The pulse || Loan Market
New Zealand's widest range of lenders you know and trust...
Hello Reader,

We are finally saying goodbye to our office in Queenstown Centre 1st July.

We have fond memories of our wee office but now it's hello to our new branch at the Ramada Hotel, Remarkables Park. We are very excited about the move and encourage you to call by and say hello. We will be hosting an official opening Thursday 28th July from 4.45pm so please confirm if you would like to attend, drinks and nibbles.

In June we saw two things happen; the Reserve Bank left the official cash rate on hold and we saw some major banks announce significant changes in foreign lending.


In my Market Update, I explore what happened after the Reserve Bank's announcement and what economists are predicting for the future. I’ve also looked at what new foreign lending rules have come into effect.

Only this week we have posted our 3rd instalment of our personal investment renovation project journey at Bobs Cove, click here to read more

As a consequence to the recent overseas income we have taken a look at what the government and banks could consider to open another door as one closes, click here to read more.

Closer to home with talk being about properties being unaffordable I thought it would be interesting to show you how affordability is assessed by the banks and how they all arrive to a different outcome. Click here to read more

As always, I’m here to answer any questions you or your clients may have.

All the best,
Stewart Mitchell & Sam Heans
Market Update
Dollar jumps after rates hold

After the Reserve Bank left the cash rate unchanged at its June meeting, the New Zealand dollar jumped 1 per cent.

Having cut the official cash rate five times in less than a year to an historic low of 2.25 per cent, the Reserve Bank continues to leave the door open to further easing if inflation fails to pick up.

"House price inflation in Auckland and other regions is adding to financial stability concerns," governor Graeme Wheeler said in a statement.

"Auckland house prices in particular are at very high levels, and additional housing supply is needed," he said.

Many economists are still predicting that the Reserve Bank will make further cuts this year because of pressure to get back inside its 1 per cent to 3 per cent inflation band. Inflation is currently running around 0.4 per cent.

ASB Bank said financial stability concerns appear to have influenced the decision not to cut rates. "The Reserve Bank may be stalling to allow time to introduce further macro-prudential tools," ASB economists told the New Zealand Herald.

"As a result, we continue to expect the cash rate to eventually fall to 1.75 per cent, although the Reserve Bank appears very reluctant to cut rates," ASB said.

Economists at ANZ, Westpac, First NZ Capital and Deutsche Bank all thought the official cash rate would hold at 2.25 per cent in June. Interestingly, all are picking at least one further cut this year.

In its June statement, the Reserve Bank said long-term inflation expectations are well-anchored at 2 per cent and short-term inflation expectations appear to have stabilised.

“We expect inflation to strengthen reflecting the accommodative stance of monetary policy, increases in fuel and other commodity prices, an expected depreciation in the New Zealand dollar and some increase in capacity pressures,” Mr Wheeler said.

The Reserve Bank is due to meet again on 11 August.
What's trending
Changes in foreign lending

The beginning of June saw some of the major banks introduce new foreign lending rules. Now all of the major banks have changed their policies ranging from no overseas lending to various options for Australians and USA clients.

Whilst none of the major banks will offer finance for self employed Australians we have a solution. Lending is currently capped at $700,000 but we are working on having this increased to at least $1,000,000 in the near future.

We have posted several articles relating to the major banks changes in recent weeks, click here to get yourself fully up to speed. 

The landscape is most certainly changing at the moment with updates to overseas income policy weekly. Like our facebook page to keep up to date as they happen.

Now more than ever your clients need us to navigate them through the ever changing terrain. We have gone digital so text us if you would like our digital i-card to keep you and your clients informed.




 
Cash rate
2.25%
Best
Variable rate*
5.34% p.a.*
5.75% p.a.*
comparison
Best 2 year
Fixed rate*
4.19% p.a.*
4.75% p.a.*
comparison
For more information call your local expert
Stewart Mitchell & Sam Heans, Mortgage Advisers
M Stewart - +64 21 762 606 & Sam - +64 21 236 0229 | P +64 3 4411307
stewart.mitchell@loanmarket.co.nz
http://www.loanmarket.co.nz/queenstown
 
Loan Market | FSP Number: FSP191485
Update my details | Privacy Policy
* Variable rates current as at 21/6/2016 & based on Resimac. Terms and Conditions, fees and charges may apply. Rates subject to change. Approved applicants only. The comparison - rate is the median rate of all lenders as published by www.goodreturns.co.nz. Warning: This comparison rate is true only for the example given. Different term, fees or other loan amounts might result in a different comparison rate. Terms and Conditions, fees and charges may apply. The comparison rate is calculated on the basis of a $150,000 secured loan over 25 years. Warning: This comparison rate is true only for the example given. Different terms, fees or other loan amounts might result in a different comparison rate.

Fixed rates current as at 21/6/2016 Terms and based on ASB. BNZ, SBS, & Sovereign special rates. Conditions, fees and charges may apply. Rates subject to change. Approved applicants only. The comparison rate is the median rate of all lenders as published by www.goodreturns.co.nz. Warning: This comparison rate is true only for the example given. Different terms, fees or other loan amounts might result in a different comparison rate.