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Reserve Bank drops rates to an all time low

Written by Stuart Hawess on March 14th, 2016.      15 comments


The Reserve Bank reduced the Official Cash Rate (OCR) by 25 basis points to 2.25% 


Governor Graeme Wheeler said in a statement 


"The outlook for global growth has deteriorated since the December Monetary Policy Statement, due to weaker growth in China and other emerging markets, and slower growth in Europe. This is despite extraordinary monetary accommodation, and further declines in interest rates in several countries. Financial market volatility has increased, reflected in higher credit spreads. Commodity prices remain low.


Domestically, the dairy sector faces difficult challenges, but domestic growth is expected to be supported by strong inward migration, tourism, a pipeline of construction activity and accommodative monetary policy.


The trade-weighted exchange rate is more than 4 percent higher than projected in December, and a decline would be appropriate given the weakness in export prices.


House price inflation in Auckland has moderated in recent months, but house prices remain at high levels and additional housing supply is needed. Housing market pressures have been building in some other regions. 


There are many risks to the outlook. Internationally, these are to the downside and relate to the prospects for global growth, particularly around China, and the outlook for global financial markets. The main domestic risks relate to weakness in the dairy sector, the decline in inflation expectations, the possibility of continued high net immigration, and pressures in the housing market.


Headline inflation remains low, mostly due to continued falls in prices for fuel and other imports. Annual core inflation, which excludes the effects of transitory price movements, is higher, at 1.6 percent. 


While long-run inflation expectations are well-anchored at 2 percent, there has been a material decline in a range of inflation expectations measures.  This is a concern because it increases the risk that the decline in expectations becomes self-fulfilling and subdues future inflation outcomes.


Headline inflation is expected to move higher over 2016, but take longer to reach the target range. Monetary policy will continue to be accommodative. Further policy easing may be required to ensure that future average inflation settles near the middle of the target range. We will continue to watch closely the emerging flow of economic data."




Record-low mortgage interest rates, tight dwelling supply and booming net immigration continue to support the housing market. Nevertheless, prices remain stretched relative to both incomes and rents, particularly in our largest city, where prices have started to recede. Attention is now shifting to the regions, which are playing catch-up. Mortgage interest rates were broadly unchanged over the month, with a two-way risk profile given the influence of potential OCR cuts versus upward pressure on bank funding costs.


The economy is performing well right here and now, and we generally expect respectable growth over 2016; New Zealand is more than dairying, there are other bright spots, and the economy has better structural foundations now. But this central scenario is looking more precarious by the day, given the global scene. Risks are elevated and weaker export prices and higher global funding costs are a nasty mix for a commodity-dependent borrowing nation. It now looks like the OCR will head even lower as challenges mount.


Carded mortgage interest rates have barely budged since the end of last year. The cheapest part of the curve (particularly for lower-deposit borrowers) remains the one to two year tenors, where rates are historically very low and offer the best value. Borrowers could choose to spread fixed terms across one to two year tenors to stagger roll-overs, but we continue to have a preference for the two-year rate, which offers greater certainty at a historically low rate and offers slightly higher protection if pressures in credit markets filter through into fixed-term rates. With OCR cuts on the cards and no OCR hikes on the horizon, longer-term rates don’t offer the same value at present.


A selection of fixed rates and market conditions

Written by Stuart Hawes on January 31st, 2016.      36 comments


12 months at  4.35%

24 months at  4.29%

36 Months at  4.35%

60 Months at  5.25%

These are a selection of excellent rates and we are able to offer and structure the loans to best meet your needs and goals.  The best part is we offer a free service.


Contact  Michael or Stuart on 09 480 7980 


First cash rate decision of 2016 

The Reserve Bank of New Zealand has announced the Official Cash Rate has remained unchanged at 2.5% but indicated there may be future cuts later in the year. 


Reserve Bank Governor Graeme Wheeler said in a statement:

Uncertainty about the strength of the global economy has increased due to weaker growth in the developing world and concerns about China and other emerging markets. Prices for a range of commodities, particularly oil, remain weak. Financial market volatility has increased, and global inflation remains low. 

The domestic economy softened during the first half of 2015 driven by the lower terms of trade. However, growth is expected to increase in 2016 as a result of continued strong net immigration, tourism, a solid pipeline of construction activity, and the lift in business and consumer confidence. 

