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
Unity Money has raised its floating rate to 8.29% which is a +34 bps increase.
TERM DEPOSIT/SAVINGS RATE CHANGES
ICBC has raised their term deposit offers, and are the next bank to offer 6% for a one year term. Update: ANZ has raised most of its rates for terms less than 1 year. Their new 6 month rate is now 5.55%.
Q2 STARTS WEAKER THAN Q1
ANZ's Truckometer monitoring shows that the Light Traffic Index (cars) fell -2.8% m/m in April, while the Heavy Traffic Index (commercial) fell -2.2%. This comes after the March quarter data suggests a small lift in activity in the quarter, "consistent with our forecast". They also noted that "falling traffic volumes in April marked a weak start to Q2, but weather could again be playing a role".
BROWNOUTS COMING?
Transpower says it is working closely with the electricity sector to manage potentially tight supply during cold snaps this winter - and warns consumers may be asked to cut back on power use at peak times. They say: "These tight supply situations during short periods of peak demand are a result of increasing electricity demand as well as New Zealand’s transition to a future with a decarbonised economy powered by renewable electricity generation."
TOWER BOLSTERS REINSURANCE
Insurer Tower says it has purchased an additional $100 million of reinsurance reinstatement cover for the remainder of its September financial year. This covers the increased estimate for the ultimate cost of February’s Auckland and Upper North Island extreme weather events. Prior to this Tower says it had protection for a potential third catastrophe event up to $889m in the financial year. This additional purchase of $100m of cover reinstates protection for a fourth catastrophe event up to $889m in the financial year.
ESSENTIALLY EQUITY BUT WITH BOND YIELD & WITHOUT FAT BANK DIVIDENDS
BNZ said that it is "considering making an offer" of up to $250 mln of perpetual preference shares and will accept unlimited oversubscriptions at its discretion. This paper will constitute Additional Tier 1 Capital for BNZ’s regulatory capital requirements and to have a credit rating of BBB from S&P. The shares will not have a fixed term and will remain on issue indefinitely if not redeemed by BNZ. If certain conditions are met, BNZ may redeem the PPS after 6 years and on each quarterly scheduled distribution payment date thereafter, or at any time for tax or regulatory reasons.
WILLFUL FORGERY?
The FMA hit an alleged financial advice forger with four charges after ignoring their stop order. Wisdom House Investment Partners director Paul Loo faces up to 10 years jail for this forgery.
A JUICY MONOPOLY
The TAB, which has a virtual monopoly in the local market on sports betting, has contracted out its position to a giant British betting operation, Entain, in return for a commitment to 'invest' $900 mln in the local horse racing industry over five years. For that they get a 25 year exclusive (ie monopoly). Minister for Racing, Kieran McAnulty, approved the deal with the London-listed giant today, two months after Entain was selected as the preferred bidder. Cabinet also agreed to extend the TAB’s monopoly over sports and racing betting to the online environment, following a lobbying campaign from Entain, which offered to make an additional and upfront payment to prevent unlicensed offshore competitors from wagering here. (This will now be negative for our current account deficit in a way it wasn't when the TAB ran it.)
"SAVE THE PLANET"?
ResearchIP's May 2023 Sluice edition includes a link to how quantum computing might "save the planet". Quantum computing could bring about step changes throughout the economy that would have a huge impact on carbon abatement and carbon removal, including by helping to solve persistent sustainability problems such as curbing methane produced by agriculture, making the production of cement emissions-free, improving electric batteries for vehicles, developing significantly better renewable solar technology, finding a faster way to bring down the cost of hydrogen to make it a viable alternative to fossil fuels, and using green ammonia as a fuel and a fertiliser. Only very much faster computing can do the work to optimise these sorts of benefits, they say.
SLIPPING ACROSS THE DITCH
While not strong in the first place, the latest PMIs for Australia indicate a further softening of activity. They services PMI fell to 51.8 (now only just expanding) in May. Their manufacturing PMI didn't change from its contraction, holding at its weakest level since May 2020.
