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A review of things you need to know before you go home today; vulnerable sellers targeted by property investors; NZ's tax liability increases; Westpac financial results; inquiry into big four Aussie banks; local rates up; NZD stable

A review of things you need to know before you go home today; vulnerable sellers targeted by property investors; NZ's tax liability increases; Westpac financial results; inquiry into big four Aussie banks; local rates up; NZD stable

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
Kiwibank and AMP Home Loans have increased their floating loan and revolving credit rates by +15 bps. The floating rates currently sit at 5.70% for Kiwibank and 6.24% for AMP, with AMP priority customers getting loans at 6.14%.

DEPOSIT RATE CHANGES
No changes to deposit rates today.

PROPERTY INVESTORS TARGET VULNERABLE SELLERS
ANZ is ending its sponsorship of the Auckland Property Investors Association (APIA). This follows a weekend report in the NZ Herald about a video made by property coach and investor Ron Hoy Fong encouraging investors to give false names and target desperate homeowners. It was distributed free to APIA members. “We met with APIA this morning and advised them of our decision to terminate our sponsorship agreement," said Antonia Watson, ANZ managing director for retail and business banking. “We have zero tolerance for being associated with people who recommend exploitation of individuals for their own benefit.” The REAA has also released a statement asking its licensed agents to keep on top of such developments and do thier best to protect their clients. They also say that sellers should look to engage a lawyer to help them navigate the property sales process and use a licensed agent as there is more legal protection afforded to the seller if something were to go wrong.

TAX FREEDOM DAY
The annual report by Staples Rodway that calculates the day New Zealanders have paid off their tax bill for the year and can from that point onwards keep their income says that this year the number of days taken to pay the country's tax bill has increased by six days and the amount of tax paid is up to 34.8% of income, an increase of 9.5%, more than double the increase last year. During the same period, the GDP has increased by 5.6%. The increase was primarily attributed to company profits and bracket creep for individual tax payers.

2% RISE IN CASH EARNINGS
Westpac's cash earnings for six months ended 31 March 2017 increased by 2%, to $462 mln, compared to 2016 results. However, net operating income fell 1% and operating expenses rose 2%. Net interest margin was also lower by -22 bps, down to 1.96%. The reduction in net interest margin is attributed to increased funding costs and strong lending competition.

'BIG FOUR' INQUIRY
The Australian Productivity Commission will conduct an inquiry into competition in the countries financial system after public outcry of the Big Four banks misusing their market power, with more than 80% market share. The commission is set to examine the barriers to entry to innovation the banking system and look at competition in the personal and small business banking segments. The inquiry will begin on July 1 and the report should be out mid next year.

FIRST IN NINE MONTHS
While the fall in Australian building consent numbers on a year-on-year basis was greater than expected, -19.9% as opposed to -10% expected, the Australian Bureau of Statistics says that the number Australian building approvals reversed the declining trend of eight months to rise +0.8%, in trend terms, with the biggest rise coming in New South Wales (+3.0%). Values of building consents issued, on the other hand, just rose 0.1% in March, in trend terms. The first rise in eight months.

HIGHEST IN NINE YEARS
The NAB monthly business survey says that business conditions in Australia are at the highest level since 2008 at +14 points, compared to the long run average of +5. Business conditions look to be improving across all industries, with the exception of retail.

WHOLESALE RATES HIGHER
Local swap rates are up +2 bps across the curve with the exception of the 1 yr rate which was unchanged at 2.34%. The 2 yr rate is at 2.34% and the 10 yr rate is at 3.43%. The 90 day bank bill is unchanged at 1.98%.

NZ DOLLAR STABLE
After rallying on Friday, NZD opened this morning at 69.1 USc and still trades at that level after testing the 68.9 USc level this afternoon. On the crosses we are up to 93.3 AUc and 62.9 euro cents. The TWI-5 is now at 73.9, up from at the same time Friday.

 

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18 Comments

That ANZ / Auckland property Investors Association story is quite a cute one.

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"..innovation in the banking system"

I thought what was required was stability over innovation?

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Surely we need to know how imputation credits have been handled in preparing these statistics.

Meaningless otherwise

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ANZ/APIA
I suspect that their true concern is actually -
We have zero tolerance for being seen to be associated with people who recommend exploitation of individuals for their own benefit.
Until this became public they did not give a toss and were quite happy with the arrangement and accept the business.

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NZ is a naive country ripe for the picking from these types. However, in this game of musical chairs, lets hope that these are the people sitting on the chairs (booby prises). I wouldn't be surprised because property is all they know and they will not sell at the appropriate time.
I wonder what Mr Fong would say if people like himself ganged up on him if he becomes infirm of mind.

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More and more stories of Real Estate Agencies selling a house only for it to be on sold days or weeks later. A few years ago it was the Agents job to get the best price and now it seems they're deceiving the sellers so they can on sell again and make another commission. Its simply despicable.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=118…

Every industry eventually becomes too comfortable and feels untouchable. This RE industry is ripe for disruption.

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I'd be prepared to bet that the last purchaser is not a NZ resident or citizen.

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....and I wonder who has ended up with all those leaky buildings?

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The last purchaser is Chung-Wei Chen and I can't find a NZ FB account with that name, so I am guessing he is not a resident nor citizen.

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Personally I think he had it coming by encouraging buyers to use fake names and target desperate families. This is not a very Kiwi way of doing things.

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I guess it isn't rocket science and surely "investors" know these things already. Silly to have it on video. And yes, it's not something I would be happy about doing. I felt bad for weeks for outbidding a FHB once.

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You've only outbidded a FHB once so I guess you're ok. We forgive you Zachary ;-)

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The FHB would have still lost the property to another investor who I had to fight off as well. I found out later from the REA that they did find a place to buy soon after.

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I see, oh well, it cannot be helped so don't worry about it. I was just looking at this new DGZ listing in Upland Rd. What do you think and can you see where the problem is?? Haha, I knew this was going to be put in the market about a year ago because of a very obvious reason (for those who know...).
The hint is...you have to look at the aerial map ;-)
http://www.trademe.co.nz/property/residential-property-for-sale/auction…

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Looks like a large structure being built next door. It is interesting that the aerial view shows a different picture to the streetview, something I have noticed before. Sometimes a house will be in one location from the aerial view but a street view will show it as having been moved on the section.

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Bingo! If you look at the map, you can see 2x new houses built on the south side of the property which used to be a piece of lawn that has been sub-divided and sold off 2-3 years ago. Also in the northwest direction of the property, another 2x houses were built at the same time. During this time, it was surrounded left right and centre by construction work (this house would have been lucky to survive with only minor structural damage). The worse thing is that the entire pool area at the back is completely overlooked by all these new-builds...ouch!

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he is a third generation kiwi, I think it has more to do with a flaw in his character to encourage some of the types of behavior whilst being a JB.
I would be interested to know if he notarized documents with fake details knowingly

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