Cairns Lockie Mortgage Commentary
Cairns Lockie Mortgage Commentary
Issue 2009 / 8 22 May 2009
Welcome to the eighth fortnightly Cairns Lockie Mortgage Commentary for 2009. We aim to keep you informed on developments at Cairns Lockie, Home Loans 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 (8 am on 22 May 2009) the money markets were at the following levels:
Official cash rate 2.50% (unchanged)
90 day bill rate 2.76 (down from 2.90)
1 year swap rate 2.91 (down from 3.00)
3 year swap rate 4.10 (down from 4.17)
10 year bond rate 5.52 (down from 5.67)
Kiwi dollar 0.6093 (up from 0.5870)
Last week the Australian Government presented their budget and next Thursday we will do the same. Australia will operate a large deficit for a number of years, to fund its various initiatives. The underlying deficit for next year will be $57.6 billion which is nearly 5% of their GDP. A major thrust of the budget was infrastructure spending with a big emphasis on metro rail, then on roads and ports. The first home owners grant of up to $14,000 remains in place. There is a large focus on improving Australia’s defence which is unlikely to be in our budget. One negative aspect of their budget, which has drawn criticism, is that their superannuation eligibility age will be raised progressively from the current 65 to 67 by 2017.
Tunnel in Mt Albert/ Waterview
It is interesting the coverage that the Mt Albert by-election is having. The most contentious issue is scaping part of the proposed tunnel and implementing a cheaper motorway option which will require around 350 houses to be knocked down. Given that we are in a recession, and heavy contractors are looking for projects with infrastructural projects being good at creating employment opportunities, one would have thought that the tunnel option would be a no brainer. This country has several cases of communities being partially destroyed by large roading projects. A shocking case in point was the partial destruction of historic Thorndon in Wellington in the 1960's. Given the huge advances in tunnelling technology over the past fifteen years, this has to be a better option than driving straight through our historic suburbs and destroying more of our urban environment.
House Sales are More Stable
In our last newsletter we reported on the March sales figures and commented that April’s figures will be pretty good as well. This has been confirmed by the Real Estate Institute of New Zealand. In April there were 6,210 house sales - slightly down on March at 6,694 but well up on April the previous year when only 4,450 properties sold. This was expected, as April is one day shorter than March but Easter fell in the middle of the month. The breakdown of house sales by pricing brands show that 64% of house occurred under $400,000, a further 24% in the $400 - $599,999 bracket, 10% in $600 - $1,000,000 price range and 2% over a $1,000,000. May's figures will be interesting as this will confirm whether or not there is an upward trend.
Settling your Mortgage if You Are Unavailable
If you have to settle a mortgage when you are not physically available (where your settlement date has been delayed or while you are away on holiday) it can still be done without you being physically present. What is required is a "power of attorney" and your solicitor will be able to complete all the necessary paperwork. You can make anyone over the age of 18, with a sound mind, your attorney, but it is wise to choose someone who is familiar with this document and who will be responsible with this power. Often the best person is your solicitor or accountant. They understand these things and have no doubt done them before.
Mortgage Interest Rates
For updated mortgage interest rates, either for new business or applicable to your existing loan, please contact your Lender (below) or the Cairns Lockie Limited Loan Administration Department (below).