Issue 2016 / 18 7 October 2016
Welcome to the eighteenth fortnightly General Finance Mortgage Commentary for 2016. We aim to keep you informed on developments at General Finance Home Loans and the mortgage market in general.
The Money Market
This morning (9am on 7 October 2016) the money markets were at the following levels:
Official cash rate 2.00% (unchanged)
90 day bill rate 2.18 (down from 2.25)
1 year swap rate 2.11 (up from 2.08)
3 year swap rate 2.11 (up from 2.05)
10 year bond rate 2.51 (up from 2.45)
NZ/US dollar 0.7160 (down from 0.7315)
Money Wanted
We are a licensed deposit taker, which means that we accept investment funds from the general public. We are seeing increased lending demand, so we are looking for funds. We have increased our deposit rates by a half a percent, so our three year rate is 5.75% and our two year rate is 5.50%. These rates are attractive in the current market. The slight increase in rates will be welcome by those who require interest income to assist funding their lifestyles.
Regional Property Markets
In the past twelve months, house prices in Auckland have increased by around 15%. What gives the impression that the Auckland market is cooling, is that other centres around the country have risen by greater amounts. Hamilton is up by 27% and Tauranga by 28%. The popularly of these two centres is their close proximity to Auckland, and Tauranga continues to have an influx of retirees. Wellington is up by 21% - after a fairly stagnant market since the global financial crisis. Queenstown has regained its popularity with a 31% increase in prices over the past 12 months.
Solar and Batteries
Both solar panels and batteries, to store electricity, are on their way. The cost of making solar panels has been dropping every year and they are now much more efficient than what they were 10 years ago. It is a bit like comparing a modern cell phone with an old fashioned brick mobile phone from thirty years ago. Battery storage is not quite there yet, but it could be in three years. Once this occurs, it will be feasible for a number of households to starting generating and storing their own solar power.
Traditional Bridging
We are seeing a number of applications for traditional bridging finance, where a borrower has bought a new property but has not yet sold their existing one. Up to a few months ago, the banks and in particular, their mobile managers, were happy to approve these. Their policy has changed - many of the buying public are not aware of this, which is benefiting us. We welcome bridging type transactions.
Mortgage Interest Rates
For updated mortgage interest rates, either for new business or applicable to your existing loan, please contact your Lender (below) or the General Finance Limited Loan Administration Department.
As everyone's personal circumstances are different and the tax treatment of their affairs is always determined by their own circumstances, you should not act on any comments made in our Commentary without obtaining your own independent professional advice.
General Finance Limited is a Registered Financial Services Provider, with registration number FSP8882.