EXITING STAMP DUTIES ... REPLACED WITH LAND TAX
In Victoria, their state government has said it will abolish stamp duty for commercial and industrial properties and replace it with an annual property tax in a move it says will inject AU$50 bln to the state economy. From July 1 next year, commercial and industrial properties will transition to the new system as they are sold, and the annual property tax will be payable from 10 years after the transaction. South Australia has abolished transfer duty on commercial or industrial property deals, it has not introduced an annual property tax. The ACT has removed stamp duty on transactions below AU$1.7 mln, although it still imposes land rates. The Northern Territory retains stamp duty, but does not have a land or property tax. In NSW they are more focussed on reforming their stamp duty on residential properties sold. Queensland don't seem to be changing their stamp duty taxes any time soon.
ON THE MOVE UP IN JAPAN
It's the opposite in Japan. Their flash May PMIs have come in strong, in fact the strongest rise in private sector activity in almost ten years. Their services sector expanded faster at 56.8, and their factory sector shifted from a contraction in April to a modest expansion in May.
SENTIMENT ON THE RISE IN SOUTH KOREA TOO
Their central bank's Composite Consumer Sentiment Index came in at 98 points in May of 2023, up from 95.1 points in the previous month. It marked the highest figure since May a year ago as easing inflation expectations led to a rise in "living conditions".
SWAP RATES HIGHER
Wholesale swap rates are moving back up today after yesterday's slight pause. However, the real action in swap rates comes near the close. Our chart will record the final positions. The 90 day bank bill rate is up +1 bp at 5.83% and 58 bps above the OCR. The Australian 10 year bond yield is now at 3.64% and up +5 bps from this morning. The China 10 year bond rate is down -2 bps at 2.72%. And the NZ Government 10 year bond rate is now at 4.47% which is up +3 bps, and still above the earlier RBNZ fix at 4.40% which is down -2 bps from yesterday. The UST 10 year yield is now at 3.71% and up +4 bps from this time yesterday.
EQUITIES MIXED AGAIN
In New York, the S&P500 ended its day unchanged on Wall Street as markets awaited progress from the politicians on the debt limit. They are going to have toi suffer through more theater, but confidence is still there that a resolution will come. Tokyo has opened its Tuesday session up another +0.6% and a new all-time high. Hong Kong is down -0.3% in their early Tuesday trade. Shanghai is down -0.8%. The ASX200 is up +0.3% in afternoon trade todat. The NZX50 looks like it will close out today's trading down -0.3%.
GOLD FALLS
In early Asian trade, gold is down at US$1961 and down -US$17 from this time yesterday. That takes this benchmark price back to late March levels. Earlier the gold price closed at US$1972/oz in New York, and earlier still at US$1970/oz in London.
NZD HOLDS
The Kiwi dollar is little-changed from this morning at 62.8 USc. Against the Aussie we are also unchanged at 94.3 AUc. And against the euro we are still at 58 euro cents. That means the TWI-5 is little-changed at 71.3.
BITCOIN FIRMS SLIGHTLY
The bitcoin price is a lower today, now at US$27,045 and up +1.6% from this time yesterday. Volatility over the past 24 hours has been low at just over +/- 0.9%.
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130 Comments
Auckland is either flooded, been flooded, about to be flooded, or bloody muddy.
F all is going to sell this winter with OCR uncertancy and the election coming up.....and vendors wanting last years prices.
If you think things are bad now, wait till Labour/Greens/TMP gets back in and 50,000 famillies try to leave NZ at once.
They will put a leavers tax on....
Ripple control is on the way out too, new installs are moving the hot water cylinder over to the smart meter control.
For some reason vector are saying not to put other controllable loads via the smart meter.
https://www.vector.co.nz/special-pages/hot-water-load-control
Octopus seem to be able to control the hot water via the smart meter
https://octopusenergy.nz/blog/hacking-hot-water-to-save-money?
"At peak times". NZ - unlike many other developed countries - has few in-built mechanisms to manage peak loads. Why? The generators make much more if we have high peaks.
Off peak times we have plenty of capacity ... for now. And this is where Onslow comes in. It becomes a massive battery to store energy that is surplus at off-peak time (or when the wind is blowing, sun shining, etc.) but can also provide capacity for those peak-times.
We rarely have surplus power, we might have surplus capacity, but then we simply throttle back the existing hydro. (its much more effective than running turbines to generate power to transmit over to a set of pumps to pump water up a hill)
And theres this little thing called the cook strait cable, which stops us from moving much south island hydro to the north island in peak times.
