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Cairns Lockie Mortgage Commentary

Cairns Lockie Mortgage Commentary

Issue 2005 / 17 23 September 2005

Welcome to the seventeenth Cairns Lockie Mortgage Commentary for 2005. 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 (8 am on 23 September 2005) the money markets were at the following levels:

Official cash rate 6.75% (unchanged)
90 day bill rate 7.10 (up from 7.06)
1 year swap rate 7.08 (up from 6.98)
3 year swap rate 6.66 (up from 6.64)
10 year bond rate 5.65 (down from 5.70)
Kiwi dollar 0.6980 (down from 0.7043)

House Prices Still Strong

According to the latest figures published by the Real Estate Institute, the national median price for residential dwellings countrywide is now $290,000, 70% higher than the $170,000 median price five years ago. The median price increased by $10,000 over the past month. House sale volumes remain firm and it now takes less time to sell a property - 29 days down from 31 (in July). The housing market is expected to remain firm until Christmas due to the election being over and springtime is traditionally an active period for the residential property market.

Interest Rates Post Election

The election is over - the question is what is likely to happen to mortgage rates? In the short term we think they will stay where they are, however there are some negative signs appearing that may push interest rates up:

- Our inflation rate is likely to spike over the Reserve Bank's 3.0% target, partly due to fuel price increases.

- Our current account deficit is reaching unacceptable levels which may cause our currency to depreciate and so lead to higher inflation.

On the positive side our economy is slowing and immigration has reduced. The economy is finely balanced but the likelihood of higher inflation is a worrying sign.

You Can Still Buy a Cheap Bach.

Recently a very typical kiwi bach, close to the sea, with two bedrooms and a tractor shed sold for $55,000. It was situated on the South Wairarapa coast, a pleasant two hours drive from Wellington. The only catch being that the property was located on Maori leasehold land with an annual lease of $470 per year. It is interesting that no rates are payable as the property is unrated. The local real estate agent handling the sale, Guardian First National of Greytown said there was a lot of interest in the property.

Congratulations to Mortgage Broker of the Year

Last week in Auckland, Sky City was the venue of the annual Mortgage Brokers conference. As usual our subsidiary company General Finance actively participated and hosted a stand outlining our great range of mortgage products and how we can assist the mortgage broking fraternity. The conference went well. We would like to congratulate Phil Caldwell of Phil Caldwell Mortgages, based in the Waikato, who won the mortgage broker of the year award. The mortgage broker of the year is an impressive achievement and there were a number of strong contenders for this award. We would also like to congratulate Paul Fuller of Mortgage Link in Marlborough who won an iPod in the competition at our stand.

Our current mortgage interest rates are as follows:

Variable rate 8.65%

No Financials Home Loan 9.25

Jumbo Loan 8.65

Quick Start Home Loan 7.50

One-year fixed rate 7.93

Two-year fixed rate 7.74

Three-year fixed rate 7.54

Five-year fixed rate 7.44

Line of credit facility 8.75


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



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