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Cairns Lockie Mortgage Commentary - Issue 2000/1

Cairns Lockie Mortgage Commentary

Issue 2000/1 28 January 2000

Welcome to the first issue of the Cairns Lockie Mortgage Commentary for 2000. 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

The Money Market

This morning (8am on 28 January) the money markets are at the following levels:

Official cash rate 5.25%
90 day bill rate 5.73
1 year swap rate 6.70
3 year swap rate 7.68
10 year bond rate 7.45
Kiwi dollar 0.5050

Cairns Lockie Limited is Now One Year Old

That's right! We have accomplished a lot in our first year. In January 1999 we joined the newly established non-banking sector, offering residential mortgage services to the general public. We managed to hold our floating mortgage rate at 5.85% for the whole year. We saw our competitors quickly increase their rates whenever monetary conditions changed. We were able to offer our clients a wide product range. Our line of credit with our attached telephone banking (and no ongoing fees) has proved to be most popular. Our mortgage rates and product information is available twenty-four hours a day through our website at

This year we look forward to being of service to you and writing a lot of business.

Our Web Page at

We talk a lot about our web page and work hard at keeping it up to date. One of our most popular pages (and one that we think is unique) is our competitors' mortgage rates section. We know of no other lenders, which tell you the mortgage rates offered by their competitors. You can visit this page at

In a typical internet transaction for us last week, Scott Gasson, of our office, settled a mortgage, for an offshore borrower. The transaction was entirely electronic, from the original web based application (, to the emailed correspondence leading up to settlement.

Increase in the Overnight Cash Rate by the Reserve Bank

Last week the Reserve Bank surprised the market by increasing the Official Cash Rate from 5.0% to 5.25%, despite there being weaker than expected inflation. The reason for this appears to be the strong performance of the economy in the last quarter and the increasing favourable employment outlook for the coming year. A recent survey on the manufacturing sector by WestpacTrust shows that most in the manufacturing sector are positive in their outlook for the coming year, although there is some concern ove r proposed changes to the ACC, the Employment Contacts Act as well as the likelihood of a slightly appreciating exchange rate.

What are House Prices Doing ?

According to figures recently released by the Real Estate Institute of New Zealand, the residential market experienced a small downturn in prices in the past quarter. The national median price for December was $170,000 compared with $172,000 in November. For Auckland, the corresponding figures were slightly up from $232,000 in November and $235,000 in December. Interest rates have been largely blamed for the slow real estate market but we believe it is more than this. Other factors impacting on house prices are: outlook for employment, immigration and emigration, inflation and the general economic outlook. Overall, we still have low mortgage rates compared with rates over the past twenty years.

Our current interest rates are as follows
Variable rate 6.80%
Two-year fixed rate 8.35
Three-year fixed rate 8.65
Five-year fixed rate 9.00
Line of credit facility 7.15

William Cairns
James Lockie

Cairns Lockie Limited
PO Box 74-212, Market Road, Auckland
Telephone (09) 525 9711
Facsimile (09) 579 7795



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