In recent weeks there has been some easing in financial conditions, as the New Zealand dollar exchange rate and market interest rates have declined. A further depreciation in the exchange rate is appropriate given the ongoing weakness in export prices. 

House price inflation in Auckland remains a financial stability risk. There are signs that the rate of increase may be moderating, but it is too early to tell. House price pressures have been building in some other regions. 

There are many risks around the outlook. These relate to the prospects for global growth, particularly around China, global financial market conditions, dairy prices, net immigration, and pressures in the housing market. 

Headline CPI inflation remains low, mainly due to falling fuel prices. However, annual core inflation, which excludes temporary price movements, is consistent with the target range at 1.6 percent. Inflation expectations remain stable. 

Headline inflation is expected to increase over 2016, but take longer to reach the target range than previously expected. Monetary policy will continue to be accommodative. Some further policy easing may be required over the coming year to ensure that future average inflation settles near the middle of the target range. We will continue to watch closely the emerging flow of economic data.


Housing Market Sentiment cools 


Auckland’s housing measures continue to show their impact, with price expectations continuing to cool, ASB’s quarterly survey of housing market sentiment reveals.

The RBNZ’s new housing measures aimed at regulating Auckland investor activity have taken some of the heat out of the market, reflected in the latest survey results.


A net 44% of survey respondents now expect house prices will increase over the next 12 months, down from the net 52% who expected price gains last quarter, and well down from the record high of 69% in the three months to July.

The fall in net house price expectations is most pronounced in Auckland, where net price gain expectations fell to 30% from 50% last quarter.

ASB chief economist Nick Tuffley says that the decline in net price expectations in the rest of the country was a little more surprising. 

“Recent trends have indicated that the Reserve Bank’s new lending measures have bought an accelerated house price growth outside of Auckland, something we had expected to see,” Tuffley says. 

“Yet this survey doesn’t show any strengthening of price expectations beyond Auckland.” 

The survey also asked its respondents whether it was a good or bad time to buy a house and found that sentiment, although still low, has improved slightly.

A net 5% of respondents said now is a bad time to buy a house. Auckland (at 22%) and Canterbury (4%) continue to be the two most pessimistic regions.

“Sentiment has become a little less pessimistic in the latest survey,” Tuffley says.

“This quarter, a net 22% of Auckland respondents regard now as a bad time to buy a house, down slightly from 25% last quarter. High house prices and the tight housing market will continue to weigh on sentiment, as may the additional tax and lending rules.”


A very Merry Christmas and a Prosperous New Year

Written by Stuart Hawes on December 16th, 2015.      34 comments

From the Team at Real Mortgages 

We will be open all over the holidays to help you with your dream home 

Please call     Michael    021 676321  or
                      Stuart       021808880

“Auckland Cooling as Summer Arrives” 

