Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes to report today.
DEPOSIT RATE CHANGES
NBS have reduced two TD rates for terms less than one year. Asset Finance have raised their two year offer by +10 bps.
ANOTHER SMALL RISE
The second modest rise in a row at the latest global dairy auction is being seen as pleasing given the extra milk powder coming on line. Overall prices firmed +1.6% and the key Whole Milk Powder price rose +2.4%.
BUYERS MARKET?
Auckland realtor Barfoot & Thompson's sales returned to healthier levels in March but the company warned that the market is changing. A surge in listings means that buyers are gaining an upper hand, with under-the-hammer auction results falling "to about 40%". QV also reported its price data today, for the three months to March.
USED IMPORTS STILL VERY POPULAR
The data for used imported cars is in for March now and it was very strong indeed. March is often a peak month for the year and this year was no different with 14,747 used imports first registered on our roads. That is far above the 9,230 new cars registered in the month. And it is not far off the all-time record of 14,877 registered in March 2004 for used imports. That takes the total over the past 12 months to 153,629 for this class of car.
INVESTORS SEE LESS RISK DIFFERENCE
The latest LGFA bond tender has seen strong demand today and at a lower prices, with a weighted average coverage ratio of 3.8x and a remarkable -27.5 bps decrease in comparable yields. That means local government yields are getting much closer to Government bond yields with today's result bringing a decrease 10-15 bps greater than the fall in Government bonds.
'REGIONAL RENAISSANCE'
This is how ANZ reported the results of its job ads survey for March which lifted +1.6%, on top of a small increase in February. "Job ads are 17.7% higher than a year ago (3-month average). The ongoing high level of job ads indicates a strong labour market, though the pace of growth has flattened off recently. Auckland remains the strongest of the main centres in annual growth terms, with the seasonally adjusted monthly number of job ads bouncing 2.5% to a fresh high after three months of falls. Wellington job ads growth is slowing, though the level continues to rise, while Canterbury job ads have oscillated around the 5,000 mark for the last 18 months. The regions continue to lead the charge. Every single one of the 11 less urbanised regions is experiencing stronger annual job ad growth than any of the three main centres. The construction, utilities, manufacturing and transport sector remains the largest sectoral driver of total job ads growth. The service sector is also contributing strongly. The current strength of labour demand flags unemployment heading under 5% later this year, with accompanying modestly stronger wage growth."
THE RUSH ONLINE CONTINUES
BNZ reported on online retail sales for February today. Spending was up +14% compared to the previous February. They said "this is a solid performance, especially when considering that last year was a leap year. (An extra days shopping in February can boost the month’s spending by more than 3%, depending on factors such as the day of the week the extra day falls on). Purchases from offshore online retailers in February were up +16% on February 2016. Spending at local online retailers was up +12% on February last year, significantly stronger than the year-on-year growth rate at bricks and mortar stores (approximately 0.1%). Food categories were responsible for over 40% of the increase in online purchases at local merchants since last February.
A CLEARER VIEW
The RBNZ released a new data set today of the banking industry's 'balance sheet'. It gives a much clearer view of how these loan books are structured. As at the end of February, there were 78.6% of all mortgages on a fixed rate contract. That is the highest level since 2009. As at February, 28% of this mortgage lending was to residential property investors (who had 42% of it on interest-only terms), and less than 3% was supporting small business lending (apparently).
WHOLESALE RATES RISE
Local swap rates rose +2 bps today across the board, ending a string of declines. This follows a similar lift on Wall Street. The 90 day bank bill is off -1 bp and now at 1.99%.
NZ DOLLAR SOFTER
The NZD is a little soft today and now at 69.7 USC. On the cross rates, against the AUD and EUR we now trade at 92.1 AUc and 65.3 euro cents respectively. For the TWI-5 we are still at 74.9.
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10 Comments
As at February, 28% of this mortgage lending was to residential property investors (who had 42% of it on interest-only terms), and less than 3% was supporting small business lending (apparently).
Oops.
Confirms an earlier assertion that Australian banks just want our houses.
Australia’s banks turned into giant building societies, lending almost exclusively against residential property and rarely, if ever, making unsecured loans to businesses or people any more.
If someone asks for a business or personal loan these days, the banker asks for the house.
The result is that traditional small business lending has dried up, and with it business investment, while Australia has the highest ratio of household debt to GDP (134 per cent) in the world, since business owners have to borrow against their houses.
And, by the way, the upward pressure on values from banks has probably contributed to the over-pricing of Australian real estate. Read more
The February S32 figures that seem to have appeared today confirm that 42% is fixed interest excluding revolving credit. Compared to 6.4% of owner occupiers being interest only.
Interesting information in the statistics. Business lending is about 50% larger than residential property lending. Although agriculture lending is smaller than residential property lending. It seems we can get a lot more useful information easily.
That is just wrong and a misrerading of the stats. Look at C32 again. Residential property lending is $164.3 plus $66.5 bln = $230.8 bln. Business loans are $98.5 bln. Even if you add $59.1 bln in agriculture loans, total business lending is far less than residential property lending.
Here you go: http://www.interest.co.nz/economic-calendar
Add this to your economic calendar. The money wars have only just begun. Payback time, just around the bend...like all debt. We are all around the bend. Nutty as a fruitcake.
http://www.marketwatch.com/story/heres-how-the-us-got-to-20-trillion-in…
Needs reform. In the US you can walk away from your house should you go into negative equity so the banks take on more of the risk.
The same should apply in NZ and Australia. Lets then see if the banks would still want to grow debt by 8.8% pa then. Part of the problem with too much cheap cash inflating demand.
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