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Hot rates and market updates
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. 

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A very Merry Christmas and a prosperous New Year 

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 for the full article visit
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Save $1000's in interest on your mortgage
Special Rate 5.39% 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
Spring has sprung
This spring sales season is shaping up as a crucial one for New Zealand's real estate market, with some are saying a turning point is approaching, or at least that headwinds are gathering on the horizon.
Sales volumes surged through the winter into the warmer months as listings rose and demand from ( for the full article visit the link below)
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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

For the full article please visit
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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
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The OCR comes down and so do the fixed rate 

With  the recent drop in the OCR the floating rates have been lowered by 0.25% across the board.  How ever a number have lenders have now broken the 5% mark on a variety  of fixed rates.
We are pleased to be able to offer 4.99% fixed for 6 , 12 , 18 and even 24 months.

These are excellent short term fixed rates and we will even pay your reasonable legal fees on loans over $200,000

Please contact Stuart on 09 480 7980 or  for more information
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New legislation introduced to try and slow Auckland’s raising house prices and maybe slow down overseas investment

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.
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Auckland landlords face new lending restrictions

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.
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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.
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Where to with house prices and interest rates
If only we had a Crystal ball, but some interesting data and possible changes to lending rules
The average house price across the Auckland region hit a record high NZ$776,729 and the 1,597 properties sold by Barfoot and Thompson in March was a record high and up 15% from a year ago.
Prices in Auckland are rising at double-digit rates on an annualised basis and there is little on the immediate horizon to suggest any slowdown. Net migration is at record highs, longer term fixed mortgage rates are still edging lower and employment and income growth continues to rollick along at over 3%.
Also, less than 8,000 housing consents were granted in Auckland in the last 12 months, which is below the 13,000 seen necessary to keep up with record net migration into Auckland, which is running at over 25,000 annually. The Government has estimated the shortage in Auckland is likely to be around 25,000 dwellings by the end of this year.
However, it's not all one-way traffic in Auckland's housing market.
The Reserve Bank of New Zealand is preparing to force banks to put aside more capital to back loans to rental property investors. That could force banks to charge higher interest rates to landlords than to owner-occupiers, although the jury is out on that because the banks will control how their extra costs are spread across their customers – not the Reserve Bank. They could choose to subsidise landlords by charging higher interest rates for business and other borrowers, just as they subsidise fixed rate lending by overcharging for floating rate lending.
This new capital rule could apply from as early as July 1. Those hoping for a relaxation of the Reserve Bank's other 'Macro-Prudential' tool – the high LVR speed limit – will also have to wait for a lot longer. Most think it will stay in place for the forseeable future.
One thing borrowers won't have to worry too much about though over the next couple of years is rising interest rates, at least according to the Reserve Bank's own forecasts for short term interest rates. It expects them not to change until at least the first quarter of 2017.
And the rest of the country?
Economic and housing market life outside of Auckland isn't quite so rosy. House price inflation in most places south and north of Auckland is running in low single digit territory, with some of the smaller provincial cities flat to lower.
Hopes that dairy prices would rebound were dashed in early April after two of the worst auctions in years. Demand from China has yet to recover and European dairy farmers were allowed to export their socks off from April 1 because of the end of export quotas. Russia's ban on European cheese imports has also freed up a lot of European milk to be dried into milk powder and exported into markets previously dominated by New Zealand.
Forestry-reliant regions such as Northland, the East Coast and Nelson/Marlborough are is also struggling because of a slow-down in construction sector in China, given many of New Zealand's logs are sawn up into boxing for setting concrete. This slowdown in China is also hitting Australia because iron ore prices have slumped to 10-year lows. The irony is that this Australian weakness is one of the factors driving the New Zealand dollar to almost parity with the Aussie dollar. That is great for households in the big cities planning shopping trips and winter holidays in Australia, but is tough for the regions and manufacturers.
The other irony of this strong New Zealand dollar -- it is also at record highs vs the euro -- helps drive down imported prices, which increases the chances the Reserve Bank may have to cut its Official Cash Rate (OCR). Governor Graeme Wheeler has also said he won't take Auckland's housing boom into account when making his OCR decisions, given he wants to use his other 'Macro-Prudential' tools to do that. So Auckland's hot market wouldn't stop a rate cut.
The bottom line
Auckland house prices are rollicking along at double-digit inflation rates, while the rest of the country is bumbling along at low single-digit rates.
The Reserve Bank won't be hiking the OCR any time soon for either inflation or Auckland house price reasons. It may even cut the OCR later in 2015 if inflation keeps being surprisingly low.
The Reserve Bank is preparing to change capital rules, which might increase interest rates slightly for rental property mortgages in mid to late 2015. It won't drop the high LVR speed limit any time soon.
Fixed mortgage rates are low and falling because long term interest rates globally are being pushed lower by deflation and central bank money printing and bond buying.
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