Finally, after years of double-digit price increases, Auckland's house price inflation began to cool through October and November and is expected to remain cool through the summer, unlike much of the rest of the country.
The twin-pronged attack on Auckland announced by the Reserve Bank and Government in May took more than six months to take effect, but the first statistical evidence emerged in early December of a slowdown in housing market activity.
Auckland house sales fell 13% in November in seasonally adjusted terms after a 17% fall in October, while prices fell 1.4% in November after a 4.4% fall in October, REINZ figures showed. The Government's introduction of a two year 'bright line' test for taxing the capital gains of speculators from October 1 and the Reserve Bank's introduction of tougher borrowing limits for Auckland rental property investors from November 1 had the desired effect.
Real estate agents also cited tougher capital controls in China after a currency slump there in August and the destabilizing effects of new IRD reporting rules on non-residents as factors in the slowdown in activity and a drop in auction clearance rates from over 80% to under 50%.
But the warmth is still radiating in housing markets outside of Auckland, in part due to the new Reserve Bank measures that took effect in November. The restriction on loaning more than 70% of a property's value to Auckland rental property investors encouraged many to look further afield and leverage up their Auckland gains in other cities. The Reserve Bank's less-publicised decision to loosen its 'speed limit' on high LVR borrowing outside of Auckland to 15% from 10% has perked up activity in the likes of Hamilton, Tauranga, Wellington and Dunedin.
But the jury is still out on whether Auckland's slowdown in house sales and the apparent plateauing of prices will last deep into 2016. The Reserve Bank has said it wants to wait until seeing the figures for February before making a judgement, and many real estate agents and solicitors are saying it's too early to say if the cooling will extend beyond the summer. They say overseas buyers will adjust their arrangements to comply with the new reporting rules and they also point out the new housing supply being built in Auckland is still less than two thirds of that needed to match new migration.
Over 120 new migrants arrived in Auckland every day in the second half of 2015, while new houses were only being built to house around 80 a day, and that's before reducing the existing shortfall of 25,000 houses.
Meanwhile, interest rates remain low and big bank advertised rates could fall below 4% early next year if the Reserve Bank is forced to cut the Official Cash Rate again. The Reserve Bank forecast in its December 10 Monetary Policy Statement the OCR would stay at 2.5% until at least the end of 2018, which is extraordinary when you consider that would mean it has been there for almost all of a decade since it was cut to that level in June 2009.
The Reserve Bank was criticized for not forecasting lower rates, given inflation remains well below its 1-3% target band and it actually further lowered its inflation forecast track in its December 10 statement. ASB and Westpac are forecasting it will have to cut the OCR to 2% in 2016 to account for lower domestic and global inflation pressures as real GDP growth per capita remains very weak, the New Zealand dollar remains stubbornly higher than expected and oil prices have crashed to fresh nine-year lows.
However, the economy is not falling in a hole. Tourism spending is expected to hit record highs over the summer as new direct flights arrive from Asia and America, record numbers of cruise ships visit and the currency is substantially lower than it was through most of 2014 and early 2015. Education exports and the local services sectors also remain robust. The dairy industry remains in the doldrums, but wine, horticulture and the sheep and beef sectors are in fine fettle as demand from the Asia Pacific is solid with a more fairly valued currency.
The bottom line:
    •    Auckland's housing market cooled in October and November and is set for a subdued summer. Markets outside of Auckland are heating up as Auckland investors spread their wings and interest rates remain low.
    •    The Reserve Bank cut the Official Cash Rate to 2.5% on December 10 and expects it to remain there until 2019, although some economists expect it will be forced to cut again next year, which would drive fixed mortgage rates under 4%.
    •    The economy is growing at an annual rate of around 2%, due to strong net migration, tourism spending and construction spending in Auckland. Inflation is weak and is not expected to rise much in 2016 and 2017.

Our lowest rate ever 3.99% fixed for 12 months

Written by Stuart Hawes on November 22nd, 2015.      12 comments

We are pleased to offer what could be New Zealand's lowest ever rate

3.99% fixed for 12 months 

The special rate is offered for a limited time with a few conditions

Maximum loan is 80% of property value and for owner occupied only.

Save $1000's on your mortgage

Written by Stuart Hawes on October 8th, 2015.      109 comments

Special Rate 4.39% fixed for 2 year

(if you have a 20% deposit or 20% equity and the property is your main dwelling) 

With interest rates at an all time low now is the perfect time to reduce the term of your mortgage, pay an extra $250 per month and you can save $89,000* in interest and reduce the time to being mortgage free from 25 years to 18.  
Call us now on 09 480 7980 for more details
*figures calculated on a $300,000 home loan over 25 years

Maybe Auckland is not so expensive

Written by Stuart Hawes on September 3rd, 2015.      5 comments

The unaffordability of Auckland houses is a hot topic. But are there other cities in the world that have it worse?

The best data we have comes from Demographia and it’s often used to demonstrate that Auckland has one of “the world’s least affordable” property markets. But it only ranks cities from nine countries. On a global scale*, Auckland’s unaffordability is far less severe than places with:

  • Extremely low incomes, like the Democratic Republic of Congo, where the average income is in the hundreds of dollars annually.
  • Extremely wealthy inhabitants, like Monaco, where US$1 million buys only 17m2 of luxury property, described by Forbes as “the world’s most overpriced real estate market”.
  • Extreme inequality, like Namibia, where it is estimated that fewer than 10 percent of households can afford even the lowest-priced properties.

SEE ALSO: What’s so different about Auckland?

