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The Money Market

This morning (8am on 7 April 2006) the money markets were at the
following levels:

Official cash rate 7.25% (unchanged)
90 day bill rate 7.47 (up from 7.46)
1 year swap rate 7.18 (down from 7.25)
3 year swap rate 6.63 (down from 6.65)
10 year bond rate 5.70 (down from 5.77)
Kiwi dollar 0.6147 (down from 0.6250)


Record Month for the Cairns Lockie Group

A big thank you to all our referring brokers, introducers of business
and our many clients. We settled a record volume of loans in March - our
biggest month ever - up by almost 20% on our previous high. It would not
have been possible without your support.

We are doing more because we can do more.

Part of the growth has been due to recent product changes, particularly
the easing of criteria with our 100% Home Loan and improvements with our
No Financials product. In some qualifying cases we have written second
mortgages to top up No Financials loans beyond 80% LVR and $1 million
per security.
Being able to do bridging loans and second mortgages through our
debenture funded finance company has increased the range of solutions we
have been able to offer to our clients.


Lifestyle blocks

Over the past 12 months, the lifestyle market has enjoyed a period of
strong growth, according to a recent report from Bayleys Research. A
definition of a lifestyle block is a residential dwelling with upward of
10 hectares of land where the occupants have all the advantages of
country living but maintain their city employment.
The average sale price to December 2005 for this type of property
reached a new high of $497,500 up by 20% from $414,500 the previous
year. It currently takes 60 days to sell a lifestyle block, down
slightly from 62 days in the 2004 year. Sales volume for 2005 was 7,990
units sold, virtually unchanged from the 2004 year of 8,017. These
figures are assisted by a number of people purchasing vacant land and
building a dwelling, thus adding to the supply of these types of
properties.


Improvements to Our Construction Loan

We have recently enhanced our Construction Loan, by adding the option of
using a second wholesaler. We can now advance up to 95% of the proposed
construction including the land component, or up to 90% of the bare
land. We have streamlined our progress payment procedures and these are
now made to the builder directly, without the need for progress
valuations in many cases. We will accept any professional builders to
carry out the work. A fixed price contract is required, which is really
there to protect the borrower. We do offer a No Financials Construction
option, but here the amount we will lend is restricted to 80% of the
valuation. For owner builders we can go up to 50% of the valuation,
which is a first. Our new Construction Loan is more streamlined and
user friendly to those wanting to build their new home.


New Zealand Rates Compared with Australia

A large number of Kiwis have properties in Australia, particularly in
locations such as Queensland. The biggest difference between Australia
and here, is that most mortgages there are written at the floating rate,
which is little different from the fixed rates. The average bank
floating rate is around 7.32% whereas a number of non-bank lenders are
offering floating rates from 6.29% up to 7.32%. There are a number of
specials on at the moment at around the mid 6.00's%. Three-year fixed
rates range from 6.39% to 7.20%.


Our current mortgage interest rates are as follows:

Variable rate 9.20%

No Financials Home Loan 9.80

Jumbo Loan 9.20

Quick Start Home Loan 7.95

One-year fixed rate 8.38
Two-year fixed rate 7.74
Three-year fixed rate 7.69
Five-year fixed rate 7.64

Line of credit facility 9.30

Regards
William Cairns
James Lockie

Cairns Lockie Limited
321 Great South Road, Greenlane, Auckland
PO Box 74-212, Market Road, Auckland
Telephone (09) 526 2000
Facsimile (09) 579 7795
Website http://www.emortgage.co.nz