SCF collapse catalyst for property

Photo / Herald On Sunday

Could South Canterbury Finance (SCF) investors use their NZ$1.6 billion of immediate cash repayments from the government to invest in property?

Real estate agency First National has suggested many investors may choose to invest their cash in property rather than in banks.

"The recent rescue of SCF investors by the Government may provide a much-needed catalyst for the property market," First National Group general manager John Stewart said.

"With the demise of SCF, investors soon to be repaid by the Government will face a new dilemma. Where should they put their money now? "Is their money safer in the bank? Or will they inject it directly into property?," Stewart asked in a statement.

"No doubt both sectors will be waiting for these decisions with bated breath. If the banks have a cash injection from investors that could loosen the mortgage reins, with positive flow on effects to the property market. If investors put it straight into property, it may kick start the building, the buying and the selling," he said.

"Either way, the Government's rescue package may be the catalyst that Spring has not yet provided for the country's property market?"

- INTEREST.CO.NZ