However, when we think about Auckland’s house prices, we don’t usually want to compare them to Namibia or Monaco. We’re more interested in countries similar to our own, like Britain and Australia. This is where Demographia is useful, and the 2015 rankings look like this:

Rank: Least Affordable


Metropolitan Market

Median Multiple



Hong Kong




Vancouver, BC




Sydney, NSW




San Francisco, CA




San Jose, CA




Melbourne, VIC








San Diego, CA



New Zealand





Los Angeles, CA


This survey recorded a median Auckland house price of $613,000, with a median household income of $75,100. Since that data was collected, the median house price in Auckland has risen to $755,000 and our median household income to $85,212, giving us a current multiple of 8.86, according to this table.

For Auckland to reach a median multiple of 17, equal to Hong Kong’s, our median house price would need to increase to around $1.45 million. That’s a fairly staggering number.

All the cities at the top of this list, and others, are grappling with affordability issues similar to Auckland’s. There’s a housing affordability crisis in Sydney and Melbourne; in New York and San Francisco; and in London, a city of 8.6 million residents where only 43 houses were affordable for first-time buyers earlier this year.

Of course, the fact that some other cities are much less affordable than Auckland doesn’t make property in Auckland any cheaper. But it does point to some of the reasons why the city is expensive and some trends in the global housing marketplace:


1. Property is seen as a safe investment

In 2008 as the global financial crisis bit hard, prices dropped almost everywhere. But they quickly surged back, according to Kate Everett-Allen, a partner in residential research for Knight Frank, based in London.

“Nervous investors were trying to find a safety asset – a safe haven for their money,” she says. These buyers want certain criteria when they buy, and Auckland fits many of these criteria.


2. Global investors want to buy in the premium cities

International buyers want to put their money into cities where prices will keep increasing, says Everett-Smith. They look for:

  • A firm and stable political situation.
  • A transparent property market where they can easily track sales and prices.
  • A good legal system.
  • Good universities and schools.
  • Accessibility: ideally no more than an hour to reach the airport, the beach and/or the ski field.

Cities with these assets are also appealing to locals and new immigrants and almost all the cities at the top of the Demographia table are ranked highly by quality of living surveys, especially Vancouver, Sydney and Melbourne.

Again, Auckland follows this trend, ranked strongly as one of the world’s most liveable cities.


Vancouver is ranked highly by quality of living surveys

3. Key cities operate by different rules

“Particularly in the last few years, we’ve seen the phenomenon of key cities becoming detached from their wider housing market and operating by different rules,” says Everett-Allen. She cites London, Sydney, Melbourne, and Manhattan Island in New York as prime examples.

Again, Auckland fits the bill; if these other international cities are any indicator, there’s no pressing reason why Auckland prices will come into line with the rest of New Zealand.


4. Supply is not able to match demand

It’s no coincidence that many of the world’s most desirable, least affordable housing markets are located near the sea. These port cities, like Hong Kong, San Francisco and Sydney, are usually attractive to live in and well-connected by sea, rail and air.

The downside of those beautiful waterfronts? They restrict a city’s physical growth – in Auckland’s case, in two directions.

“The twin harbours mean Auckland is far more constrained in terms of its ability to grow out. Auckland effectively operates as if it has 1 million more people than it actually has,” says Chris Parker, Chief Economist, Policy and Planning Division at the Auckland Council, citing work done by NZIER economist Kirdan Lees.

Transport and land ‘bottlenecks’ caused by Auckland’s shape mean that the house prices and traffic congestion seen here are more typical of a city of 2.5 million residents.

In addition to geographic land restrictions, regulations on land usage limit supply and push up prices in many of these cities, including Sydney and Auckland. Parker says if you were to point to one prevailing factor as a cause for high Auckland house prices, the ability to use land “in the way people demand it” has perhaps the biggest impact.

“It is valid to criticise Council policy, but there are also other factors,” he says. “There’s a huge amount that can be done to reduce house prices. If we do a host of brave things, we can get it down considerably in the long run.”


5. Policy makers are trying to cool down hot markets

Hong Kong, Singapore, and parts of mainland China have all introduced policies designed to restrict house price growth. New York’s Mayor considering a pied-à-terre tax, the UK’s Labour Party is proposing a mansion tax, and Australia is cracking down on foreign buyers.

Our own Government and Reserve Bank have taken measures aimed at cooling the Auckland market – Everett-Allen says cooling measures, in general, do deter foreign and speculative investment.

“On a global scale we see two contrasting trends,” she says. “On the one hand increasing global wealth with an appetite to invest in property; on the other hand governments want to improve affordability for the domestic population. There’s a tussle between the two; policy makers want some revenue from [rising house prices] too.”


