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Cairns Lockie Mortgage Commentary

Cairns Lockie Mortgage Commentary

Issue 2003/14 8 August 2003

Welcome to the fourteenth Cairns Lockie Mortgage Commentary for 2003. 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 8 August 2003) the money markets were at the following levels:

Official cash rate 5.00% (unchanged)
90 day bill rate 5.10 (up from 5.06)
1 year swap rate 5.15 (up from 5.05)
3 year swap rate 5.66 (up from 5.49)
10 year bond rate 5.80 (up from 5.59)
Kiwi dollar 0.5765 (down from 0.5850)

Auckland Property Market

Those not living in Auckland may not realise that Auckland is made up of five distinct cities. Each city has its own distinct property market. Often when property commentators are talking about property prices around the country they lump all of Auckland together. This is misleading. Real estate company, Bayleys, has produced the following research showing average house price changes from May 2002 to May 2003 across the five cities:

May 02 May 03 % change $ $

North Shore
280,000 May 02
331,000 May 03
18.2 % change

Auckland City
315,730 May 02
371,500 May 03
17.7 % change

Waitakere City
207,000 May 02
232,750 May 03
12.4 % change

Manukau
265,000 May 02
276,000 May 03
4.2 % change

Papakura
180,000 May 02
200,000 May 03
11.1 % change

This breakdown is interesting as it clearly shows that Auckland and the North Shore are expensive places to live, but there are areas of more affordable housing in Waitakere City and Papakura.

Mortgage Rates Steady

The next review of interest rates is not until next month. We expect a degree of stability in mortgage rates following last month's reduction on OCR and mortgage rates. The floating rate will remain at current levels but borrowers should be aware there will be small movements within the fixed rates. Do not be surprised if the longer dated fixed rates may jump around by 10 -20 basis points. Consensus opinion is still that floating rates will decrease again by a quarter of percent in September.

Our Prime Lending is Going Well

At Cairns Lockie we offer an extensive range of mortgage services, including second mortgages, non confirming mortgages, those designed for borrowers with credit issues, and several types of mortgages for the self employed. However our main mortgage product and the bulk of our business is the standard mortgage aimed at those purchasing their family home or an investment property. Our mortgages do offer a number of unique features, lots of flexibility, together with attractive interest rates. Call us for more info.

Nelson Market Still Hot

Several popular holiday, lifestyle, or retirement locations around the country are attracting record property prices. These include such places as Queenstown (heart of Central Otago), Taupo (by NZ largest lake) and Nelson (nice climate, retirement area). We have profiled a number of these in our previous newsletters. Nelson is again attracting buyer attention when a small two bedroom 1960's house sold for $810,000 well ahead of its council rating valuation of $295,000. The house was on a large 2,499 square metre section located on Nelson's Ruby Bay beachfront. The strong selling point was its all day sun and fantastic panoramic views.

Our current mortgage interest rates are as follows

Variable rate 6.75% (new)

No Financials Home Loan 7.75 (new)

Jumbo Loan 6.75 (new)

Quick Start Home Loan 6.00

One-year fixed rate 6.31

Two-year fixed rate 6.67 (new)

Three-year fixed rate 6.89 (new)

Five-year fixed rate 7.16 (new)

Line of credit facility 6.85 (new)

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