Reserve Bank more serious about negative interest rate
Groundwork shows Reserve Bank getting more serious about
negative interest rate.
Confidence in the retirement sector, coupled with a low yield environment in so many other sectors, that prompted the launch of a further investment offer from Senior Trust Management Limited, the Senior Trust Retirement Village Income Generator (“Income Generator”), which is aimed at meeting the ever-increasing demand from depositors who want a fair return to support their lifestyles.
We believe that the premium retirement villages that the Income Generator lends to are providing superior homes and environments to an increasingly discerning segment of retiring New Zealanders - those that want something better than the average - past experience suggests that this top end of the market will continue to perform well.
Cutting the OCR below zero would benefit borrowers including homeowners who could see mortgage rates fall by up to about 1 per cent, at the expense of savers who have already seen interest rates on term deposits and other cash savings hammered.
The Reserve Bank has asked banks to update their system to allow for a negative OCR by the end of this year, though Governor Adrian Orr has given the bank’s word to keep the rate at 0.25 per cent until March.
- Tom Pullar-Strecker Senior Business Reporter Stuff 05:00, Aug 14 2020
"Governor Adrian Orr has given the bank’s word
to keep the rate at 0.25 per cent until March."
The Income Generator has agreed loan terms with four well located premium retirement village entities which will underpin the 6%pa pre-tax targeted return.
Further lending opportunities are being investigated and the Income Generator is actively seeking applications to invest to meet the growing demand from Retirement Village entities seeking funds to grow their villages.