Auckland-based financial services firm General Finance is asking why non-resident buyers of houses in New Zealand aren't restricted to buying only new houses.
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The company said that policy was in place in Australia, Singapore and Hong Kong and had been suggested before, but never followed through by policy makers.
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One of the senior executives at General Finance, William Cairns, said the idea had a lot going for it.
"It will get more new houses built and, in various places in New Zealand, we need more new housing."
He said there were other spin-off benefits as well.
"It leaves the second-hand housing market, or the used houses, just for the local New Zealand residents," he said.
Mr Cairns said more housing was needed, especially in Auckland.
He also said a lower Official Cash Rate (OCR) would not necessarily translate into lower home loan rates.
"Even if the Reserve Bank cuts the overnight cash rate another once or twice, longer term bank funding has been increasing so I don't think there's any more decreases in mortgage rates," he said.
More OCR cuts expected
The Reserve Bank surprised many analysts earlier this month by cutting the OCR to a record low 2.25 percent, and signalled more cuts to come.
The Reserve Bank will take another look at the OCR next month, with one senior economist, Benje Patterson, who is at Infometrics, predicting a move to 2 percent, due to weak inflation.
But whether that adds heat to the housing market is another story.
Massey University School of Economics and Finance associate professor David Tripe was sceptical that would happen, saying house price expectations were the key driver, not interest rates.
"If we have a bubble in the housing market, that's driven by expectations of price increases... not necessarily particularly constrained by interest rates," he said.
Meanwhile, in the low-interest rate environment, Mr Cairns said now was the perfect time to borrow.
"If you've got secure income then this is a good time to borrow because rates are low, and I think on the plus side they're going to stay lower for longer than anticipated."
But he said it was a different case for deposit-holders.
"We get numerous phone calls from our depositors asking us how much lower deposit rates could go and just how much harder it is to live, so the retired person on a fixed income that's used to getting 7 or 8 percent on their bank deposits is now getting around 3 percent."
