Bluestone arrives in NZ
Competition is hotting up in the non-conforming loans market with another Australian provider, Bluestone Mortgages, entering the New Zealand market.
Monday, December 16th 2002, 2:09AM
Bluestone, which was established by Kiwi financier Alistair Jeffery, officially launched its operations in Auckland in mid-November.
Bluestone's national manager New Zealand, Peter Wood, reckons the local market for non-conforming loans is between $600 million and $1 billion each year.
Wood says there are two key groups that make up the market. One is the group of people who have "credit impairment". Essentially these are people who's credit history doesn't meet bank criteria.
The second group is the self-employed market. Wood says like Australia, New Zealand has a large number of self-employed people. Often they have difficulty getting home loans because their track record in business is too short.
The other areas Bluestone expects to pick up business are amongst new immigrants and ethnic groups, plus in the older demographic group.
Wood says Bluestone's rates are between 8.5% and 12% and he expects people will use their non-conforming loans for three or four years before they are eligible for prime bank loans at lower rates.
Bluestone doesn't offer loans in this area.
Wood says that Bluestone aims to differentiate itself by offering innovative product design, plus good service. As an example of innovation Wood notes that the company has recently launched a line of credit product in the Australian market.
Bluestone gets most of its funding through Barclays Bank in the United Kingdom and Japanese bank Nomura. Its cornerstone shareholders include Barclays and South Africa's biggest retail bank Rand First Merchant.
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