Cairns Lockie Mortgage Commentary - 6 Sept 2004

Cairns Lockie Mortgage Commentary
Issue 2004/16 6 Sept 2004

Welcome to the sixteenth Cairns Lockie Mortgage Commentary for 2004. This is a fortnightly electronic newsletter, which aims to keep you informed on developments at Cairns Lockie, Mortgage Bankers and the mortgage market in general. Previous issues of this commentary can be found on our website http://www.emortgage.co.nz/newsletters.htm

The Money Market

This morning (8am on 6 Sept 2004) the money markets were at the following levels:

Official cash rate 6.00% (unchanged)
90 day bill rate 6.55 (up from 6.45)
1 year swap rate 6.66 (up from 6.60)
3 year swap rate 6.68 (up from 6.66)
10 year bond rate 6.20 (down from 6.21)
Kiwi dollar 0.6456 (down from 0.6631)

A Million Dollars Doesn't Go Far in Wellington

Million dollar homes which were rare 15 years ago are now becoming much more common. They first started to appear in Auckland and now Wellington is getting in on the act. Over the past 12 months in Wellington, 10 homes have sold for well over a million dollars. Prices have ranged from $1.51 million for 42 Murrayfield Drive in Thornton to $1.98 million for 13 Lower Watt Street in Wadestown. Other houses to sell in this range include 13 Talavera Terrace in Kelburn for $1.55 million, 19 McFarlane Street, Mt Victoria at $1.58 million. The oldest home in this price range was built in 1896 with the most recent having been completed in the last couple of years. Prices in Wellington have increased over the past six consecutive quarters. The median price in the region is now $266,000 - well up on $226,800 a year ago.

Lifestyle Blocks Increase in Popularity

Want to combine the advantages of city living with a country lifestyle? - buy a lifestyle block. According to Quotable Value (QVNZ) the number of lifestyle blocks has increased from 97,000 in 1997 to 134,000 in 2003. Factors driving this increase include more flexible working hours, and the ability to work from home. There are some interesting trends emerging with these types of properties

* Continuing increase in demand for them.

* Common around all our major cities and towns. Auckland continues to be the fastest growing market.

* Tending to get smaller in size from 5 -10 hectares down to 1-3 hectares.

* Tend to be pricier than the average home. The median price for June 2004 around Auckland was around $628,000, Hawkes Bay $381,373 and Canterbury $309,744.

Hard to Get That Home Loan?

One thing we are proud of at Cairns Lockie is that we are able to assist a number of people who traditionally find it difficult to obtain a conventional mortgage. The are three main areas where we are assisting a number of borrowers

* Self employrd people who have been in business for two or three years and are now just starting to make some money. Their current financial accounts show they cannot support a mortgage but their current drawings show they can.

* Those who may have had recent credit problems say to a business failure or personal issues, maybe a divorce. They are now over these setbacks and are earning enough income to support a loan but just can not obtain a mortgage due to recent blemishes on their credit reports.

* Those on a good income who just can not save enough for a deposit and see house prices continuing to rise.

We welcome enquires from all potential borrowers especially those who may fall into anyone of these groups.

Mortgage Industry Matures

Last week the New Zealand Mortgage Brokers Association held its annual conference in Wellington. It was pleasing to see that nearly four hundred delegates attended the conference. The association is a voluntary body which is trying to impose a certain level of ethics and standards for the participants within the mortgage broking industry. This is important as the industry body is growing every year and the use of mortgage brokers becomes more widespread. The challenge for the Association over the next few years is to broaden its base and become similar to the Mortgage Industries Association of Australia. That Association does not just include brokers but all the participants in the sector such as lenders, mortgage insurers, solicitors and valuers. Congratulations to James McAllister who was named mortgage broker of the year.

Farewell Scott

Scott Gasson leaves us next week, after a busy five years with the company, and is joining another participant in the financial services sector. Lorraine McRae has been promoted to the Mortgage Operations department. Lyn Everall has also joined us in the operations area. Lorraine's and Lyn's contact details are given below. Thanks to Scott for the last 5 years and best wishes for his new role.

Our current mortgage interest rates are as follows

Variable rate 7.90%

No Financials Home Loan 8.90

Jumbo Loan 7.90

Quick Start Home Loan 7.50

One-year fixed rate 7.81

Two-year fixed rate 7.87

Three-year fixed rate 7.94

Five-year fixed rate 7.96

Line of credit facility 8.00

Regards William Cairns James Lockie

Cairns Lockie Limited 321 Great South Road, Greenlane, Auckland PO Box 74-212, Market Road, Auckland Telephone (09 526 2000 Facsimile (09) 579 7795 Website http://www.emortgage.co.nz

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