you can still get really good returns . Like we just had clients buy even outside of Wellington , like Shannon really random place but they spent $550,000 on this property and it's got another property on the same land and they're getting like $850 return in rent Wow .

Speaker 1 4:39

So there are some absolute nuggets of gold out there , and this client cracked me up because we've just signed their documents and they're going . Do you think we should buy another one ? If we find another one , could we buy one more ? Another ? Gma , exactly , and that's the thing . Those that are willing to take the risk , those that are making the positives out of this OCR drops , are the ones that will benefit long term . Yeah , yeah .

Speaker 1 5:06

So really good point , conch . Thank you so much for that . Normally , when the OCR drops , the rates go down . Property prices go up . In this case , right now , the property prices haven't gone up yet . They're still flat , so you've got a fantastic opportunity to go out there and buy something Definitely a sweet spot right now .

Speaker 1 5:25

Awesome . But again , as usual with the OCR drops , the real losers are our term deposit holders . They're the ones that will see the drop in their term deposits and their savings ,

Impact on Term Deposit Holders

Speaker 1 5:35

and they will be the ones looking for alternative investments . Correct , you are correct ? Yeah , awesome , Well , thank you so much for that . This wraps up our episode on OCR . Thank you , thanks , bye , bye .