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 RATE CHANGES
ANZ and BNZ both changed fixed rates, some up, some down. More here.
TERM DEPOSIT RATE CHANGES
ANZ raised many of its TD rates today. The Cooperative Bank raise some short rates.
BUYERS HOLD BACK
Barfoot & Thompson have reported a very slow start to the year as sales volumes and prices tumbled in January. They say their median selling price has now fallen by -$240,000 from its November 2021 peak, a -19.4% fall. (CPI inflation in those 15 months was +8.1%.) New listings also dropped sharply in December, even though existing listing levels remained high.
BUILDERS DON'T
Building consents issued in Canterbury surged in 2022, rising by +1184 more than in 2021. That eclipsed the rise in the Auckland region which was up by +772 on the same basis. All up, 8898 dwellings were consented in Canterbury in 2022, compared with 21,301 in Auckland. Canterbury and Auckland account for more than 60% of all 2022 building consents issued. There was a significant tailing off in Auckland in December with -25% fewer consents than the same month a year ago. But there was no tailing off in consents issued in the month in Canterbury. At the same time, dwellings being consented got smaller, with floor areas falling on average by -10% as there was a shift from full houses to smaller townhouses.
HLPI EXPLAINS THE CPI
According to Stats NZ's latest household living-costs price indexes (HLPI), household mortgage interest costs soared by +45% in the year to December 2022, helping push up the living costs for Kiwi households by +8.2%. A major difference between the HLPIs and the CPI is that the CPI includes the cost of building a new house (which rose 14% in the year to December), while the HLPIs instead includes mortgage interest payments.
OFF THE TOP SPOT
New Zealand is ranked second equal with Finland in the latest Corruption Perceptions Index, Denmark is now clearly at the top of the ranking. New Zealand’s score dropped one point to 87 while Denmark improved by 2 points scoring 90. New Zealand’s score is affected by a gradual decline in its score on three of the eight component indexes that contribute to its ranking. These three indexes all survey business leaders – international and domestic - about their experience with public service corruption.
BANK OFFERS CASH GRANT FOR FLOOD VICTIM CUSTOMERS
Westpac has launched a $1 mln fund to help its small business customers impacted by the floods in the upper North Island. Small business customers who meet their eligibility criteria can apply for a $2,500 cash grant to help with urgent expenses or repairs.
STRONG DEMAND FOR NZGBs
There were three NZ Government Bond tenders today for $400 mln on offer in total. 119 bids were received involving $1.2 bln, leaving $800 mln unsatisfied. 35 bidders offered $495 mln for the $200 mln May 2028 bond and 17 won something at an average of 3.94% which was the same as the yield two weeks ago for this same bond. There were 61 bids for the $150 mln on offer for the April 2023 bond and 19 won something at 4.09%, which was marginally higher than the 4.05% yield two weeks ago. But the most popular offer was the $50 mln April 2037 bond which attracted 23 bids and $231 mln and more than 4x oversubscribed. The seven winners got that at 4.29%, well up from the 4.18% two weeks ago.
AUSSIE REBOUND
In Australia, their building consent levels rebounded very strongly in December ending a period where they languished. Bouncing back most strongly were approvals for new apartments, surging by more than +50%. However, despite this December jump, Q4-2022 consent levels are still lower than Q4-2021.
MOVED ON FROM COLONIAL RELIC
And the Australian central bank has decided to dump the head of a British monarch from their currency banknotes. What took them so long? Lets hope we do the same soon. It's cringe to have foreigners on such sovereign paper, especially a family as disfunctional as that one.
SWAP RATES FALL SHARPLY
Wholesale swap rates likely retreated today with chunky retreats across the curve all driven from the US Fed's positions. The real action comes near the close however. Our chart will record the final positions. The 90 day bank bill rate is up +2 bps at 4.91%. The Australian 10 year bond yield is now at 3.51% and down -4 bps. The China 10 year bond rate is little-changed at 2.95%. The NZ Government 10 year bond rate is now at 4.12% and down -7 bps, and now just below the earlier RBNZ fix at 4.13% which was up +3 bps. The UST 10 year dropped back -11 bps on the Powell press conference remarks to 3.41%.
