News - 6 August 2007

The Alpha Update

How to Move from Residential to Commercial Property Investment

For many people, the idea of owning commercial property is both an exciting and daunting one. But owning commercial property can be the wisest move you make as you build your business or investment portfolio.

Starting out in commercial property is not as difficult as many people believe, however it does require research and understanding of the differences between residential and commercial property investment. Jargon such as "Cap Rates" and "ADLS leases" need to become second nature to succeed in commercial property investment. As an owner occupier, there are a number of ways of funding yourself into your own property, depending on the nature of your business.

Fortunately, Alpha Financial Solutions Ltd has the answer! Email me now to request your copy of the "Beginners Guide to Commercial Property Investment" This handy guide will help explain the process involved in investing in Commercial Property, and the differences between commercial and residential property investment.

If you, or anyone you know, is considering getting into commercial property, give Stuart a call on 021 676 747 or 0800 676 747.

Food for Thought

People will believe anything if you whisper it! - Karl Kraus

What's New??

• 2 bedroom newly refurbished rental unit in Royal Oak available for sale under $400k
• Commercially leased serviced apartments in Newmarket showing a yield of 7.4% and a purchase price under $280k

For more information about any of these opportunities, email Stuart@alphagroup.co.nz

Interest Rate and Currency Comments

As predicted, the Reserve Bank raised the Official Cash Rate last week. However, the accompanying statement hinted at the potential for this to be the last rise for a while. Whilst floating rates reacted immediately (new rate is now 10.55% for the major banks), fixed rate movements were more modest, with most moving only 0.10% or 0.15%. 4 and 5 years rates haven't moved at all. The market is staring to see real reluctance of borrowers to pay these new higher rates.

Call me prophetic - the kiwi dropped by around 4 cents in 4 days against the US dollar, as problems with sub-prime mortgages in the US spread uncertainty across the globe. This saw investors sell higher risk currencies like the kiwi and invest the proceeds in government stock back in the US. Depending on the impact of this uncertainty, we may see further large drops in the kiwi in the weeks ahead.

(See below for latest interest and exchange rates).

The Finance Markets

As of 8am on Monday 6 August 2007 the following Interest Rates applied:
Official cash rate 8.25% (up)
90 day bill rate 8.57% (up)
5 year bond rate 7.17% (down)
NZ/US Dollar 0.7685 (down from 0.7936)

Current Range of Interest Rates for home and investment mortgages as at 6 August 2007.

Floating:
9.6 to 10.80% (up)

Fixed For:
1 Year - 9.15% to 10.12% (up)
2 Year - 9.15% to 9.99% (up slightly)
3 Year - 8.90% to 9.95% (up slightly)
4 Year - 8.80% to 9.85% (stable)
5 Year - 8.80% to 9.80% (stable)

For a complete table of interest and exchange rates, click here.

The information stated herein was correct at the time of release, but is subject to changes without notice.