Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).
MORTGAGE/LOAN RATE CHANGES
No changes to report today.
TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here either.
GRUESOME SLOWDOWN
Last week there was a jump in the number of properties being auctioned, but only 30% of them sold under the hammer. In Auckland it was only 18% and vastly different from Christchurch's 86%.
LARGER WORKFORCE BUT NOT LARGER SPENDING
Kiwibank economists note that as migrants send some portion of their wages back to their home countries this suggest weaker local consumption than otherwise.
TAILWIND
Commodity prices rose in April, were boosted by a sagging NZD. The ANZ World Commodity Price Index lifted +0.5% in April from March as stronger meat and aluminium prices offset further weakness in forestry returns. In New Zealand dollar terms, the index gained +2.7% in the month as the TWI fell. Year on year, prices are up +3.2% in world price terms, up a sharpish +7.3% in NZD terms. But both are still well below the 2022 highs.
ON THE WAY BACK UP
Westpac NZ reported a profit rise in their latest half-year results, after big drop in loan impairment charges. It rose to $562 mln for their half year. They report that fewer customers are suffering hardship than they expected. The bank sees "good momentum", and is optimistic the economy will start improving by end of this year.
CHINA'S SERVICE SECTOR EXPANDS
In China, the private Caixin services PMI brought some good solid news. It was little-changed in April from the expansion in March, now the 16th straight month of expansion of services their services sector. This private survey reports a faster expansion than the official version. Of special note is that new business grew the most in nearly a year and the fastest since May 2023. Foreign sales rising the most in ten months.
EASING
In Australia, the Melbourne Institute monthly inflation monitor for April found an increase in monthly inflation, although annual inflation continues to decline. Annual changes in the cost of living also fell for most household types.
HIGHER DEMAND BRINGS HIGHER PRICES
It is very noticeable that mineral prices are on the rise again. That includes zinc, nickel, tin, lead, aluminium, and copper. A rise in global demand is behind the broad recent increases. There are some tighter supply points too as is usual in the transition.
SWAP RATES STABLE
Wholesale swap rates are likely to be little-changed. Our chart below will record the final positions. The 90 day bank bill rate is unchanged at 5.63%, a level it has hovered around for more than 70 days. The Australian 10 year bond yield is up +3 bps from this morning, now at 4.45%. The China 10 year bond rate is up +1 bps after their holiday at 2.32%. The NZ Government 10 year bond rate is down -1 bp to 4.86% and the earlier RBNZ fix was at 4.78% and down -3 bps from Friday. The UST 10yr yield is currently little-changed from Saturday's close at 4.50%. Their 2yr is now at 4.88%, so the curve is shallower at -30 bps inverted.
EQUITIES MIXED
The NZX50 is down a sharpish -0.9% to start the week in late trade. However the ASX200 is up +0.6% in afternoon trade. Tokyo is on holiday (Children's Day). Hong Konh has opened little changed, but Shanghai is up a full +1.0%, returning after a week's holiday so this is catchup. Singapore is up +0.4% at its open. The S&P500 futures suggest Wall Street will open tomorrow little-changed from its Friday close.
OIL HOLDS SOFT
The oil price is remains today from this morning, at just over US$78/bbl in the US, while still just over US$83/bbl for the international Brent price.
GOLD FIRM
In early Asian trade, gold is up +US$10 from this morning, now just under US$2311/oz.
NZD HOLDS
The Kiwi dollar is little-changed from this morning at 60.1 USc. Against the Aussie we are marginally softer at 90.8 AUc. Against the euro we are also softer at 55.8 euro cents. This all means the TWI-5 is now at 69.3, and little-changed.
BITCOIN STABLE
The bitcoin price has risen to US$64,106, and very little difference from the US$64,262 when we opened this morning. Volatility of the past 24 hours has been modest at +/-1.2%.
This soil moisture chart is animated here.
Keep abreast of upcoming events by following our Economic Calendar here ».
50 Comments
"Gruesome", the new reality. Wouldn't want to be a supplier to the RE agencies this year.
Stand back from the fan !
If we do get HFL then property has a long way to drop yet. Many properties are 50% overpriced or more in terms of rental yield.
Chris Joye AFR has been trying to point this out for some time now, work your numbers on a 5.5% 2 year rate with the new reality of rate increases insurance etc. … an limited capital gain (locked to incomes via DTI)
yeah rentals have a way to fall
re non rentals ? Who knows what a tulip is really worth ?
Unsold inventory is increasing as we head into winter when properties look there worst. Vendor anxiety must be building along with the reality the days when buyers were lining up to prey on individual listings are way in the past. It's now more about offering up property that's unique attributes stand out where others don't and then comes the all important pricing in a buyers market.
No, immigration hasn't and will not save the housing market from it's continued journey south in searching for it's true worth. Fundamental fixed costs such as HFL, insurance, maintenance and rates have shifted considerably since the Nov-21 peak therefore so has the floor.
I wonder what percentage of the population are simply a household living in their home with no interest in any other property? With appreciation that with many their status as mortgagees will be an obvious issue but for them at least, the worth of their property simply rides up and down as if a boat on the harbour on tides. It is a problem today that successive governments over many years have failed to differentiate between simple homeownership and encourage that, as a matter of priority, as opposed to all the others. Well at least Norman Kirk and his government did try.
A mortgagor is that who borrows money from a lender in order to purchase a home or other piece of real estate.
