House prices to fall?

A report in the Fiji Times last Saturday, 21 April 2007, talks about demand for home loans having fallen over recent months as a result of monetary policy decisions taken by the Reserve Bank of Fiji. Read more on the Fiji times story here.

What are some of the things one should expect in this market in the near future?

These are some :

1. demand for home loans continuing to slow as lending interest rates currently remain high and as the Reserve Bank of Fiji continues with its policy - one of which does not encourage ownership of second homes by members of the public;
2. prices of residential property falling as a result of reduced demand;
3. buyers or intending buyers of residential property having a good opportunity to bargain for prices that they want, i.e. there being a buyers market for residential property;
4. more properties coming to market on mortgagee sale as members of the public have problems with paying their loans given the high interest rates and coupled with reduced working hours/salaries and redundancies in the current economy.

For those that will be buying residential property soon, please scope out deals and bargain, bargain and bargain (with sellers). Given that interest rates may come down in a few months, do not enter into a long-term fixed rate housing loan. Get a variable rate home loan for which the interest rate will be reviewed and reduced when interest rates fall.

Note : For those of you who require investment advice or assistance with getting a home loan or business loan, our company, Gilbert & Samuels Company Limited, can do this for you for a small fee. To contact us, you can e-mail gilbert@connect.com.fj or call telephones (679) 3396427 or (679) 9921427.