A good news story

Parker believes it’s possible to take Auckland from its current median multiple of nearly 9 to a median multiple of around 5 over the next few years. That would require some serious shifts in our systems, particularly in reducing land use restrictions and reducing the cost of construction.

He doesn’t want to see the price of each individual house drop, but rather increase the volume of houses at the affordable end of the market.

Greater housing density would yield more value from every piece of land in the city by building more apartments, attached townhouses and units.

Freeing up land alone won’t be enough, he adds: “Hypothetically, if we gifted land free to a builder and had no resource, compliance costs, and building costs, the average house is still 200m2 square and costs about $400,000 – 5 multiples of household income. It won’t be economically feasible to intensify and develop if we only loosen land restrictions.”

Auckland’s high house prices are a significant problem, says Parker, but they’re also a symptom of its success.

“It’s the agglomeration of lots of talented people in one place. Auckland is caught up in that globalisation story – imagine if we missed that boat, we’d be kicking ourselves. It’s a good news story, even though it creates massive challenges.”



*International surveys don’t always rank Auckland so high on the list of least affordable cities; Numbeo compiles user-contributed data and finds that Auckland is around halfway down its list of 574 cities. Numbeo ranks Hamilton as more affordable than Dunedin; local data disagree. The least affordable city is Port Moresby, Papua New Guinea, where a mortgage on a median-priced house will cost almost 900% of the median income. Hong Kong is 8th on this list.



Rental properties and interest rate outlook

Written by Stuart Hawes on July 17th, 2015.      12 comments

Rental property news

The new rules on rental properties does not become law until the 1st October this year, but some Banks have already started apply the new rules. So if you want to buy a rental property in Auckland with a 20% deposit and not 30% its best you act soon and give us a call 


A bit of good news we are now able to offer up to 30 year interest only home loans for residential investment properties, this will save you having to renew the interest only period ever 2-5 years 


More on what interest rates may be doing 


Most economists now expect three more rate cuts in quick succession on July 23, September 10 and October 29. One year fixed mortgage rates have already fallen well below 5% in anticipation of the cuts. Economists revised their views after data was published showing slumping business confidence, slower retail spending growth, low inflation pressures, falling dairy prices and a weakening Chinese economy.


The Reserve Bank is under enormous pressure to release the shackles on an economy that produced annual inflation of just 0.1% in the March quarter. The bank is supposed to keep inflation around the 2% midpoint of its 1-3% target band over the longer run and Finance Minister Bill English has started making increasingly grumpy noises about Governor Graeme Wheeler's under-performance of his Policy Targets Agreement.


"He’s been out of the zone for years now -- below the midpoint for quite a long time," English said in June. 


"He’s meant to be following the Policy Targets Agreement. That’s the bit I look at and one day somebody will start asking the Minister of Finance questions about whether he’s actually following the agreement or not," he said.


The housing market is in a much more buoyant state than the rest of the economy, at least for now and especially in Auckland. There are few signs yet that the measures announced by the Reserve Bank and Government in May to try to slow speculative and leveraged investment in Auckland by investors is having much impact. There are signs though that Auckland investors are spreading north of Orewa and South of the Bombay Hills.


REINZ reported Auckland's median house price rose NZ$6,000 in the month of June to NZ$755,000 and was up 26% from a year ago. The median price for New Zealand excluding Auckland fell NZ$9,000 in the month of June to NZ$340,000 and was unchanged from a year ago.


Sales volumes in Auckland and Canterbury fell slightly in June once adjusted for the winter slowdown, but they were up 7% in the Waikato/Bay of Plenty region and 15% in Northland as Auckland investors spread their wings.


Demand for property in Auckland remains robust, thanks to still record-high net migration and a shortage of new properties. The Productivity Commission estimated in June that Auckland's housing shortage could almost triple to 60,000 by 2020 if the current building plans and planning restrictions are left in place. 


The key things to watch in July will be the Reserve Bank's decision on July 23 and whether inflation starts to pick up after the recent rise in petrol prices and the fall in the New Zealand dollar.


