Although the New Zealand economy enjoys historically low interest rate with financial institutions more lenient in extending credit to homebuyers and property investors, market forces do not favour everyone, says an expert.
Ravi Mehta, Director of Professional Financial Solutions Limited (PFSL) described the market for mortgage finance as ‘extremely good,’ and hence borrowing for buying properties instead of renting them made sense.
He said apart from bank finance, which could be up to 95% of the value of the owner-occupied and investment properties, potential buyers have the option of withdrawing monies from their KiwiSaver accounts. First homebuyers can also seek a subsidy from Housing New Zealand.
“Many of our clients have benefited from these with our expert guidance and professional advice,” Mr Mehta said.
Shortage hits
But the current market conditions favour sellers, as they enjoy good prices for their properties, because of short supply of properties, he said.
Buyers should look for areas in which prices have not gone up substantially during the last two years, as houses in those areas are still affordable, he said.
Mr Mehta said that increasing number of sales through auctions is another restraint, since potential buyers cannot make conditional offers.
“A bidder should perform considerable pre-bidding activities, including valuation and inspection of the property. These would involve cost before one knows whether they would get the property at the auction,” he said and added that apartments were a good option under the current market conditions.
Extensive services
Mr Mehta said that his company provides services covering the financial needs of most people in the property market.
“We get loans approved, negotiating the best possible price, structure or re-structure loans in the most tax-efficient and interest-efficient manner. We suggest appropriate insurance cover to protect the assets of our clients, including their income-earning capacity,” he said.
As well as being an authorised Financial Adviser with decades of experience in the field, Mr Mehta is proud of his team at PFSL, which includes qualified chartered accountants Surya Phutane and Marx Zhou for filing tax returns of clients.
“Since its establishment, our Company has covered mortgage and insurance needs of more than 2000 clients and we file tax returns for more than 500 property investors. Many of those have migrated overseas, particularly to Australia, continue to file their annual tax returns through PFSL. We also look after the accounting needs of small businesses, including their GST, PAYE and other tax returns at reasonable rates,” he said.
Bright prospects
He believes that the financial services sector is poised for better times, with economic recovery here and abroad. Stating that New Zealand was among underinsured markets, he said that the potential was high to increase the value of premium written and the number of customers serviced.
“The market has always been competitive, with high quality mortgage and insurance advisers and more have joined the sector in recent months. Mortgage brokers account for a third of the mortgages, the balance written by banks directly. There is therefore significant opportunity for us to increase the market share,” he said.
Clients’ tributes
A number of clients have expressed their appreciation of the services rendered by PFSL in recent years.
Among them were Jonathan Staples and Siobhan Maccarthy, who said, “We chose PFSL to source our mortgage because they have a great reputation. Mr Mehta got us an amazing rate on our mortgage and made the process effortless.”
Shomi and Praveen Payak said that the Company processed their applications for loans in October 2012 and March 2013 with ‘great efficiency and friendliness.’
“Mr Mehta visited us and the property to make sure that we get the best rates and explain our liability with the loan. We are extremely satisfied and happy with him and his team,” they said.
Deepak and Sandhya said that they have enjoyed personalised and quality professional services from the Company over the past ten years.
We have never had to worry on any of issue, Mr Mehta has been the driving force in our growth and wellbeing,” they said.
