News - 7 July 2008

The Alpha Update

Commercial Property Education

A number of my successful residential investor clients have been looking at commercial property recently, as a means of diversifying their portfolio. However, they have all discovered that there are major differences between residential and commercial property investments - the amount of money involved, the size of deposit required, the timeframes, the up front costs, the sales process, etc etc.

With a background in commercial property lending over 15 years and hands on experience as an investor myself, I have organised one on one sessions with some of these clients to provide education on commercial property. These sessions are designed to impart a moderate level of understanding to the client about the similarities and differences between the two types of investments. I'm happy to extend this offer to other readers who would like to know more about commercial property.

Who do you know that has a residential property portfolio that they are looking to diversify? Are they interested in knowing more about commercial property? If so, get them to call us Today on 021 676 747 or 0800 676 747 to book in for the next education session.

Food for Thought

"Life is like an onion. You peel it off one layer at a time, and sometimes you weep." -- Carl Sandburg

What's New??

• Banks still competing hard for good business
• 2008 Property Services Book now available - a "yellow pages" specifically for all things property

If you or anyone you know wants to know more about any of these products, email Stuart@alphagroup.co.nz

Interest Rate and Currency Comments

An interesting move by Kiwibank on Friday, bringing down their 2-5 year rates below 9%, a reduction of up to 0.2% in some cases. However, the devil is in the detail, as the best 2 and 3 year rates are only available to those who have 20% or more equity. On the wholesale side, rates have moved up, with a number of non-bank lenders increasing their 1, 2 and 3 year rates. Continued uncertainty from the global credit crunch will limit interest rate falls for longer term fixed rates.

Downward pressure has continued on the kiwi against all our trading partners over the past fortnight, although fluctuations within the trend continue, depending on the data released. Rising interest rates offshore make the kiwi less attractive, and a weakening economy is encouraging offshore investors to leave their money at home. This trend is likely to continue, although the pace may vary.

(See below for latest interest and exchange rates).

The Finance Markets

As of 8am on Monday 7 July 2008 the following Interest Rates applied:
Official cash rate 8.25% (stable)
90 day bill rate 8.64% (down slightly)
5 year swap rate 7.60% (stable)
NZ/US Dollar 0.7600 (down slightly)

Current Range of Interest Rates for home and investment mortgages as at 7 July 2008

Floating:
10.20 to 11.50% (stable)

Fixed For:
1 Year - 9.29% to 10.95% (stable)
2 Year - 9.10% to 10.65% (stable)
3 Year - 8.99% to 10.85% (down slightly)
4 Year - 8.99% to 10.35% (down slightly)
5 Year - 8.99% to 10.35% (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.