Cairns Lockie Mortgage Commentary
Welcome to the fifteenth issue of the Cairns Lockie Mortgage Commentary. 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 (and our second gnarly mortgage calculator at http://www.emortgage.co.nz/calculator.htm)
The Money Market
This morning (8am on 20 August) the money markets are at the following levels:
Official cash
rate 4.50%
90 day bill 4.75
1 year swap
rate 5.53
3 year swap rate 7.08
10 year
bond 6.93
Kiwi dollar 0.5295
Property Prices
Bounce Back
According to Quotable Value New Zealand, most
areas of the country have seen a firming in residential
property values. Prices have, on average, increased by 2.7%
in the six months to June 1999. This was after falling 3.7%
in the six months to December 1998. The Wellington area has
lead the inc
rease followed by Auckland. The worst
performing areas were in the deep south, namely Dunedin and
Invercargill. The house price changes for the six-month
period to the end of June are detailed
below:
Index % change
Porirua 6.5
Upper
Hutt 6.1
Lower
Hutt 4.3
Wellington 4.3
North
Shore 4.0
Auckland 3.4
Franklin 3.4
Manakau 3.2
New
Plymouth 2.5
Palmerston
North 2.4
Waitakere 2.3
Whangarei 1.9
Nelson 1.7
Christchurch 1.7
Napier 1.6
Hamilton 0.8
Dunedin
0.8
Invercargill -0.8
House Sales Volumes
Improve
House sales volumes are showing a large improvement on last year. Barfoot and Thompson have recently published their figures on housing sales confirming this trend. They show:
Sales July 1999 621
properties $179,920,759
Sales July 1998 437
properties $115,073,940
12 months to July 1999 7179
properties $2,050,205,085
12 months to July 1998 5639
properties $1,605,538,554
Fixed Rates Move
Over
the past week all financial institutions have increased
their fixed mortgage interest rates. The increases have
been most marked for the longer dated rates, i.e. five-year
fixed. These rates are now 1.0% higher than they were
twelve months ago. At the other end, floating rates have
remain
ed virtually unchanged over the same time period.
Cairns Lockie Limited, over the last 6 months, has favoured
the floating rate, when asked for rate recommendations by
clients. If you have a larger mortgage and feel you must
fix, we suggest you fix only part of it. We have seen many
instances
of people fixing for long periods at higher
rates only to see their circumstances change and then be
faced with large penalties, to alter their banking
arrangements.
Our current interest rates are as follows
Variable rate 5.85%
Two-year fixed
rate 7.20
Three-year fixed rate 7.80
Five-year fixed
rate 8.40
Line of credit facility 6.25
Equity
accelerator 6.25