UPDATES & RESOURCES
FARM SUCCESSION PODCAST
A podcast on farm succession presented by Peter as part of the Post Quake extension program
OCR GOING NEGATIVE
April 28, 2020
An interesting commentary from Westpac today on the OCR potentially going negative, the possible timing and implications. This will have quite an impact on capital markets but given what we have seen over the last 6-8 weeks I guess we should take nothing for granted. Some of the interest rate decrease, should it happen, will flow through to lower rates on both side of the balance sheet for borrowers and depositors. It will also have a positive impact on the transactional market and potentially make debt funding of an acquisition or expansion and development finance more attractive.
The return on capital from farming for first time in my memory is now exceeding the cost of capital and looks like it should be this way for the foreseeable future. That makes buying a farm and servicing the debt easier than it has been!! So while there are some dark clouds on the horizon there are also plenty of opportunities.
It will be interesting to see how the market plays out over the next six months.