INDEPENDENT NEWS

The Money Market

Published: Thu 31 Oct 2002 05:59 PM
The Money Market
This evening (6pm on 31 October 2002) the money markets were at the following levels:
Official cash rate 5.75% (unchanged)
90 day bill rate 5.93 (up from 5.91)
1 year swap rate 5.90 (down from 5.98)
3 year swap rate 6.18 (down from 6.37)
10 year bond rate 6.26 (down from 6.46)
Kiwi dollar 0.4830 (up from 0.4810)
Council Valuations
In 1998 City Council Valuations (including all territorial authorities) replaced the old Government Valuations. Government Valuations were completed on a three yearly cycle. All territorial authorities have to complete a valuation for rating purposes at least once every three years. Some (including the Wellington City Council) are doing them more often. There is no requirement for all rating valuations to be done at the same time. North Shore City has already sent theirs out. For Auckland City, the rating valuations will be sent out in the second week of November. There may be a few surprises as house prices in the region have not increased in a uniform manner. There is expected to be some strong price increases in the Gulf islands such as Waiheke Island and the central suburbs including Epsom and Mt Eden and the eastern suburbs such as Remuera and St Heliers.
Low Housing Stock Availability May Be Affecting Prices
An interesting trend is emerging in the residential property market. Nation-wide house sales volumes for September were slightly down at 7,943 compared with 8,036 in August. While the residential property market is active in a number of regions, agents are reporting they have considerably more buyers than available houses to sell. Stock is really short. More real estate literature being dropped in mailboxes and agents are having to make more direct approaches.
For more stock to become available, prices will have to increase further.
Capital Growth
High prices for residential properties are normally associated with the Auckland market. For some time Oriental Parade in Wellington has been known as millionaires row. Recently a property located at 26 Oriental Parade was sold for between $2.5 - $3.0 million. We are aware of two other properties located at 290 and 300 Oriental Parade that sold for over $2 million dollars. There are numerous attractions to this area including closeness to the CBD, good shopping, wonderful views over the harbour and being sheltered from those southerly winds.
The median price for houses in Wellington is now $204,000, up from $200,000 in August. This is well up from $185,000 in August 2000 and $149,000 for the same month in 1997.
Our No-Financials Product is a Winner
This is a great mortgage product and as a result we are keen to talk about its benefits. It covers the self-employed, including small business people, tradesman, contractors, real estate agents, contractors, and consultants. We can lend up to 80% of the value of your property with the only proof of income being a declaration of income signed by the borrower. This type of mortgage can be applied to rental properties as well. If you are currently self employed with accounts not yet available and you see a rental property we can likely assist. If you have equity in your existing residence we can 100% finance your investment property as well.
Our current mortgage interest rates are as follows
Variable rate 7.50%
No Financials Home Loan 8.50
Quick Start Home Loan 6.90 (new)
One-year fixed rate 7.21 (new)
Two-year fixed rate 7.37 (new)
Three-year fixed rate 7.54 (new)
Five-year fixed rate 7.86 (new)
Line of credit facility 7.60

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