Ah.Dumb.Thanks. Won’t edit. Let my embarrassment sit. Still haven’t learnt to check before, submit.
They did indeed try to make this place a better place... the last of the best.
There are a lot more for sale signs popping up in our area. They were selling fairly quickly, but I can't see that continuing if the supply keeps increasing. I feel a crash coming on...
I love watching police pursuits... Will add the housing crash to my favorites...
Go and take a look at some of the Buster Keaton examples on Utube. Although, in comparison, likely not anywhere near as madcap.
House on the market near us due to divorce. They broke up 2 years ago. Good development section. I reckon they have lost out on $600k by not selling 2 years ago. Agent already hounding me because I went to open home, he reckons they desperate to sell and may have to take a “low” price.
They lost nothing unless it sells for less than they paid for it and the interest payments to date on top. Paper gains are only paper until realised.
So none of you who commented on the gruesome Auckland result, cared to check the 18% clearance claim ? It was actally 32%, more specifically 102 out if 315.
Oh well, 18% fits the biais better, let's not bother with facts.
The usual suspects RP, JJ, ITG
The editor described it as ‘gruesome’, not commenters
In China, the private Caixin services PMI brought some good solid news.
No room for improvement according to some.
America’s Competition With China Must Be Won, Not Managed
Remittances - more people, more sewage, more health care needs, more traffic, more rental pressure. No more/ significant local consumption, no more increase velocity of money, more quality of life? Immigration policy?!
So all of us up-tickers, what's the answer?
Less people, less debt, less degradation, less depletion.
Kinda suggests that 'more' is wrong....
A wallet that has been dormant for 10.3 years transferred all 687.33 BTC ($43.94 million) out today.
The whale received 687.33 BTC($630K at that time) on Jan 12, 2014, when the price was $917.
Address: 15WZNLACuvcDrrBL2btDErJggnaMQtHh5G
Better than Sydney houses.
What's a whale going to do with all the money?
Difficult to live the high-life if you can barely get above sea level.
Silly question, spend it on ice cream of course. ;-)
What's a whale going to do with all the money?
We can't assume the whale will do anything. It may not be realized in fiat currency.
And that raises a good point that many people point out. If it's not realized in fiat, what's its value anyway?
Is the info publicly available.. if so isnt that a security risk
It was Carlo's wallet..
Amazing that sort of wallet doesn't transfer a little bit now and again to check it all still works
After 6 months of very low demand, I'm personally seeing quite an uplift in design work (I don't do group housing). I see the building community being hit hard for the next 6 months (I'm always 6 mo ahead) and who knows what after that, but right now those who were holding off are now proceeding, and may even be getting value for money. So right now, I'm actually very happy being a RE supplier (and I'm not spruiking - I may just be an outlier).
Well played. I'm more meaning the RE agencies, the ticket clippers vs people doing real work on the wider sector. Have edited to make that more clear.
Contact energy confirms generation at Tahura geothermal plant.Commissioning will be over the next month.One of 2 geothermal projects due for completion this year.This and geothermal projects in delivery will see an increase in Geothermal generation of 2700 GWh by the end of 2025 displacing 9.5 Pj of thermal generation this is 5 years ahead of the latest Climate commission forecast.
https://contact.co.nz/aboutus/media-centre/2024/05/06/major-milestone-f…
“Once up to full capacity, Tauhara will produce around 174 MW of electricity, which is around 3.5 percent of the country’s electricity, enough for 200,000 households” - so we need to build one every 3 years or so just to keep up with population increase let alone our climate commitments.
130k people per year at 2.7 people per household is just under 50k new households per year, so not quite
Nope,Electricity demand is around the same as it was in 2010 when the population was 4.3 m.Efficiency gains being a major reason.Demand is not expected to increase until 2026,when large Gidi projects start to electrify.
Good news. Need to keep growing renewable electricity so it can displace remaking fossil fuel consumption - not only thermal power plants but ICE vehicles also. Will benefit the economy by reducing oil imports and improve balance of payments
Owner could take $800,000 hit on mansion that escaped mortgagee sale: https://www.oneroof.co.nz/news/owner-could-take-800-000-hit-on-mansion-…
Do we care? This is not a victimless crime,
Talking about gruesome, how about the performance of the NZX50. Been godawful over the past couple of years
+18.6% in past 5 years. Flat in past 2 years.
Not even enough to match inflation.
Headline inflation rises by a paltry 0.09% in Aussie in March.
https://www.macrobusiness.com.au/2024/05/aussie-inflation-gauge-loses-s…
‘The Left’ needs to look itself in the mirror
On this day in 2014, Charlie Munger gave Bitcoin the moniker "rat poison”. Price was USD425.
If only people listened. It has to be the most inefficient online gambling app ever created.
Gambling app that you never lose??
Well this is hardly a ringing endorsement of the coalition's approach is it? And this from the OECD, hardly a lefty organisation. I'll repeat again, this coalition is failing New Zealand, not for being right wing (it isn't) but for being rubbish.
https://www.nzherald.co.nz/business/oecd-nz-shouldnt-borrow-to-pay-for-…
"...hardly a lefty organisation"
Others disagree
https://www.cato.org/blog/more-dishonest-data-manipulation-tax-happy-bu…
Yep, rubbish. Just like the last bunch
Doesn’t take a genius to realise you shouldn’t borrow to fund tax cuts. The fact that the government is even contemplating such stupidity sums them up. Mortgage future generations so we can keep living beyond our means….
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