ALMOST ALL EQUITIES RISE
The press conference remarks after the US Fed rate hike changed the market mood. Wall Street rose almost +1.1% after being lower prior to the presser. Tokyo has opened up +0.3%. Hong Kong has opened up +0.6%. However Shanghai has opened down -0.3%. The ASX is up +0.3% in early afternoon trade. The NZX50 is up +0.4% in late Thursday trade.
GOLD RISES
In early Asian trade, gold is up sharply from this time yesterday at US$1953/oz and a +US$28 gain, almost all currency-related.
NZD FIRMS FROM SINKING USD
The Kiwi dollar is at 65.2 USc, and up almost +1c from this time yesterday after the hawkish press conference from Powell as the USD sank. Against the Aussie we are still down at 91.2 AUc, and unchanged. Against the euro we are also still down at 59.2 euro cents and also unchanged. The TWI is now at 71.6 and +30 bps higher in a day and all on the USD.
BITCOIN RISES SHARPLY
The bitcoin price has risen sharply today, up almost +US$1,000 from this time yesterday to US$24,064 or +4.3%. Volatility has been high at +/- 3.2%. Fed boss Powell's mention that "the disinflationary process has started" affected this market too.
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117 Comments
"IMF urges Australia to restrict tax breaks for the family home...That’s a very costly tax exemption and benefits disproportionately the wealthy households"
If the IMF suggests CGT on even the family home, I shudder to think what they think of our property taxation mess.
Whether they liked it, wanted it, or not hundreds of thousands of NZ household have sky rocketed in value, simply by living normally in their family home. Those $ billions must be very tempting for the Greens at least? Last election time it was the fairly naive, brazen and blunt tool wealth tax for which the catchment has now of course hugely increased. Await their new manifesto with interest.
I would assume that any CGT here could be based on the next transaction after implementation or CV, whichever is the lower, adjusted (as it is in Aussie) for inflation.
eg: Sell a property today with a CV of $950k for $850k and CGT is calculated in the future based off $850k. On the other hand, sell it for $1,000k and anything over $950k is CGT assessable at the next sale.
Not perfect, but a starting point. (If the CV is seen as 'too low', then a review can be asked for at the time of implementation of the CGT regime, and more rates paid as a result!)
Yes the IMF watching to see if the NZ and AU housing markets are going to go back to their old ways later this year or next. All depends on what National want for NZ (especially those under 25) for the future. The debate later this year will be interesting after policies are announced.
As an aside, Wayne Brown will be realizing about now the reality that Auckland really needs 10% rate rises for each of the next 10 years. OK, they will sell the old Manukau Councils airport shares this year to kick the can down the road for another couple of years, but when theres nothing left to sell he wont be able to keep rate rises below 5%.
Hesus wept, are you really proposing taxing capital gains on primary residence? How does anyone relocate with work if they are unable to sell and buy a comparable house due to CGT? How about the RBNZ maintain th integrity of the NZ$ by raising rates, then we don't have to worry about it. Also, the IMF are about as credible as the WEF, ie to be ignored completely.
The NZ family home is sacrosanct. It is an inherent and vital feature of our civilisation here. To alter that status, to provide an income stream for the government, from whatever angle or form, would assail the very nature of our society. NZ governments have failed to sufficiently differentiate between household and other property ownership. Had they done so there might have been clearer and more effective controls on property speculators. That goes back to Norman Kirk’s much unappreciated Labour government that introduced the Property Speculation Tax. That worked sufficiently well for Muldoon to keep it intact until into his second term and then met its fate at the hands of all the industry lobbyists of that time.
"The NZ family home is sacrosanct. It is an inherent and vital feature of our civilisation here."
I'd say the basis of our civilisation is bidding up prices for shelter then relying on the govt/banks to transfer wealth to us to make the sacrifice worthwhile.
As the govt slowly goes broke it will reluctantly go after all the wealth that is left - the equity in those expensive, sacrosanct little temples of civilisation. Oh well.
Spot on, I agree with everything you've said (a first ;)).