Onslow is a $16 billion (+ cost blowouts) hole in the ground.
Probably only really going to help if those houses have some sort of storage system (battery or ? ), unfortunately solar doesn't tend to produce much power at peak power consumption hours.. like 7pm in a midwinter cold snap, so without way to move that generation to match demand (or move the demand to match generation - timer functions on washing machines and dryers etc to run in the middle of the day etc) its of limited use.
I could leave the EV at home on my partners work from home days and charge it if I had solar, but really not much else we can conveniently move to off peak (most of our washing etc already gets done off-peak, but TV, heat pump, lights, cooking dinner aren't so easy to move to off peak.)
If only there were an affordable small battery on the market. know of any?
I'm always amazed... reading about lebanon the other day, for about 6K you can get full off grid solar and batteries. While in nz a small battery to get you through peak would be maybe 2 or 3k. Solar with a powerwall or LG equivalent is more like 20K.
Onslow is a $16 billion (+ cost blowouts) hole in the ground
Agreed. A better use of those billions would be to increase baseload generation from solar, wind and geothermal. During times of surplus generation, this will ensure we draw less water out of our hydro lakes and leave more for intermittencies.
Tomorrow I am giving to our daughter the Grahame sydney print of the Rock and Pillars painting with red slashed windmills. It is her 50th birthday.
I do hope Grahame paints one of Lake Onslow with the same pointed message. We farmed on the Maniatoto, and I have a raw resistance to the Lake Onslow project.
Maybe...https://www.bassettbrashandhide.com/post/bryan-leyland-the-wind-and-sol…
Oz has had major delays and cost overruns on its own $6B - $10B - ? pumped hydro scheme, now the tunnel boring machine is stuck underground for "weeks or months" longer.
https://www.abc.net.au/news/2023-05-23/snowy-hydro-spent-100m-on-geotec…
I think it’s a bad time to invest in the grid:
- The more you invest the more you have to charge to pay for the investment
- Higher charges will result in more households producing and storing their own
- More households producing their own will mean less using the grid and higher costs for those using the grid
- Goto 2
The capacity of all those Tesla walls would be about 7GWh compared to about 5TWh for onslow. Onslow is about a thousand times more cost effective per unit of storage, and that's ignoring the much longer live expectancy leading to wildly cheaper ongoing costs (no need to build a new dam in 20 years, but you will have to replace all the power walls around then).
You do of course mean 16bil, not 16mil, I assume?
Doesnt matter how big it is if theres no use for it. Existing hydro lakes are big enough to time shift day to day and even week to week variations in renewable generation, and the amount of new renewable we will need to electrify transportation, and process heat means we simply over build it a few percent and the raison d'etre for Onslow is gone because dry winters don't matter anywhere near so much.
Add the fact that Onslow is in exactly the wrong place to buffer North island renewable and demand mismatch and it's a bloody dog of idea.
As would be expected, Taupo has a lot more water than is normal for this time of year. If we struggle this winter it doesn't bode well for the future.
higher than avg for both NI and SI, but more so in the NI
https://www.transpower.co.nz/system-operator/notices-and-reporting/week…
Who would have thought that increasing the population significantly via migration without building infrastructure and hoses wouldn't create a 'crisis'. I have been waiting for the words 'Power Crisis' to come up for years, as this was a slow car crash, and governments just kick the can down the road.
This will now be negative for our current account deficit in a way it wasn't when the TAB ran it
B a n a n a R e p u b l i c
The smart better will just continue using VPNs and Betfair and anyone else to narrow their margins.
Hedging at the same venue gets a worse price , they algo you....
Sounds as wise as abandoning incentivising productive business
This didn't happen though.
If you have a productive business, it's making higher net income than property. That'd the incentive. If the business isnt productive, it's not a business. People aren't investing in property in lieu of starting or investing in a business.
The amount of businesses is more relevant to the size of the market and the opportunities within
I hear plenty of Landlords claiming that what they do is a business and it is unfair they can no longer deduct interest costs.
The issue has been that if someone had a set amount of capital, in terms of tax, investing in property has been much more favorable than investing in a productive business.
A well-run business will make more money than buying property but it requires a lot more work, knowledge, talent, and risk than buying an investment property, renting it out, and watching its capital value explode as a result of loose monetary policy and favorable tax advantages, whilst paying zero tax on the main draw that has been capital gains opposed to yields.
