sign up log in
Want to go ad-free? Find out how, here.

A review of things you need to know before you go home on Friday; Kiwibank ups mortgage rates, housing pressure widens, big new development starts, swap rates jump & steepen, NZD ranges

A review of things you need to know before you go home on Friday; Kiwibank ups mortgage rates, housing pressure widens, big new development starts, swap rates jump & steepen, NZD ranges

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

MORTGAGE RATE CHANGES
Kiwibank said it will be raising all its fixed rates for terms of two years and longer on Monday. But they are holding their market-leading 4.19% one year rate. Housing NZ also raised its three and five year rates.

DEPOSIT RATE CHANGES
There are no TD rate changes advised today.

PRESSURE GROWING
A growing proportion of households are spending more than a quarter of their household income on housing, Statistics NZ said today. From the year ended June 2007 to June 2016, the proportion of households spending one-quarter or more of their total household income on housing costs rose from 25.8% to 31.3% of all households.

THE COST OF A POWER OUTAGE
Aluminium is essentially solid electricity - it uses enormous amounts of the stuff. Yesterday the Alcoa smelter in Portland, Vic in Australia suffered a power outage and some smelting pots seized up. The plant may never reopen. It is a facility developed with huge state subsidies (A$2 bln) and relies on brown coal-fired electricity generation. Lots of jobs are at stake.

O' OH
Aussie infant formula maker Bellamy's has seen its share price crash -40% today. Sales of its product in China are disappointing everyone.

BIG NEW AUCKLAND HOUSING PROJECT
Chinese developer Changda has today started building 570 new homes in Orewa's Sunny Heights development in the north of Auckland city. This is a $420 mln project (yes, that is a $737,000 average). The project will be delivered in stages. The entire development is for 253 detached houses, 142 ‘Zero Lot’ Dwellings, 93 terraced homes and 82 apartment complexes. Completion of stage one sub-divisions is expected by August 2018. The rest of the construction is expected to complete in late 2021.

WHOLESALE RATES RISE AGAIN
The spectacular rise in wholesale rates continued today, especially for terms of two years and longer. The two year is up another +2 bps to 2.30%, the five year is up another +6 bps to 2.57%, and the ten year is up +8 bps to 3.42%. That has steepened the curve even further and the 1-5 is now at a 2½ year high at +75 bps, and the 2-10 is now at an eye-watering 111 bps. Both are steeper than some analysts were expecting at this time. The 90-day bank bill is unchanged at 2.04%. Yields on NZGBs have actually slipped a little today, and that suggests a special demand rise for our sovereign paper given the pressures offshore. We should also note that NZ sovereign CDS spreads (23.7) are unusually low, even lower than the US now (28.5), and only bettered by Switzerland (20.5), Norway (20.0), and Germany (23.0).

NZ DOLLAR RANGES
The Kiwi dollar is moving in a fairly narrow band today and is now at 70.9 USc. On the cross rates it is at 95.5 AUc, and is at 66.4 euro cents. The TWI-5 now at 76.7 Check our real-time charts here.

You can now see an animation of this chart. Click on it, or click here.

Daily exchange rates

Select chart tabs

Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
End of day UTC
Source: CoinDesk

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

5 Comments

A growing proportion of households are spending more than a quarter of their household income on housing, Statistics NZ said today. From the year ended June 2007 to June 2016, the proportion of households spending one-quarter or more of their total household income on housing costs rose from 25.8% to 31.3% of all households.

What an economic catastrophe - hardly productive in any way or form -shelter should be as cheap as toasters in relative terms, so NZer's can collectively self insure against the prevalent destructive forces of nature.

Up
0

yes a disaster for the productive economy, plenty on here have been warning the out of control house inflation will lead to bad times ahead. wait until the higher interest rates start to bite, even less will be left for people to spend.

Up
0

This example is not helpful.

A haven of Wellington's history has sold under the hammer sight unseen for $1,028,000 – nearly double its rateable value of $580,000. Read more

Up
0

Commonwealth Bank is increasing rates on fixed term owner occupied and investment loans by up to 65 basis points.
parent company of ASB
http://www.businessinsider.com.au/the-commonwealth-bank-is-putting-up-f…

Up
0

Soon we'll be comparing the incline of the rates curve with that of Baldwin St.

Up
0