Bottom line is its still the same house with the same market value compared with others. Money is simply the medium of exchange & its relative price in $ irrelevant & set by factors outside the homeowners control.
Not sure how you can have a "Corruption perceptions index", I mean take JA for example the perception overseas was she was the bees knees but here in NZ the perception was entirely different leading her to quit. Overall corruption is pretty low here but at the same time you wouldn't want it to be any worse.
Coincidentally the complacent perception of NZ corruption is being discussed elsewhere today.
https://democracyproject.nz/2023/02/02/bryce-edwards-3/
"New Zealand is the second least corrupt country on earth according to the latest Corruption Perception Index published yesterday by Transparency International. But how much does this reflect reality?"
"...But the huge problem with this Taranaki stadium job is that in pitching Mrs Stokes and Ms Paterson, Mr Robertson somehow failed to mention (we’ve seen the emails) both women already had some big jobs, just down the road with the Hamilton City Council.
We're not talking part-time jobs either. Ms Paterson, at the exact time of the stadium contracts being signed (October 2019), was already the full-time parks manager for the Hamilton City Council – on $25,000 a month. She and Mrs Stokes were also being paid an additional $150,000 to review the same Hamilton parks department."
https://crux.org.nz/crux-news/inside-the-cashed-up-world-of-the-queenst…
Wouldn’t take much journalistic digging to be honest.
You don’t think a looming development sector collapse is worthy of some investigation? Even putting aside the economic impacts, it could generate significant social issues.
Do we only do post hoc journalism now? Stories only once the ambulance has fallen off the cliff or is in the final stages before descent?
Property grab: AFP smashes alleged $10 billion Chinese money-laundering operation
The AFP operation, and the fact that the organisation targeted is just one of several large money-laundering syndicates operating in Australia, will raise fresh questions about the role of foreign funds in inflating the nation’s property market and other legislative and policy gaps in the financial and migration systems that continue to be exploited by criminals.
New Zealand is ranked second equal with Finland in the latest Corruption Perceptions Index,...These three indexes all survey business leaders – international and domestic - about their experience with public service corruption.
The idea that NZ is holier than thou when it comes to corruption is nonsense. First of all, you have to define what corruption is. And it's always the vested interests in Western countries that define this for their own purposes. The reality is that 'institutional corruption' in NZ is as bad as anywhere. And it's subjective. There are two books from Aussie 'Game of Mates' and 'Rigged' that I haven't read but want to. The issues in Aussie are more or less the same in NZ.
Every hour you work, thirty minutes of it goes to line the Mates’ pockets rather than your own. Mates in big corporations, industry groups, government departments, the halls of parliament and the media skew the system to suit each other. Corporations dodge taxes, so you pay more. You pay more for your house and higher interest rates on your mortgage, more for your medicines and transport, and more for your children’s education and insurance, because the Mates take a cut.
Rigged uncovers the pattern of political favours, grey gifts and information sharing that has been allowed to build up over two decades. Drawing on extensive economic research, it exposes the Game of Mates as nothing less than cronyism on a grand scale across Australia, and how Australia has fallen behind other countries in combatting it.
the update on the Adani saga is they pulled out of the 2.5B$ IPO,After Forbes shirt fronted the Adani group for buying shares in the IPO,as it was undersubscribed after allegation by Hindenberg of over leveraging and the purchasing of Shares in other IPO'S by related parties.
Boy Chuppie is 1000 times better than the last PM. A decent average guy, and not pulling stupid childish faces all the time. He was on prime news moving furniture and giving sensible comments. As opposed to ardern wrapping bear hugs around everyone and commiserating
If the UN offer her a job they better be careful.
Misogynist is a whitewash excuse.
I’d say Hipkins is probably the best politician going around at the moment. 2nd best would be Seymour, he’s very good at debating but doesn’t really have any good policies going himself. After that probably green MPs like Chloe and Shaw. I don’t mind Chris Bishop either. Anyway that is just my opinion.