The bottom line

  • Auckland's annual house price inflation rate rose over 25% in June and early signs are emerging it is spreading into Northland and Waikato/Bay of Plenty as investors look for better deals that they can still leverage up to buy without the Reserve Bank's Auckland restrictions.
  • House price inflation south of Waikato remains subdued with consumer and business confidence affected by the renewed slump in the dairy payout.
  • Most economists now expect the Reserve Bank to cut the Official Cash Rate by as much as 1% to 2.5% by the end of the year as inflation remains well below the bank's 2% target.
  • New Reserve Bank restrictions on high LVR lending in Auckland and new Government requirements for rental property investors to declare IRD numbers to LINZ kick in from October 1st

New legislation introduced to try and slow Auckland’s raising house prices and maybe slow down overseas investment

Written by stuart Hawes on May 28th, 2015.      3 comments

  • Restrict the % of loan you can get on rental properties in Auckland 

  • Allow Banks to offer more  low deposit loans 

  • “bright Line “ - Capital gains tax 

After yet more signs that prices were flying away in the City of Sails, the Reserve Bank announced new LVR restrictions on rental property investors in Auckland and the Government announced a new 'bright line' test aimed at taxing the capital gains of investors who sell within two years. Their 'pincer movement' was launched within a 10 day period and culminated in the Government's surprise pre-Budget announcement of what some are calling a 'Claytons' Capital Gains Tax.
The pressure ramped up massively on May 5. Firstly, Auckland's Barfoot and Thompson reported median house prices rose more than NZ$1,000 a day in April and that twice as many houses sold for more than NZ$1 million than sold for less than NZ$500,000. Then on the same day, Deputy Mayor Penny Hulse announced that Auckland had suspended approving new Special Housing Areas in Greenfields because it wanted the Government to help pay for water, transport and roading infrastructure.
The combination of record high net migration, restrictions on new housing supply, falling interest rates, no foreign buyer restrictions and growing speculative pressure proved too much for the Government.  We now know that within days it accelerated plans to toughen its policy for taxing capital gains by property traders.
Just over a week later, the Reserve Bank delivered on its warning when it announced rental property investors in the Auckland Council 'Super City' area would only be able to borrow up to 70% of a property's value. 

However, realizing that Auckland had accelerated away from the rest of the country, the Reserve Bank eased its 'speed limit' on lending with an LVR of over 80% to 15% of new lending from 10%. The above-80% lending limit remained at 10% for owner-occupiers in Auckland.
Prime Minister John Key told a National Party conference in Lower Hutt that rental property investors would have to declare their IRD number to Land and Information New Zealand with every sale and purchase. The IRD would then assume if they sold a property within two years that they were doing it for speculative capital gain, and would tax those capital gains at regular income tax rates.
Key denied this 'bright line' test was a type of new capital gains tax, arguing it simply toughened the existing situation by removing any uncertainty around investors who disguised their intentions when buying and flicking properties. More importantly, the Government is also forcing non-residents to open bank accounts and obtain IRD numbers here, as well as declare their passport details and their home tax details so the information can be shared with their home tax authorities. A withholding tax on realized capital gains within the two-year 'bright-line' period is planned for these non-resident investors from mid-2016.

 But will the 'pincer movement' squeeze prices or volumes?
Opinion is divided on whether the joint move to restrict lending to rental property investors and toughen the rules around taxing trading income will have much impact in Auckland specifically, and nationwide.
Some landlords and real estate agents argued it would have little impact because the measures did nothing to increase supply or restrict foreign demand. It has also done nothing to change fixed mortgage rates, which continued to fall through May in anticipation of cuts in the Official Cash Rate. Some economists are forecasting the OCR will be cut by 50 basis points to 3% as soon as the end of July.
However, the LVR restrictions may have more impact than some think, and quite quickly, just as the original October 2013 restrictions had a bigger than expected initial impact. The Reserve Bank released data in the third week of May showing investor lending in the now-banned 70-80% LVR band totaled NZ$16.3 billion nationally over the eight months to March, which was 43% of all new lending. The central bank warned banks to comply with the spirit of the new rules immediately, even though it applies from October 1.
The other point of the 'pincer' that may hit demand is the requirement non-residents declare their home country tax and passport details. The Government also warned non-residents it would share that information with their home country authorities. China is currently hunting economic fugitives who have invested overseas and has asked New Zealand, Australia and the United States to help track down both people and their assets.
The bottom line
    •    Auckland's house prices rose 18.9% in April from a year ago, but the joy was not nationwide.  Wellington prices fell 2.8% and Christchurch fell 0.6%, although the rest of the North Island was up 3.2% and the rest of the South Island was up 7.0%.
    •    Most economists now expect the Reserve Bank to cut the Official Cash Rate by as much as 0.5% to 3% by the end of the year as inflation remains well below the bank's 2% target. Average advertised one year mortgage rates fell another five basis points in May.
    •    The Reserve Bank banned Auckland rental property investors from borrowing more than 70% from October 1,         but eased its  LVR speed limits outside of Auckland.
    •    The Government imposed a 'bright line' test for taxing capital gains by investors trading property within two years.            The rule does not apply to the family home, deceased estates or relationship settlements.


