Issue 2017 / 12 14 July 2017
Welcome to the twelfth fortnightly General Finance Mortgage Commentary for 2017. We aim to keep you informed on developments at General Finance Home Loans and the mortgage market in general.
The Money Market
This morning (10 am on 13 July 2017) the money markets were at the following levels:
Official cash rate 1.75% (unchanged)
90 day bill rate 1.97 (unchanged)
1 year swap rate 2.05 (down from 2.07)
3 year swap rate 2.49 (down from 2.52)
10 year bond rate 2.98 (up from 2.96)
NZ/US dollar 0.7258 (down from 0.7290)
A Good Time to Look at Property
As a number of commentators have noted, the property market, particularly in Auckland, has slowed. Agents have more listings and open homes are not quite so crowded, therefore it is possible to have a reasonable conversation with listing agents. This is now an opportune time, particularly for first home buyers, to go out and look at the market. They can take their time, ask more questions and maybe put in an offer which could just be accepted - this would not have been possible six or twelve months ago.
The P Issue Again
This is an increasing problem, particularly for those letting properties. The Government is seeking to clarify what is, and what is not, an acceptable level of P, when they pass the Residential Tenancies Amendment Bill No 2. This Bill is aiming to establish the safe level for P contamination (set at 1.5 micrograms per 100cm2). If a property is below this level it is deemed safe. The new Bill will allow landlords to test for P as well. This new Bill will assist with this increasing problem.
Rest Homes are Positive
In most major urban areas, in New Zealand, there is a shortage of housing stock. On top of this, we are seeing the rapid growth in the building of retirement complexes, by companies such as Ryman and Summerset. This is actually good for the housing market. An older person is often leaving the former family home, of three or four bedrooms, and is relocating to a higher density retirement home. This allows the former home to be recycled to another family. Retirement villages tend to be highly concentrated and are not big users of land. They are not taking away much land from potential home builders. The retirement industry, without any Government incentives, is increasing supply and assisting with the easing of the overall housing shortage.
Tax Payments
Currently it is tax time and for a number of people their returns were due on 7 July. We are happy to lend to those who have tax to pay. Most often, we can do it as a second mortgage, for a period of six to twelve months. We find that the main stream lenders are not that keen to lend for tax purposes but are more than happy to refinance second mortgages from finance companies.
Funds are Required
General Finance is a deposit taker and we are looking for funds. Our minimum deposit is $5,000 and for those who invest $10,000 or more, we are able to pay our interest monthly. This is great for investors with various outgoings to be paid on a monthly basis. It is just like receiving your wages or salary. On top of that for our three year term, we are offering an attractive rate of 5.75%.
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.