BORROWERS Mortgage Commentary 14 / 2014
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General Finance Mortgage Commentary

Issue 2014 / 14   15 August 2014

Welcome to the fourteenth fortnightly General Finance Mortgage Commentary for 2014.  We aim to keep you informed on developments at General Finance Home Loans and the mortgage market in general. 

The Money Market
This afternoon (3.00 pm on 14 August 2014) the money markets were at the following levels:
Official cash rate    3.50% (unchanged)
90 day bill rate       3.69 (down from 3.70)
1 year swap rate    3.85 (down from 3.89)
3 year swap rate    4.20 (down from 4.25)
10 year bond rate   4.16 (down from 4.27)
NZ/US dollar      0.8465 (down from 0.8505)

Property Market
The majority of main centres are continuing to see some growth in property values. Predictably it is Auckland (with its continued growth) and Christchurch (stabilising after the earthquakes) that are seeing the strongest growth. Nationwide, according to Quotable Value (QV), properties have increased by 7.6% over the past year. This is now 15.6% above the 2007 peak. In the last year the Auckland increase was 11.7% with Christchurch at 6.5%. Despite this, there are provincial towns that have experienced no growth in prices over the last year, including Rotorua, Hastings and Palmerston North. Of the major regions Wellington was the most sluggish with growth of 1.2%.

LVR Restrictions May Be Causing Hardships
When a Government brings in a blunt control, such as restricting lending over 80%, there are often unforeseen consequences. One of them is that there are a number of potential home owners who have to rent for longer periods and may have to move between rental properties as landlords rationalise their portfolios. In extreme cases couples may have to delay having a family as they are not settled into their own homes. Targeting those with sub 20% deposits, which are mainly first home buyers, is a harsh way of addressing a largely Auckland issue. This group of buyers, who tend to be younger, should be actively encouraged into home ownership, rather than having it made more difficult for them.    

Auckland City Council Valuations
Currently the Auckland Council is carrying out its three yearly property revaluations.  All types of properties are included in this revaluation, not just residential dwellings.  This will largely be good news with areas such as Grey Lyn, Mangere Bridge, and New Lynn having risen well in excess of 30%. The rises seem to be more modest in our offshore islands such as Waiheke and Kawau islands. The council revaluations will not influence the rates you have to pay this year but they will next year.  Property owners will receive confirmation of their properties new values during November of this year. 

New Prospectus
Our new prospectus is now available in its hard copy form. It is a full disclosure document and explains what we are doing as well as our financial results.  For us it is pretty much steady as she goes and we are looking to expand our business on an incremental basis. We are happy for people to ask us for copies of our prospectus and to pass them on to likely investors.  Our rates are of course above those being offered at the trading banks. Our prospectus is also available on our website at

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.