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Cairns Lockie Mortgage Commentary 2002/2

Issue 2002/2 22 February 2002

Welcome to the second Cairns Lockie Mortgage Commentary for 2002. 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 (9am on 25 February 2002) the money markets were at the following levels:

Official cash rate 4.75% (unchanged)
90 day bill rate 5.00 (up from 4.89)
1 year swap rate 5.50 (up from 5.36)
3 year swap rate 6.48 (up from 6.37)
10 year bond rate 6.56 (up from 6.53)
Kiwi dollar 0.4180 (up from 0.4165)

Welcome to Our Newest Lender

Welcome to Debbie Whitehead who joined our residential lending team last week. Debbie was previously with Asset Lend as Broker Liaison Manager following a number of years in the finance industry in New Zealand and abroad. Welcome. Debbie can be contacted on mailto:dwhitehead@emortgage.co.nz or on Auckland 525-9711.

We Were Right: It Was a Good Time to Invest

The market really does get things right. Exactly a year ago we published an article in this newsletter about a survey conducted by the Residential Property Investors Magazine. At that time, a starling 82% of those surveyed believed it was a good time to purchase a residential rental property. Over the past year we have seen interest rates fall to historically low levels, and particularly in Auckland we are seeing a strong tenant demand, with rents actually rising. Many in the property industry are suggesting that an increase in values is just around the corner.

Firm House Market in January

Last month (which is traditionally quieter) was a busy month for real estate agents. A total of 6,771 houses were sold nationwide compared with only 4,741 in January 2001. This is still someway off the high of January 1997 when 7,849 houses changed hands. Although volume was well up, there are few signs of any house price inflation. In January 2002 the median house price for New Zealand was $175,000, the same as it was a year earlier. Even in Auckland, where a lot of this activity is taking place, the median house price has only moved from $240,000 to $245,000.

Non Conforming Loans Prove Popular

Last month we introduced our Non Conforming Home Loan. It is going very well. It is aimed at the segment of the market who have had a credit problem in the recent past and are having trouble with obtaining normal bank finance. We can offer them this product so they can start to rebuild their financial lives. If you require any information about this product or know anybody who is having difficulty obtaining finance please do not hesitate to give us a call.

We Are Taking Deposits

We are rapidly moving to becoming a " One Stop" mortgage lending company. We are offering mortgages at prime rates, have our Non Conforming product, together with a fully operational Contributory Mortgage company. We also have some funds available for shorter-term second mortgages. We are taking deposits for our Contributory Mortgage company. Security offered is only first mortgage secured over residential property.

Our current mortgage interest rates are as follows

Variable rate 6.40%

No Financials Home Loan 7.40

Quick Start Home Loan 6.42 (new)

One-year fixed rate 6.71 (new)
Two-year fixed rate 7.35
Three-year fixed rate 7.77 (new)
Five-year fixed rate 8.10

Line of credit facility 6.75


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