Cairns Lockie Mortgage Commentary
10 December 2004
Welcome to the twenty-third and final Cairns Lockie Mortgage Commentary for 2004. 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 (8am on 10 Dec 2004) the money markets were at the following levels:
Official cash rate 6.50% (unchanged) 90 day bill rate 6.70 (down from 6.71) 1 year swap rate 6.66
(down from 6.70) 3 year swap rate 6.57 (down from 6.60) 10 year bond rate 5.97 (down from 6.00) Kiwi dollar
0.7130 (up from 0.7110)
And Now We Are Six
This year has been another active one for us at Cairns Lockie. We have continued to grow strongly. Amongst our
highlights "
we have continued to push home ownership as a desirable aspiration, with our 100% No Deposit Home Loan proving
popular. "
we have added another wholesale funder, Origin Mortgage Management Limited, which is a wholly owned subsidiary
of the ANZ Bank. This has enabled us to increase our product offering. "
we are one of the few players in the market to offer a ten year interest-only mortgage which has proved popular
with property investors.
" we have become a deposit taker in our own right, with General Finance Limited issuing a prospectus to raise
secured retail deposit funds.
Our 2005 Crystal Ball
We believe that interest rates have now peaked but any decreases are unlikely to occur until late next year. Interest
rates pretty well reflect the state of the economy. Currently we have a robust economy, low unemployment plus a strong
currency. Any weakening of the economy will see lower interest rates after a lag period. We believe the housing market
will be mixed over the coming year. There are a number of apartments currently being completed so we see some softening
here, particularly in Auckland. Some residential landlords are telling us it is now getting harder to let their
properties. This is due to more stock coming on to the market and lower immigration. We see a continued demand for well
located owner occupied dwellings in prime suburbs as well as coastal properties.
Cannot Save a Deposit but Want a Home?
Over the past fifteen years and going against overseas trends, our home ownership rates has decreased from around 74% to
the current level of 67%. Our 100% Home Loan is helping counter this trend. It is ideal for those in steady employment
and want to commence home ownership but who are finding it increasingly more difficult to save that deposit. Commencing
from this week we have increased our first mortgage limit from the current $300,000 to $400,000, as well as offering
greater fixed rate choices. This should widen the appeal of this product.
Snakes and Ladders
The Reserve Bank has recently released a booklet called Snakes and Ladders, a guide to risk for savers and investors,
written by the well known financial writer Mary Holm. This is a timely publication as there is a lot of discussion in
the media about retirement savings. It covers the many facets on this subject. This can be a confusing area but Mary
Holm has written it in a straight forward manner, in a form that is easy to comprehend. It is particularly relevant for
those who have not yet started to save or those that have a savings plan underway. It takes a non-partisan approach and
what's more there is no charge for this 48 page booklet. All you have to do is write to the Reserve Bank of New Zealand
at P O Box 2498, Wellington or email them on info@rbnz.govt.nz
Deposit Rates
We are currently looking for funds for our finance company, General Finance Limited. These will be secured by first
ranking debenture. Our top rate is 9.0% for a two year term. We do offer a range of terms from 6 months through to 5
years. Our minimum deposit is $5000. If you require an investment statement and/or a prospectus please do not hesitate
to contact us.
This is our last newsletter for the year. We trust you have found them useful. We would like to wish our subscribers,
introducers and clients a very Merry Christmas and all the best for 2005. Our first newsletter in the new year will be
on 11 February 2005
Our current mortgage interest rates are as follows
Variable rate 8.40%
No Financials Home Loan 9.40
Jumbo Loan 8.40
Quick Start Home Loan 7.45
One-year fixed rate 7.76 Two-year fixed rate 7.77 Three-year fixed rate 7.79
Five-year fixed rate 7.76
Line of credit facility 8.50
Regards William Cairns James Lockie
ENDS