Hi Guys
Two pieces of news from Cairns, Lockie fortnightly newsletter:
Regards
Two pieces of news from Cairns, Lockie fortnightly newsletter:
Who Is Buying Inner City Auckland Apartments?Over the next 12 months nearly 5,000 new inner city apartments will come
on the Auckland market. This is on top of the existing supply of nearly
8,000. This begs the question who is buying all these apartments.
Recently Bayleys Real Estate has undertaken some research to obtain a
snap shot of these buyers:
" Around 60% are being purchased by resident buyers and the
remaining 40% by offshore parties.
" Fairly evenly split between owner occupiers at 55% and 45% for
investors.
" Those in their 40's are the largest purchasing group, followed
by those in their 30's, then their 50's.
" More couples are purchasing apartments than single people
These results are interesting as many people think most apartment
purchasers are young, single and investors. This is not the case.
Mortgage Rates Across the Ditch
Currently our Official Cash Rate is 5.50% and in Australia it is 5.25%.
As this is the main funding mechanism for determining mortgage rates you
would expect them to be a little lower in Australia than here. This is
the case. The average bank floating rate in New Zealand is 7.75% and in
Australia it is 7.07%. The average two year rate in NZ ranges from 7.30%
to 7.55%, whereas in Australia the range is from 6.60% through to 7.75%.
The big difference between the two markets is that our rates are much
more bunched together. Nearly all our prime floating rates range from
7.40% to 7.75% - a range of 35 points. In Australia the range is from
6.49% through to 7.07%, a difference of 58 points. The same is true for
fixed rates.
Are We Paying Too Much for our Mortgages?
Some may believe that because we have the highest mortgage rates in the
OECD countries, our lenders must be earning the highest margins. The
recent KPMG, 2004 Financial Institutions Performance Survey show this is
not the case. Margins for the major bank lenders in various countries
for 2003 are
NZ 2.65%
Australia 2.66%
U.K 2.21%
USA 3.25%
Canada 2.07%
We are right on a par with Australia, which is the easiest country to
compare ourselves with, higher than the UK and Canada, but lower than
the USA. The full report can be obtained from KPMG at
http://www.kpmg.co.nz/apps/core.kpmg....jsp?id=101902
on the Auckland market. This is on top of the existing supply of nearly
8,000. This begs the question who is buying all these apartments.
Recently Bayleys Real Estate has undertaken some research to obtain a
snap shot of these buyers:
" Around 60% are being purchased by resident buyers and the
remaining 40% by offshore parties.
" Fairly evenly split between owner occupiers at 55% and 45% for
investors.
" Those in their 40's are the largest purchasing group, followed
by those in their 30's, then their 50's.
" More couples are purchasing apartments than single people
These results are interesting as many people think most apartment
purchasers are young, single and investors. This is not the case.
Mortgage Rates Across the Ditch
Currently our Official Cash Rate is 5.50% and in Australia it is 5.25%.
As this is the main funding mechanism for determining mortgage rates you
would expect them to be a little lower in Australia than here. This is
the case. The average bank floating rate in New Zealand is 7.75% and in
Australia it is 7.07%. The average two year rate in NZ ranges from 7.30%
to 7.55%, whereas in Australia the range is from 6.60% through to 7.75%.
The big difference between the two markets is that our rates are much
more bunched together. Nearly all our prime floating rates range from
7.40% to 7.75% - a range of 35 points. In Australia the range is from
6.49% through to 7.07%, a difference of 58 points. The same is true for
fixed rates.
Are We Paying Too Much for our Mortgages?
Some may believe that because we have the highest mortgage rates in the
OECD countries, our lenders must be earning the highest margins. The
recent KPMG, 2004 Financial Institutions Performance Survey show this is
not the case. Margins for the major bank lenders in various countries
for 2003 are
NZ 2.65%
Australia 2.66%
U.K 2.21%
USA 3.25%
Canada 2.07%
We are right on a par with Australia, which is the easiest country to
compare ourselves with, higher than the UK and Canada, but lower than
the USA. The full report can be obtained from KPMG at
http://www.kpmg.co.nz/apps/core.kpmg....jsp?id=101902
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