Luxon can only be Luxon. By now it is obvious, well to me at least, that he has about as much charisma as a boiled egg. But boiled eggs are hardly of an unknown quantity and can be trusted by most diets. On that basis my advice would be for him to continue with developing a sensible, solid and respected persona and leave the flamboyance to others better equipped. He won’t trouble Hipkins in the house anymore than he troubled Ardern but his bench, the next level, certainly will and even more so will Seymour of ACT who has already done so on numerous occasions.
"The size of New Zealand's informal economy is estimated to be 10% which represents approx $26 billion at GDP PPP levels"
https://www.worldeconomics.com/National-Statistics/Informal-Economy/New…
Sharesies - restructure and redundancies likely:
https://www.nzherald.co.nz/business/sharesies-announces-restructure-red…
I was a founding trader on Datek part of the Island ECN, full your boots for $1000 usd a month... and we did, you could be on the actual bid and offer on nasdaq at the same time..... I was sitting on a backup 155mb wan link and my trades would go through in the us and it took 1.5 seconds before they appeared in the uk on Reuters.... back then it was 1/8 spread on CSCO or ORCL and you just played MM all day for 1k shares each way 1/8 was about $125 usd.... we would do hundreds of trades a day, human HFT
What did they expect was going to happen when they did away with their primary (only?) value proposition - making investing in shares cheaper.
If you suddenly make it a whole lot more expensive, and you've got no real competitive advantage any more versus other platforms, then having a cool and trendy interface and a Facebook group isn't going to save you (especially when everyone in the Facebook group has turned on you anyway).
WHAT THE FLIP ?? 27 new build houses to a single buyer. This would not have happened in 2022, confidence is growing.
it was on the wrong side of summer street, so sun on front, was a 3 dbl 1 single rm old villa. still got it for about 460 and it was cash flow pos with 10% down.... tenant died (long story) so moved in then went sailing in the pacific for a year off and while up there the gfc hit, got back and dumped it for about 800. Boomers have first world problems aye.... funny how being in the pacific with only SSB and Radio NZ on AM. personally i think you can have too much real time info... I actually think the reality is always staring you in the face, real time info is not that useful re property. its like a super tanker
In all fairness the widespread tendency for many members on this site to try and "call it" is kinda irksome. All most people can do is try and establish where things will head and identify trends.
If anyone here had any reliable prowess in this realm, well then they probably wouldn't be on here.
"IT GUY | 2nd Feb 23, 10:43pm
...my partner tells me we could be a lot richer if i would just listen to her more, she is very good at seeing the bottoms, I excel at seeing the tops in property. I am also in charge of the finance."
So your partner sees when the market hits rock bottom but you ignore her.
And whilst you're good at seeing the top of the market, you bought your 16ha across from the chicken farm in 2021. You cant have it both ways and blame your partner for that decision
Whats your partner saying now 🤣
Just speaking to a mate who is returning to Sydney with his family in a few days. His parents’ place got quite damaged by the floods.
what he couldn’t understand is the lack of warnings issued as the storm approached. That surely enough weather data existed to suggest it was going to be a major event.
He said that in Sydney they would have been much more active on the warnings.
Any thoughts? His thoughts echoed mine, but maybe there is a good explanation?
Surely on the morning of that day they could have seen the big bloody thing coming towards Auckland?
I was working from home and recall it pouring down most of the day. I remember looking at the Herald at something like 2pm and there was bugger all about it.
I find it very odd.
They struggle to forecast rain occurring correctly at all.
I would have thought accurately forecasting the volume of rain was even harder again.
Im sure we will now get a disproportionately paranoid response mechanism, complete with colour coded gradient indicator.
These rivers are not like old normal forecasting, normally the rain is focused around a narrow front but these things are nuts. Cannot remember these back in the 2000s while sailing, we used to be super focused on the squish zones between the High and the low as that could cause 90-120knot winds off the north island but these rivers of rain did not used to happen as much, neither did the warm sea temps driving then
People can reliably catch Snapper in my neck of the woods where previously you'd never see any. I too am also getting rain events that create surface flooding I've never experienced before, last year one of my bores blew it's stack given the huge amount of water in the aquifers.
So it may be the different weather environment makes forecasting even harder again because the models have changed so much.
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