Private Property issue #135

Here are my 12 predictions for the year ahead.

January – Uncle Lester will be back.

Every family has a grumpy uncle/aunt/cousin at the family BBQ who makes crazy predictions. I call that person ‘Uncle Lester.’

This year, Uncle Lester will declare, “There’s an oversupply of housing! House prices will crash!”

He’ll be wrong this year … as he is every year.

February – Interest rates will keep falling

Interest rates will likely keep falling, with more OCR cuts coming around February.

But interest rates will likely hit a floor. I don’t expect we will see them dip to 4%.

But we’ll probably be at around 5 - 5.3% rate by the end of 2025.

March – Banks will make it easier to borrow money

Banks are already making it easier to borrow money.

At the start of the year, ANZ was testing your mortgage application with an 8.95% test interest rate.

They've cut that by 0. 9% this year. I expect this downward trend to continue, making it easier to borrow.

April – But, the DTIs will start to hit in April (where they haven’t before)

While lower test rates make it easier to borrow. By April, the Reserve Bank‘s Debt-to-Income (DTI) rules could finally start to bite.

At the moment, interest rates are so high that they’re not having much of an impact.

But as interest rates come down, the DTIs will make it harder to invest in existing properties. At least, compared to what otherwise would be the case.

Meanwhile, New Build investors don’t have to follow these new rules.

May – 3 big-name developers will go bust.

Even though the market is recovering, developers are still hurting.

People in the building industry say that they are less profitable. And their margins are being squeezed.

So investors should still be able to get a sharp deal … but look out for unstable developers.

June – The tenancy laws will get a shake-up.

National will also rebalance the tenancy laws.

Pet bonds will come in … and you’ll be able to ask your tenants to leave in 90 days … without stating a reason.

Not many investors will use that option, but it will be a ‘get out of jail free’ card for investors who rent to the wrong tenant.

July – The best property investment app in New Zealand gets an upgrade.

Big upgrades are coming for Opes+.

In February, we’re releasing Opes AI. This will let you plan your property portfolio with artificial intelligence. The AI will forecast:

• how much you can borrow,
• how many properties you can buy,
• when to buy each property.

By July, you’ll be able to manage your investments through Opes+. That means you'll be able to see your tenancy, mortgage, and accounting details. This will be big!

August – House prices will start to pick up.

You should see house price increases in New Zealand’s most undervalued regions.

That includes Auckland and parts of Canterbury.

Just this morning new data came out. It shows that house prices have stopped falling and are now going up.

If this trend continues, the house price increases will be noticeable by August next year.

September – Council rates will climb … again

Some council areas will increase their rates at twice the rate of inflation.

Not all of the 67 regions will see a significant increase in rates. But some will.

Wellington City Council forecast they’ll increase rates by almost 11% next year. That’s after an 18% increase this year!

October – The government will pass their new minor dwelling rules.

The coalition government wants to make building a granny flat in your backyard easier. These rules should be in by October.

This should save 5-10% of the cost of building a minor dwelling, which is around $10,000 - $20,000.

November — The rental market will start to recover

The rental market has been tough this year. A net 22% of property investors say it’s tough to find good tenants right now.

But we’ve been here before. The rental market is cyclical. It’s tough now, but it should improve by November next year.

December – Episode 2,303 of the Property Academy Podcast comes out

By December, we’ll know which predictions have come to pass.

Ed and I will be there daily with the Property Academy Podcast to share which ones come true.

At that point we will have released episode 2,303 of the podcast. And we’ll have clocked over 10 million downloads since starting!

And if you want to dig into these predictions, you can watch this week’s webinar where we went through them here.