There's a story (very popular here) that housing's expensive because instead of investing in businesses that earn lots of money and pay big salaries, all that money and energy went into housing.
That ignores many other reasons why housing is expensive, and we don't have as many high paying companies and jobs.
Starting, improving or buying a business isn't an analogous undertaking to landlording. Increasing actual productivity in a business will also be a more lucrative investment than one in property - otherwise you haven't improved productivity.
That's not the same proposition as a profitable viable business though. Ones money in your pocket, the others an uptick on an asset ledger.
Places without as favourable tax conditions still have unaffordable expensive housing so I'm not sure the apocalypse would be as exciting as you imagine.
What people have been saying is that we should of been investing in productivity and infrastructure instead of pouring money into inflating land values, and that for the same amount of debt it would of been far more beneficial in the long run. This isn't the same as saying "house prices are expensive because we didn't invest in productivity and businesses", you've got the cause and effect mixed up.
I know you disagree with this but it does seem that most countries that have invested in infrastructure, technology and productivity seem to do better than those that have not.
Nobody is claiming housing is expensive solely because of people investing in real estate rather than buisnesses, it's one reason amongst many, and the a reason why our capital markets are much shallower than they should be for the size of our economy. But not the only reason or even the primary reason.
The main reason housing has become so expensive is because of record low-interest rates, and a favorable tax environment that encouraged investing in real estate.
What people have been saying is that we should of been investing in productivity and infrastructure instead of pouring money into inflating land values, and that for the same amount of debt it would of been far more beneficial in the long run.
And I'm saying, you can't look at the total value of mortgage debt (or property investment funds to be more specific) and assume that represents a 1:1 loss in money invested into other things. It's not like a business owner is weighing up spending x amount on some automation robots to greatly increase their productivity, vs buying a 2 bedroom unit to break even and maybe make $25k a year in untaxed capital gains.
There is a sadder reality that mature neolib economies are inherently inequitable - because we are ridiculously more productive in many areas, but the windfall goes to the capital owner rather than the worker. The bird overlooking 12 automated checkouts at the supermarket is still getting paid bugger all, but the supermarket just got to get rid of half a dozen or more checkout operators.
I know you disagree with this but it does seem that most countries that have invested in infrastructure, technology and productivity seem to do better than those that have not.
Investing in those things can improve the quality of production of an economy, but the problem is there is also not a guaranteed return on these investments.
For instance, the government has invested billions into fibre infrastructure in NZ, we have on average better connectivity than the likes of the USA or Australia (it's obviously faster in specific instances in those places, I'm talking average). Has that resulted in an increased windfall? Or did we piss all that money away?
Practically every country is following the model of investing in education, infrastructure, etc as a road to prosperity. Dare I say it, that in itself will attribute to a diminishing return on investment in these areas.
The main reason housing has become so expensive is because of record low-interest rates, and a favorable tax environment that encouraged investing in real estate.
The main reason a new house has become so expensive is because of a long list of factors, and just thinking it's low interest rate derived speculation detracts from your actual issue; an inability to provide the market with enough affordable housing. This is not an easy problem to resolve, which is why there aren't many simple case studies to follow, at best it's a list of what not to do.
It's not even whether Ma and Pa are useless at running a business. Productivity is output relative to input, so if there's a net profit case for investing in productivity, you're going to do it - it's like a fundamental imperative and responsibility of a director/shareholder.
I get what you're saying here and I do agree to an extent, you can't look at mortgage debt and see that as a 1:1 loss to other investments. The main benefit of diverting investment away from property investment is that we may of got a much healthier capital market, but thats all in the past and I can't say what might of been without any firm evidence to back it up.
What I am trying to say is that our tax system has encouraged investing in property over other investments as reducing or increasing taxes can incentivize behaviours. What degree of effect this has is debatable but the concept of Pigouvian taxes is generally sound.
I would say in regards to fibre that it is extremely difficuilt to quantify the return from investment infrastructure, would we of been better off if we had never invested in it and stuck with copper? I haven't looked into this specific topic but I would assume we wouldn't. Generally the fibre rollout has been viewed as a huge succsess, do you think we shouldn't of invested in it? Some would also say Japan and China have wasted huge amounts on high speed rail. Would they of been better off if they hadn't invested in it and didn't spend that money?
