Borrowers have the upper hand

Banks such as the BNZ are ready to talk about special fixed rate home loans. Photo/Stephen McNicholl

Some interesting comments are coming in from readers (and podcast listeners) with regard the fixed-rate mortgage deals they are achieving. It appears some lenders are folding like cheap shirts when borrowers threaten to take their mortgage business elsewhere.

One reader went to the Co-op in Auckland and was offered a rate of 4.99 per cent for two years. He took the Co-op's written offer to his current bank -- the BNZ -- and they matched it, having previously offered only 5.39 per cent. He even pushed for a cash "reward" and got $500 popped into his bank account.

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Another reader got 5.1 per cent for one year at the ASB, a significant discount on its currently advertised rate of 5.35 per cent.

Deals are being done, and if you want to pay less for your home loan, just put your poker face on and ask your bank what they can do for you. Make no mistake, the bankers are laughing all the way to the bank, as they lend out money that's costing them next to nothing.

Some banks abroad are even charging their customers to look after their savings. The official cash rate in Switzerland is minus 0.75 per cent. In Sweden it's minus 0.25 per cent. Here, the OCR is 3.5 per cent.

ASB economist Chris Tennent-Brown says: "We continue to favour a September OCR cut. However, in saying that, we regard every [Reserve Bank] meeting from now on as 'live'; that is to say we cannot rule out the chance of an earlier move in June or July."

I know I sound like a broken record, but most of the economists I follow say our OCR can only go down, and in my opinion banks are being greedy by keeping floating rates at 6.75 per cent.

House prices

Property values in Auckland look set to continue rising as nothing the Government has done will increase affordability. Don't hold your breath for a price correction this year.

BNZ economist Tony Alexander writes in this month's edition of his NZ Observer newsletter that "the only serious candidate for a period of price declines is a New Zealand recession being aggravated by a sizeable downturn in trading partner growth".

"This is not something we expect to see happen within the next two years," he says.

Hashtag grumble

Harcourts' CEO Hayden Duncan is concerned that some people took to Twitter this week to share their unhappy experiences with real estate agents.

He says although the online banter was all in good fun, "it does indicate a level of dissatisfaction and negativity toward real estate agents". It's something he wants to address.

"We can take a joke at our expense, no problem, we don't take ourselves too seriously," he says. "But what we do take seriously is customer satisfaction and if there's one thing that Twitter showed us, it's that there is an underlying feeling of negativity toward real estate agents in general."

Duncan wants to talk to people who have had negative experiences with real estate agents -- "no matter who their agency is or was".