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Mortgage Advice Blog

Get the latest news and tips about mortgage finance and the property market. Scott Miller, mortgage broker from Advanced Mortgage Solutions comments on housing and lending.

~December’s Newsletter

Published by Scott Miller on Thursday, December 10, 2009 in
Blog

Welcome to my festive season’s newsletter.

I wish you and your family a very Merry Christmas and a Happy New Year.

Colin, I thought I would take this opportunity to recap on events that have taken place over the last year, if you are anything like me I just cannot work out how the year went by so quickly.

2009 - A random review
The big events of 2009 are usually well covered in the Christmas newspapers. I have picked a few which may not make the papers. 

  • The All Whites secured their place at the World Cup in South Africa in 2010. Brilliant!
  • It turns out that most investors lost money without the help of financial advisers. 
  • The housing market held firm in the face of some dire predictions.
  • The Silver Ferns won the inaugural World Netball Series in Manchester, beating Jamaica in the final.
  • The Spring Boks took the Tri Nations but we held on to the Bledisloe Cup.
  • Michael Jackson passed away.
  • The associated persons ruling came into effect.
  • Dr Bollard held his nerve and the OCR remains at record low levels and, for the first time in many years, New Zealand has a normal interest rates yield curve. 
  • BNZ got rid of it’s mobile mortgage managers, encouraging its customers to return to its branches.
  • Water was found on the moon.
  • I became an uncle for the first time.

There is no doubt that 2009 was a hard year, and most of hardship was a result of the world’s financial meltdown. This placed huge pressure on employers, lenders, government, and the family unit. Although some pain remains, there are signs that the worst is behind us and nowhere can this be seen more graphically than in the housing market. In New Zealand purchasing houses remains the single biggest ticket item. On average most of us only do this 2-4 times in our lives.

Recently house prices have made a remarkable recovery in their value. The last peak in house prices was in November 2007 and has been used as the benchmark to measure house prices ever since. Part of the reason for these increases in house prices have of course been the low mortgage interest rates we have enjoyed in 2009. Although the longer term rates (3, 4, 5 year) have ballooned above their 10 year averages, short term rates remain low. Today’s announcement from Dr Bollard came as no surprise when he left the OCR unchanged.

Bank

Term

%

ANZ

6 Mths

5.99

ASB

6 Mths

6.00

BNZ

6 Mths

5.75

Kiwibank

6 Mths

5.75

National

6 Mths

5.70

Westpac

6 Mths

5.49

 What will 2010 bring?

  • · The OCR is expected to remain unchanged until the middle of 2010.
  • · House prices will continue to improve but perhaps at a slower rate.
  • · Interest rates will continue to increase.
  • · Mortgagee sales will remain at higher than normal levels.
  • · New Zealand’s economy will continue to recover.
  • · Worldwide economic improvement.

Tip of the Month

AMS is open over the festive season so please feel free to contact me over the break with any of your finance needs or questions.

Look out for my January newsletter as it will have a major announcement. AMS is going through a number of existing changes that I cannot wait to share with you.


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