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Brighter future for property owners

Worried about your financial future? Investors can rest assured their outlook is brighter than that of many, a new survey indicates.

Thursday, April 7th 2016, 11:00AM

by Miriam Bell

BNZ has just released its Financial Future Research which shows that those who own property display better financial behaviour than those who don’t.

The bank’s director of retail and marketing, Craig Herbison, said property owners are more likely to think long term about their finances than non-property owners.

Non-property owners were twice as likely to be living pay cheque to pay cheque versus property owners, and many also spend more than they earn, he said.

"This is in contrast to property owners, for whom nearly half (43%) have enough discretionary income that they can pay more off their mortgage than required, even if it means making lifestyle sacrifices.”

Property owners making lifestyle sacrifices to pay off their mortgage faster were cutting down spending on such things as travel, eating out, new technology, and clothes.

Herbison said nearly three quarters of mortgage holders reviewed the structure of their mortgage regularly.

This was encouraging as the current low interest rate environment provides a powerful opportunity to pay off mortgages faster than ever, he said.

Property owners were more disciplined and strategic in their financial practices - and more optimistic in their assessment of the property market.

This was in stark contrast to non-property owners, who displayed a sense of despondency, Herbison said.

"Almost 60% say that buying their first home is not achievable in the next five years. One in five non-property owners do not aim to buy a house at all.”

However, the survey shows that many non-property owners seemed to be missing a commitment to saving, with one third confessing they spent more than they earnt.

Herbison said people wanting to enter the property market should heed the advice of those who have done it before, and think more broadly to develop their plan.

"What’s really interesting is that property owners are far more pragmatic. When we asked them how they thought people can reach their deposit, they often talked about three or four different sources.”

It also appears that the act of owning a home, or not, may also impact on optimism, he added.

“We asked if it was the right time for people to buy their first home – 63% of property owners think it is a good time, versus only 37% of non-property owners.”

BNZ’s findings come shortly after a Barfoot & Thompson survey which revealed that young Aucklanders are holding back from taking the first step on the property ladder.

 

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Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 4.05 4.49
ANZ Special - 3.55 3.55 3.99
ASB Bank 5.20 3.89 4.05 4.39
ASB Bank Special - 3.39 3.55 3.89
BNZ - Classic - 3.49 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.54 3.54 3.69
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank ▼5.20 ▲4.20 4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▲3.45 3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.39 3.45 3.89
Sovereign 5.30 ▼3.89 ▼4.05 ▼4.39
Sovereign Special - ▼3.39 ▼3.55 ▼3.89
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.39 3.45 3.99
Median 5.34 3.99 4.07 4.39

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