Cairns Lockie Mortgage Commentary #9
Cairns Lockie Mortgage Commentary
Issue 2000/9 19 May 2000
Welcome to the nineth 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 http://www.emortgage.co.nz
The Money Market
This morning (9 am on 19 May) the money markets were at the following levels:
Official cash rate 6.50%
90 day bill rate 6.90
1 year swap rate 7.32
3 year swap rate 7.80
10 year bond rate 7.16
Kiwi dollar 0.4504
Reserve Bank Increases the Official Cash Rate (OCR)
On Wednesday, this week, the Reserve Bank increased the Official Cash Rate from 6.0% to 6.5%, matching a similar move by the US Federal Reserve. This was the fifth increase in New Zealand, in the past six months. The Official Cash Rate in the USA remains the same as ours. In spite of the series of increases this year, NZ growth rate is expected to remain strong with little effect on our employment outlook.
It is Not All Bad News on the Housing Front
One section of the housing market that is still buoyant is the home renovation market. For the first three months of this year, we applied to our local councils, for permits of $140 million to complete house renovations. This was up on the previous year by 10%. The real figure is even higher, with many home renovations (such as painting) not requiring a permit. The most popular rooms to renovate are still kitchens and bathrooms. A recent article in the Home and Garden magazine from the Consumers Institute said that renovating your bathroom will add value to your property but this is not always the case with your kitchen. Home owners tend to over spend on kitchens.
Computerisation of New Zealand Land Information
Land information New Zealand (LINZ) formerly the Land Transfer Office (LTO) is computerising its records. Those lovely titled deeds are being replaced with a computer printout. The Dunedin office is the first to be computerised. We understand home owners can apply to LINZ and ask for the old copy of their title deeds.
You're Right, Fees Have Skyrocketed
A recent article in the Wellington Evening Post on bank profits noted that banks were looking at fee income as one way to maintain their profits. Over the last year, it said, all of the major banks had increased their fees. We all have experienced this and it looks as if banks will continue this pattern. At Cairns Lockie, apart from an initial application fee, we do not charge a range of ongoing fees.
Our current interest rates are as follows
Variable rate 7.65%
Two-year fixed rate 8.55
Three-year fixed rate 8.75
Five-year fixed rate 8.90
Line of credit facility 8.00
Cairns Lockie Limited
PO Box 74-212, Market Road, Auckland
Telephone (09) 525 9711
Facsimile (09) 579 7795
If you know anyone who may find this newsletter useful we would be happy for you to forward it on.