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Investor Newsletter - March 2013

Welcome to our March 2013 General Finance quarterly newsletter. We appreciate your support. The purpose of this newsletter is to keep you informed about the company and various financial matters that may interest you.

Official Cash Rate

As expected, the Governor of the Reserve Bank, earlier this month, left the official cash rate unchanged at 2.5%.  What are more interesting, are the comments he made with his statement. Firstly he said that rates are likely to remain unchanged for the rest of the year. This makes sense as unemployment is showing no signs of easing, and we have drought conditions in much of the country, which will negatively affect farm incomes. Overall economic growth will remain subdued. This is certainly not the time to be raising interest rates. The immediate result in the financial markets was a slight easing of long term interest rates and the exchange rate. What this all means for those, such as yourselves, with funds to invest, is that interest rates will not be increasing over the next 12 months. 

Auckland’s Housing Shortage

Commentators have been saying that the Auckland housing market will perform well this year and may rise overall by around 10%.  Next year is forecast to be positive too. Low interest rates are one thing that is driving this, but there is another more important factor - Auckland is simply not building enough homes. According to a recent report from Westpac Bank, this under-building is serious - Auckland needs to build a minimum of 9,500 dwellings annually. We are building half this number. To quickly unwind the shortage, we need to build well in excess of 9,500 in the short term. This shortage will remain for the foreseeable future and house prices will only go in one direction, which is up. Perversely this is good for General Finance Limited, as our security values will be improving, and as more houses are being built, we may receive more business.

Our First Quarter for 2013

The first quarter of this year has been reasonably good.  We believe this is due to a couple of factors - a slight improvement in the Auckland and Christchurch economies and more direct marketing to our clients. New money has been flowing in steadily and we are receiving a number of new applications. Virtually all are first mortgages, looking for short term bridging accommodations. They are in a range of locations including, Auckland, Wellington and Christchurch. 

Next Interest Payment

Our next quarterly interest payment will be made on the evening of Thursday 28 March 2013. Direct credits will be processed that evening, with cheques (if applicable) and paperwork being forwarded during the week.

If you have any questions about your investment please do not hesitate to contact William Cairns on 09 526 7801 or by email to Our website is

If you want to invest more funds, you can obtain an investment statement and application form from our securities registrar. Their number is 0800 500 602.


Your continued support is noted and appreciated.