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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.

July's Property Gazette

Published by Scott Miller on Monday, July 14, 2014 in

Traditionally winter brings some slower months in the property market with people preferring to stay home and keep warm. Couple that with this being an election year which throws some hesitation from consumers into the mix due to uncertainty around possible policy changes affecting property, rules and regulations or interest rates from parties vying for votes, and to top it off we are in the 3rd year after a major disaster when people are doggone tired.

Despite all of the above Advanced Mortgage Solutions has certainly had our share of First Home Buyers, Home Buyers, Investors and clients re-financing from one lender to another for a variety of reasons which stands us in really good stead for when things return to “normal”.

One thing that has been really noticeable lately is the interest we have had from other complimentary businesses wanting to refer their clients to us as they know they will be looked after well and in the hands of experienced Financial Advisor’s with years and years of experience under our belt.  This is a huge compliment to us and in return we also develop stronger relationships with these complimentary businesses that can also assist our clients in one way or another as they put in place their financial goals.

If you are unsure about who to use in regard to a Lawyer, Accountant, Authorised Financial Advisor (Investments) Quantity Surveyor, Valuer or Risk Advisor we are happy to give you recommendations of a couple to choose from. Having an endorsement from those someone else has done business with is always helpful.

We have also seen plenty of movement from the banks in regard to lending above 80%. Funds are available in this space, so if you or anyone you know is sitting back thinking that it’s all too hard, it’s time to think again and come and see us.

TC3 finance approvals are now becoming slightly easier also with an approval of a fully repaired home at 84% loan to value ratio. It is still case by case however one bank is no longer interested in the “TC” rating as they have a system that will assess the land and lend accordingly. There is still most certainly more risk to the banks in lending on these properties so the paper war can be quite daunting, but slowly things are changing as homes are repaired, rebuilt and water goes under the bridge.

Finally, the biggest compliment you can give us is to refer your family & friends to Advanced Mortgage Solutions. Most people think that you use a Broker after things get broken with your own bank, but those who have used our services know it is best to come and see us first and let us do the shopping for you free of charge to make sure you get it right first time.


Current Interest Rates as at 10 July 2014


Variable               6.15%
6 Month Fixed     5.80% 
1 Year Fixed        5.85%
2 Year Fixed        6.00%
3 Year Fixed        6.25%
5 Year Fixed        6.89% 

*All rates subject to change without notice and not available to all borrowers.

Property Prices

The number of house sales around the country have started to drop, and although house prices continue to increase, the pace of this increase has certainly slowed. A couple of influencing factors are trying to push prices in the opposite direction, these include an improving market backdrop, an increasing number of immigrants arriving on our shores, and a decreasing number of houses for sale. But change is in the air, and we’re starting to see the initial signs of a cooling labour market.

The month of May saw a very slight rise in house sale numbers, but we are still way off the numbers we were seeing before the Loan to Value Ratio limits were introduced. There’s no doubt that real estate turnover has become sedated, and price gains are slowing too. However on the other side of the coin, a rise in migration is increasing demand for housing, this coupled with a smaller volume of houses for sale, means we are seeing property prices resisting the drop.

However, an increase in interest rates has taken its toll, and further increases are expected soon. First-home buyers are going to continue to find it hard to get into the market as property becomes less affordable, even more so with increasing demands for debt servicing.

There is something to look forward to however – it’s expected we’ll have an annual average GDP growth of 3.7 percent this year, with a growth of 2.9 percent estimated in 2015. But before you all get ahead of yourselves, remember there are still risks and vulnerabilities.

While global growth continues to improve, it’s still in a fragile state. Likewise, New Zealand’s commodity prices are high, but they’re starting to fall. Also, our economy is still in debt, which means our potential growth is naturally stymied. We simply don’t have the capacity to be growing at this rate for long.

One of the major contributors to our nation’s growth is expected to be the construction sector, as the rebuild in Christchurch continues, and earth-quake strengthening is implemented throughout the rest of the country.

What’s Hot

Despite a third successive increase to the Official Cash Rate (OCR), mortgage rates for a number of banks haven’t changed significantly. However, with the OCR tipped to rise even further, we wouldn’t be surprised to see rates that have resisted change go up as well. So now’s the time to look at those fixed rates, many of which sit lower than floating. Come and talk to us to see what money you can save…..


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