BORROWERS Mortgage Commentary 22 / 2012
Borrowing Costs
Application Forms
Apply Online
Type of Loans
Like a Loan?
Fortnightly Newsletters
Loan Calculators
Broker Help Zone

Contact us
Switch to Investors

Issue 2012 / 22   7 December 2012

Welcome to the twenty-second and final fortnightly General Finance Mortgage Commentary for 2012.  We aim to keep you informed on developments at General Finance Home Loans and the mortgage market in general.  

The Money Market
This morning (9 am on 7 December 2012) the money markets were at the following levels:
Official cash rate    2.50% (unchanged)
90 day bill rate       2.65 (up from 2.63)
1 year swap rate    2.62 (up from 2.57)
3 year swap rate    2.80 (unchanged)
10 year bond rate   3.56 (up from 3.27)
Kiwi dollar         0.8314 (up from 0.8165) 

2012 in Review
This year has been similar, in many ways, to 2011.  One positive area was on the deposit side.  More people are investing with us and we are seeing a healthy inflow of funds returning. This is to be expected, as investors can have more confidence in the finance company sector, as we are operating under a much tighter regulatory regime. It is giving us more funds to lend, which is good for those wanting to borrow. It also allows us to extend our mortgage product range. The lending side is still a little quieter than we would like but we believe that the active Auckland property market in 2012 will encourage more investors, housing renovators and builders to re-enter the market in 2013 

2013 Crystal Ball
While it is always hard to predict the future, being in the finance sector allows us to spot certain economic trends.  We see things continuing in pretty much the same way as they did in 2012. The low interest regime will continue throughout 2013. This is not only apparent in the mortgage market, but also evident in the corporate and Government sectors with bond investors accepting lower yields. Unemployment will remain at current levels or may get a little worse, until we start to see some real growth occurring. Our dollar will remain at the current levels for some time, making it difficult for our exporters.  We expect further Government cost cutting and a reduction in state employee numbers. Next year will be the only year the Government can do this, as in the following year there will be an election. Overseas, we will be focussing again on the debt issues in Europe. Next year is likely to be a repeat of 2012. 

Heritage Protection
The Auckland City Council is looking at putting a blanket heritage order on all houses built before 1940. This has serious implications.  It deprives home owners the right to do as the wish with their own properties. It can affect values. There are a number of houses built during this period which have seen better days - they have deferred maintenance issues, are in need modernising and some are just not suited for the 21st century. Most will agree, we do need some heritage controls, safe guarding historic and unique properties. But there are better ways than just a blanket date.  May be the heritage order should be based by suburb, by street or type of house. A little bit more thought is required. 

Still a Good Place to be Born
Recently the Economist magazine completed a survey of the best countries in which to be born. A variety of indicators were used, such as levels of crime, trust in public institutions, family health, life expectancies etc. Top of the list wasSwitzerland, followed by Australia and then a number of Scandinavian countries. The good news was that New Zealand ranked eighth out of the eighty in the survey. Nigerian ranked the lowest.  New Zealand did well, considering countries such as the UK ranked number twenty-seven, France at twenty-six and Germany at sixteenth. Even the USA was at number fifteen. There are number of surveys being conducted such as the best cities/ countries to live in, best places to do business, to bring up children etc.  It is great to see New Zealand in the top 10% of a number of these surveys.

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.