Auckland Landlords facing new lending restrictions

Written by Stuart Hawes on May 12th, 2015.      5 comments

Auckland property investors now have to have a 30% deposit to buy a rental under new rules proposed by the Reserve Bank. Here is what the bank said.

LVR Restrictions

In response to the growing housing market risk in Auckland, the Reserve Bank is today announcing proposed changes to the loan-to-value ratio (LVR) policy. The policy changes, proposed to take effect from 1 October, will:

Require residential property investors in the Auckland Council area using bank loans to have a deposit of at least 30 percent.

Increase the existing speed limit for high LVR borrowing outside of Auckland from 10 to 15 percent, to reflect the more subdued housing market conditions outside of Auckland.

Retain the existing 10 percent speed limit for loans to owner-occupiers in Auckland at LVRs of greater than 80 percent.

We are pleased to welcome BNZ on board

Written by stuart Hawes on May 7th, 2015.      3 comments

We are pleased to welcome Bnz back on board 

After a number of years not dealing with Mortgage advisors we are please to welcome BNZ back on board, you never know they may kick off with a special package ( watch this space) 

SBS have withdrawn their excellent 4.99% fixed for 5 years rate with was a huge success and the best 5 year rate we have seen. Although they still offer some of the best rates on the market.

We do still have  4.99% fixed for 18 months and 5.15% fixed for two years for those wanting shorter term rates, these are only available with a 20% deposit or equity.

We are still doing a number of loans at great rates for those with only a 10% deposit so give us a call if you haven’t managed to save the full 20% 

Are house prices nationwide catching up with Auckland 

Another month passes, and another month of Auckland values rising above the rest of the country. The latest CoreLogic monthly house price index shows that values in Auckland have increased by 14.6% over the past year. That has dragged the nationwide increase up to 8.3%.

As expected, the rate of Auckland’s increase has slowed slightly from a few months ago. The increase over the past three months has been 4.6%, down from the 5.1% in the three months to January. My expectation is that rate of increase in Auckland will slow back to an annual rate of 13% to 15%.

The other main centres continue to rise more gradually. Hamilton is not yet showing any sign of following Auckland upwards. Values there have increased by only 3.3% over the past year. This is despite relatively strong sales activity in Hamilton combined with a shortage of listings. You would normally expect this to be pushing up values, especially if the anecdotes of Aucklanders now looking to Hamilton as a more affordable option were true.

Tauranga is showing more signs of increasing, up 3.9% over the past three months compared to an annual increase of only 5.8%. However, like many areas of the country, values dipped during 2014 and a recovery in recent months is more likely getting values back to where they would have been had that dip not occurred, rather than a genuine acceleration. Time will tell.

Wellington area values have stayed barely above flat, increasing 1.1% over the past year. Like Tauranga, values dipped in early 2014, then recovered in late 2014, and for the last few months have returned to near flat.

Christchurch values continue to flatten, and while values increased 4.7% over the past year, they increased only 0.3% over the past three months. Dunedin is even more subdued with an annual increase of a mere 0.6% now giving way to a 0.5% decrease over the past three months.

Another line of reasoning I have heard lately is that the rest of the country now heading into a boom to catch up to Auckland? I don’t think so.

While over the past 30 years most of the main centres have tended to all move more or less in unison, who is to say that that will continue. My belief is that Auckland values are in part increasing to reflect its major importance as a growing financial and services hub for New Zealand, with strong demand and growth that the rest of the country simply doesn’t have. A gap is forming that will now persist.


WOW... 10 Year Fixed Rate from TSB !! 5.89%

Written by Stuart Hawes on February 9th, 2015.      5 comments

Launched to entice borrowers looking for long-term debt servicing certainty. 

