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Cairns Lockie Mortgage Commentary Issue 2002/22


Cairns Lockie Mortgage Commentary

Issue 2002/22 29 November 2002

Welcome to the twenty-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 29 November 2002) the money markets were at the following levels:

Official cash rate 5.75% (unchanged) 90 day bill rate 5.91 (up from 5.90) 1 year swap rate 5.94 (up from 5.81) 3 year swap rate 6.22 (up from 6.10) 10 year bond rate 6.38 (up from 6.16) Kiwi dollar 0.4948 (down from 0.5000)

Construction, Credit Cards and Non-Conforming Enhancements

We have introduced two new products over the last week and added some enhancements to another. The first new product is our Construction Loan. This is aimed at those who have already owned a home, would like to move on to a new home and believe they will obtain the best value by building it. The product can also be used to build rental properties. We have introduced a credit card in conjunction with American Express. Our credit card does qualify for various membership rewards. With our non-conforming mortgage products we are extending the number of smaller towns we can offer these mortgages to. Please call for more details.

Household Wealth Improving

According to the latest Westpac housing savings indicator report average household wealth has increased. Due largely to recent increases in house prices in many areas our net wealth rose by $11.6 billion or by almost 6% in the past year. This is the biggest increase in six years. There has also been a surge in the investment in financial assets outside managed funds and shares. Bank deposits were up by $4.1 billion in the past year, the biggest increase in 12 years. There has been a move towards the more stable asset classes.

Emaping

Terralink has introduced a new service called Emap. It allows internet users to call up an aerial photograph of a property and its surrounding area. This will be useful for building firms and professional property investors wanting to do some detailed investigation on a property they may be purchasing. See a demo at http://www.emap.co.nz

Property in Taupo

We have been receiving a number of mortgage applications for properties in Taupo. This is an interesting market. It is a popular holiday destination attracting a number of permanent residents. Agents are reporting strong demand for houses in the $100,000 to $300,000 range. The median price is now $221,000 according to the latest figures from the Real Estate Institute. Prime luxury properties with good lake front views are selling for seven figure sums. Agents say there is a continued demand for these more expensive properties.

Our current mortgage interest rates are as follows

Variable rate 7.50%

No Financials Home Loan 8.50

Jumbo Loan 7.50

Quick Start Home Loan 6.85 (new)

One-year fixed rate 7.16 (new)
Two-year fixed rate 7.37 (new)
Three-year fixed rate 7.49 (new)
Five-year fixed rate 7.76 (new)

Line of credit facility 7.60

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