Once again, many issues lead to housing crisis, and it is hard to deny that low interest rates were a major contributing factor, but not the only one I am aware of that.
And it certainly isn't an easy problem to solve but we can at least try and solve it, there are things the government can do to reign in the property market. I'm not sure what you stand for on this topic because generally you seem to want nothing to be done and have us all resign to the fact that all outcomes are inevitable and there is nothing that can be done to effect them. These problems are manmade and therefore, they can be solved by man.
The main benefit of diverting investment away from property investment is that we may of got a much healthier capital market, but thats all in the past and I can't say what might of been without any firm evidence to back it up.
Yeah I mean part of the reason property got more attractive over the past decades is because of the 87' sharemarket crash; people lost large amount of their money (or all of it) investing in more active sectors of the economy.
I would say in regards to fibre that it is extremely difficuilt to quantify the return from investment infrastructure, would we of been better off if we had never invested in it and stuck with copper? I haven't looked into this specific topic but I would assume we wouldn't.
Our internet wouldn't be as good for sure. I mentioned it partly because it's an oft-forgotten example of NZ investing over and above our peer's averages in infrastructure or tech. So while there's many cries of "we haven't invested in infrastructure", we actually have been investing a lot over the years. That's not to say our infrastructure is world leading or perfect by any stretch, more that the yield from the investment is dubious. "Nice to haves" rather than must-haves.
Some would also say Japan and China have wasted huge amounts on high speed rail. Would they of been better off if they hadn't invested in it and didn't spend that money?
About 90% of China's high speed rail is loss making. It's not been a good return on investment. It's a great example of blindly investing in capital infrastructure and it returning a very poor yield.
And it certainly isn't an easy problem to solve but we can at least try and solve it, there are things the government can do to reign in the property market. I'm not sure what you stand for on this topic because generally you seem to want nothing to be done and have us all resign to the fact that all outcomes are inevitable and there is nothing that can be done to effect them.
I think there's a large amount of people framing the property 'crisis' in a very partisan way that puts way too much effort on trying to be restorative or punitive at the sake of detracting from the core issue of there not being enough houses available for people at the right sort of price. The quickest way to resolve that is to find a way to introduce new housing supply to the market at a price that undermines the status quo by a considerable margin. Unless you can do that, everything else is really just whistlin' dixie.
The sharemarket crash of 1987 did manage to do a lot of damage to kiwis view of the stock market. It seemed like there was some pretty nutty stuff going on, insider trading that wasn't banned until 1988, valuings that were 50-60 times earnings, the herald had a really good article on it a while ago.
For infrastructure, part of it is for yield, and part is for quality of life. The yield on investing in better health infrastructure might not be economically beneficial but has other benefits beyond money. Same with the fibre rollout. Part of the reason we invest in infrastructure is for improving productivity and efficiency, and part is to make the country a nicer place to live. Im sure many Aucklanders would have appreciated if we kept the trams around and had better public transport so the city wasn't gridlocked every day. My poor mum spends up to an hour and a half each way in traffic every day I wish there was an easy way to fix that.
Thought you'd bite on the Chinese HSR lol. Interestingly China's high-speed rail showcases both the best and worst of the decision-making in regard to infrastructure. The first phase of HSR has been very effective, linking major population centres and promoting economic growth - and done at a time when there was a risk of an economic downturn from the 2008 global recession. It's also a big part of their climate reduction plan and keeping emissions down.
The second phase, in contrast, contained decisions so dubious that the Railways Minister received a suspended death sentence for them.
The upside of this style of governance is that if something needs to be built the government will build it. The downside is that if something doesn't need to be built the government will build it.
I think in general not having enough housing for your workers and rising housing costs is economically negative in the broader context, and I agree the only real solution is to build more housing that is available at a reasonable price point.
All easier said than done though and it's going to require a lot of effort from both the private and public sectors. There is also something to be said for how poorly utilized some of the existing stock is, e.g airbnb's taking stock off the market, single pensioners living in detached houses near central Auckland rail corridors, empty lots being land banked, all tricky to solve easily.
Got $6 at the TAB a few months ago on Ireland winning the World Cup. Now at $4.50. Also got money on the French.
I reckon the Aussies getting to the final isn’t a bad bet. They have a reasonable set of players and Eddie Jones is a crafty bugger.