Is this you??


TSB Bank has launched New Zealand's first 10-year fixed-term home loan.

It is available to borrowers who have equity of at least 20%.

The launch interest rate for this 10 year loan is 5.89% pa. That is a level that is below many other bank's five-year fixed rates. 

This is New Zealand’s very first 10-year fixed home loan giving Kiwi families and property investors certainty to plan for the long-term, with a competitive interest rate.  Also to first home buyers who want to eliminate their interest rate risks when budgets are tight.

Break fees are a risk for borrowers with very long fixed mortgage contracts. TSB Bank's standard break fee policies will apply. 

Another feature that will interest borrowers is the provision to transfer the loan to another home as the borrower makes life cycle changes. This will eliminate one important break-fee risk.

TSB has also confirmed that borrowers will be able to get some early period of the loan contract interest-only. (Interest-only terms will not be available for the whole or even most of the contract.)


We would really value your thoughts on whether a 10 year fixed rate is something you’d seriously consider. Any feedback is welcome.  


Stuart Hawes at:  or Phone 021 808 880 

Monique Riley at: or Phone 021 716 957


We Pay Your Legal Fees

Written by Stuart Hawes on September 30th, 2014.      115 comments

Re-Finance your Home Loan with REAL Mortgages and on top of the Cash-back Incentive of $2500 and negotiating the best mortgage rate you can get, we will also PAY YOUR LEGAL FEES.
Meaning, you can opt to spend the Cash-back incentive on YOU and or your family.  Whether it’s a Holiday, towards a new car or even repaying your home loan faster.
We have access to a large number of Bank and lenders and will tailor a home loan to best suit your individual needs.
Terms & Conditions apply:
Minimum loan of $200,000, maximum loan is 80% of property value, subject to standard lending criteria. Legal fee payment only applicable with Sanderson & Weir Switch Me Product. 

Find out more about our Mortgage and Refinancing Services or Contact Us today on 09 480 7980

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We are pleased to announce the opening of our Auckland CBD office

Written by Stuart Hawes on November 4th, 2013.      3 comments


Welcome Home loans with only a 10% deposit

Written by Stuart Hawes on October 8th, 2013.      158 comments

With the new law changes that came in to effect on the 1st October , it has made it even harder for people to buy their first home, we are pleased to be able to offer Welcome home loans , you only need a 10 deposit. This can be your own savings , a gift from a relative or even from your kiwi saver if you qualify.

There are  strict guidelines, but these have been relaxed to 

Maximum purchase prices

Auckland $450,000
Wellington City and Queenstown lakes $425,000
Christchurch City and Selwyn District $400,000
Thames, Waimakairi, Hamilton City, Western Bay of Plenty, Lower and Upper Hutt, Kapiti Coast and Tauranga $350,000
The rest of the country $300,000

Maximum income $80,000 for one purchaser and $120,000 for 2 or more

You must have a minimum of 10% deposit and a good payment history

Contact Stuart on 09 480 7980 to see if you qualify

Low OCR may not be a sure bet: RNBZ

Written by Stuart Hawes on April 9th, 2013.      9 comments

New Zealand’s rising house prices are a risk to the economy, the Reserve Bank’s deputy governor says, and previous predictions of low interest rates for the next year or two may be revised.

Avoiding another housing boom is critical for the country’s economic and financial stability, Grant Spencer told the Employers and Manufacturers Association in Auckland today.
He said the overall gearing of New Zealand households was relatively low but a growing number had high levels of debt and interest payments consumed a large portion of their income.This made them vulnerable to interest rate movements and also put pressure on banks’ balance sheets.
Spencer said easing credit criteria and rising house prices had pushed more people into the property market. A lack of construction had meant excess demand was driving prices up, Spencer said.

“We are left with concerns that the current escalation of house prices is increasing risk in the New Zealand financial system by increasing both the probability and potential effect of a significant downward house price adjustment that could result from a future economic or financial shock.”

About Us

With 23 years experience in the mortgage brokerage industry I am committed to providing you with the highest quality professional service. 

With a reputation of offering a personalised, honest, ethical and comprehensive service I will work hard to ensure you receive the best lending package possible.  You can be confident that you will always be treated with respect, courtesy and professionalism throughout the loan process.

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54 Wellesley Street, Office B, Level 3
Auckland 1010
New Zealand

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