Issue 2000/24 15 December 2000
Welcome to the twenty-fourth and final issue of the Cairns Lockie Mortgage Commentary for 2000. 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 15 December) the money markets were at the following levels:
Official cash rate 6.50% (unchanged from last fortnight) 90 day bill rate 6.75 (up from 6.66) 1 year swap
rate 6.84 (unchanged) 3 year swap rate 6.72 (down from 7.04) 10 year bond rate 6.16 (down from 6.60) Kiwi
dollar 0.4220 (up from 0.3998)
Economic Outlook Looking Rosy - It Must Be Christmas
Last week the Governor of the Reserve Bank, Don Brash, reviewed the Official Cash Rate and left it unchanged at 6.50%.
At the same time he made a number of comments on the economy. These were favourable and next year looks considerably
more positive than 2000. In summary he said: -Inflation will peak soon and the one-offs we have had this year such as
petrol price rises and the increase in tobacco prices will wear off. - Business confidence is returning. - The lower
dollar is helping our exporters. This is expected to continue. - Our trading partners are experiencing strong growth
which is assisting our exporters. - Our current account deficit, which is high by international standards, is expected
to decline (i.e. improve). - Unemployment is at a twelve year low. There are still people wanting to work, hence there
is little likelihood of this feeding into inflation in the short term.
2000 - The Mortgage Market in Review
The mortgage market over the past decade has seen numerous changes. The last year was no exception. These changes have
all been positive, particularly for the consumer. The changes have included - More competition. We have seen the
establishment of the non-bank mortgage sector. These newer players have offered a variety of new products and
competitive rates. - Product innovation. Several players have introduced highly attractive one-year fixed products. One
lender has introduced loyalty points; others are offering discounts if you bundle all your financial requirements
(credit card, mortgages and insurance). We expect further innovations, in this area, next year. - Internet banking. Some
lenders are allowing internet access to account information and the ability to move funds in and out of your mortgage
accounts. - More information. Several lenders are providing information to assist borrowers on how to save money on
their mortgages, how to consolidate expensive debt and to be debt free in a shorter period of time. Cairns Lockie has
been at the forefront of all of the above.
Regional Round Up -Wellington
This year we have seen a pretty flat housing market both in terms of price movement and sales volume. One exception to
this appears to be Wellington. Although sales volumes are down (like the rest of the country), house prices in
Wellington have increased by nearly 10% on average over the past twelve months. This was confirmed with the recent
Wellington City Council rating valuations showing an average increase of 4.5%. The main areas of demand include the
quality suburbs of Khandallah, Seatoun, Central Lower Hutt and Plimmerton.
The Emortgage Newsletter is Having A Christmas Break
This is the last newsletter for the year. We commenced writing them on 5 February 1999 and they have appeared
fortnightly over the past two years. The first one for the New Year will be on 2 February 2001. We would like to thank
you, for your continued support and wish our clients, readers and supporters a very Merry Christmas and all the best for
the next year.
Our current mortgage interest rates are as follows
Variable rate 8.25%
Quick Start Home Loan 7.75 One-year fixed rate 8.05 (new) Two-year fixed rate 8.05
(new) Three-year fixed rate 8.05 (new) Five-year fixed rate 8.15 (new)
Line of credit facility 8.60
Regards William Cairns James Lockie
Cairns Lockie Limited PO Box 74-212, Market Road, Auckland Telephone (09) 525 9711 Facsimile (09) 579 7795 Website
http://www.emortgage.co.nz Email mailto:wcairns@emortgage.co.nz mailto:jlockie@emortgage.co.nz
mailto:gslade@emortgage.co.nz mailto:sgasson@emortgage.co.nz mailto:plange@emortgage.co.nz