Record number of pre-approvals
Mortgage Express, the mortgage broking chain that is part of the Harcourts real estate group, has a record number of loans on its books awaiting settlement.
Tuesday, June 10th 2008, 10:00AM
by Maria Scott
He believed that this was because of the state of the market, where a number of people had sold to others subject to the sale of those properties.
L'Almont said that Mortgage Express viewed its high level of pre-approved loans as a positive sign about the market.
"We believe it is good news. It will just take some to start, and then the chain reaction will follow.
"We are optimistic about what's out there."
The Mortgage Express experience comes against a background of falling transactions in the housing market and falling prices. The Reserve Bank of New Zealand (RBNZ) predicted this week that prices would fall by 13 per cent over the next three years, equivalent to 22 per cent when inflation was taken into account. The Bank signaled cuts in the Official Cash Rate (OCR), from its current level of 8.25 per cent, from later this year.
Wholesale funding costs, which play a large part in determining the cost of fixed rate loans, fell in response to the statement and banks began to cut fixed rates almost immediately.
L'Almont welcomed the bank cuts.
"The average Kiwi homeloan is not affected by the OCR rates because they (borrowers) generally go for the fixed rates, which are funded by completely different sources.
"The evidence of this is that banks have independently of the RBNZ started to drop rates. We just need to get the positive news out to the community."
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