Can’t see the ABs winning it, pack isn’t strong enough, lack of charisma and we are flaky at number 10.
Question: if I have a non landlording business, do I refuse beneficiaries service to avoid being labelled a bludger?
Maybe if we let Darwin take over and stopped giving the poor and infirmed subsided food, utilities and clothing it'd make all that stuff cheaper for the rest of us too!
I will do it now since the comments section has been cleaned up massively, not sure how much moderation / banning / last warnings has contributed to that, but it’s much much better.
Was godawful for quite a long time, and I come here more for half a dozen really insightful commenters rather than the articles if I am honest.
So I guess it’s well done to the editors, and that hurdle I had has been addressed.
Singapore also has an effective land tax that has worked wonders for them. Look at how efficient that country is.
https://www.rtpi.org.uk/blog/2017/april/lessons-from-singapore-about-land-value-capture/
That link refers to Land Tax as "The Development Charge applies to development applications on freehold sites, while the Differential Premium is levied as a fee for the lifting of title restrictions on leasehold sites previously sold by the government to developers." which both levys we already have had here for many years.
I actually thought that Singapore had a separate land tax % that was charged in lieu of rates however I haven't visited for a few years now (I will be there next month so will ask).
From looking into it further it looks like Singapore doesn't have a direct LVT, But instead the government owns most of the land and leases it out for development. It’s not exactly LVT, but both of those places do obtain a fairly significant portion of public revenue from land rents.
My link up there is more refering to how they are utlising land value in order to pay for infrastructure opposed to NZ where land rent is massivly underutilised compared to other revenue streams like income tax and GST.
Bit of everything required.
Tataki is a bit of a joke and AT is long overdue for a big clean out. I would like to have seen Eke Panuku disestablished.
Perhaps greater ability to turn down massive plan changes in Auckland’s hinterland would help too. Another burden on ratepayers. Development contributions only pay part of the cost of infrastructure.
You seem to want Council to do more with less. It takes a massive team of planners lawyers, engineers to fight massive plan changes. If it goes to court and council hasn't done it's homework then they lose.
If you want to balance the books focus on the poor performing assets like parking. Sell it all or lease it out. At the moment it takes up a huge amount of space, prevents development, prevents efficient use of transport corridors, provides atrocious ROI for ratepayers and undermines private sector's ability to take up the reins.
Eke Panuku is one of the strongest and best run arms of the council. Would be disastrous to role those functions back into Auckland Council. If anything they need to take on more.
I just see lots of grandiose schemes from Eke Panuku that often don’t go anywhere. Having said that, I had a bad experience with them which might be tainting my view of them.
I never said get rid of planners, lawyers etc. I know the work they do and most of it is indispensable. A lot of the work is responding to private plan changes, government mandates etc. I am talking about targeted staff cuts in certain parts of the organisation, as well as a host of other things ( asset sales, rates increases etc). It can’t be just one approach to address the fiscal hole.
I won’t retrench on my AT views though - overbloated, arrogant, dysfunctional and in serious need of an overhaul.
Eke Panuku has to set a vision and try to get the wider community (both public and private) to buy into it. They are not always successful but if they weren't there to set the vision I can guarantee nothing would happen or it would happen in an even more fragmented way than it does already.
I get the impression you are pretty familiar with the delivery side of urban regeneration but the steps required to make them possible are pretty extensive and complex and Eke Panuku do these really well.
No arguments from me on AT, definitely needs reform. Having said that I don't see arrogance as their weakness, rather it is timidity and lack of confidence (which I guess sometimes can manifest as arrogance). If the Council set clear outcomes for AT to achieve and then backed them in how to operationalize them through some of the public push back AT would be more respected. Instead they are scared to follow through on what is actually required and this leads people to think they don't know what they're doing. They know what they need to do, they just don't have the spine to do it.
Good chat.
It's becoming very interesting. Interest rates up, wages up, interest rates up, wages up..... I do not recall ever seeing such a macroeconomic backdrop. The only thing that's missing is a currency crisis. But because we are "relatively" doing quite well, that's not going to happen.
If I had to pick the catalyst for tipping the economy over it would be the commercial property market.
Commercial real estate: Jamie Dimon says souring loans threaten banks (cnbc.com) - