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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.

Property Gazette - February

Published by Scott Miller on Monday, February 06, 2012 in

        

    Welcome to February's edition of AMS's Property Gazette.

I would like to start by announcing the Advanced Mortgage Solutions has moved! We have now opened an office at 6 Burdale Street, Riccarton Christchurch.

Please click here to see our new address on Google Maps.

The process of finding an office has been a while in the making as the recent earthquakes in Christchurch made it harder to find suitable office space. Please feel free to drop by if you are in the area - I would love to show you around.

  What's happening in February?

Current interest Rates as at 1 February 2012

  Variable                 5.60%  
6 Month Fixed         5.45%
1 Year Fixed            5.55%
2 Year Fixed            5.65%
3 Year Fixed            6.10%
5 Year Fixed            6.90%

Interest Rate Outlook

It would appear that 2012 has kicked off with some continued momentum from late last year as have noticed a broadening trend of being a lot busier over the last 4-5 months.

December continued on the strong trend of November in house sales, with consecutive strong months seeing increases in sales of circa 5% each month. It would appear the extended period of historic low interest rates is finally starting to push some confidence across to property purchases. This, together with the nation waking from its rugby world cup hangover, is driving the strongest level of activity we have seen for a couple of years now.


The Real Estate market is still being held back though by a genuine lack of quality stock across the country (with a particular emphasis in Christchurch) and this is seeing the average days to sell a house drop (now down to 39 days). We believe this will continue to ease further over coming months, giving the market some momentum.

Approximately 60% of Kiwis are currently sitting on a variable rate mortgage, which gives the Reserve Bank great confidence that they can actually influence consumer behaviour with interest rate movements if and when they have to. That said, they have signalled that they do not expect to have to push interest rates up until the 2nd half of this year.

As the 1 & 2 year rates fell in the latter part of 2011, we now see this flattening from the variable rate through to the 2 year fixed rate. As such there is little to no difference between the current variable and 2 year fixed rates. Given that we anticipate small increase in variable money later this year, the current 2 year fixed rate holds appeal for us as a sound borrowing strategy - or for the slightly more adventurous splitting the funding into 2 accounts of part 2 year fixed and part variable will ensure not missing out on any variable rate discounts if they were to come on offer. All in all, quite an attractive time to borrow money!          

What's Hot

2012 has kicked off right where 2011 finished. Competition is hot among the banks for business and right now the rate they are all sharpening is the 2 year fixed. We are seeing cases of 2 year rates being offered as low as 5.49% - that is cheap money! Refer your clients now!


Deal of the Month

Last month we helped a more unusual client request, coming from a 70 year old gent buying a modern retirement unit. He was short of the full purchase price and we were able to fund him on an equity release loan for the shortfall, not requiring any monthly payments - call us we deliver!

 


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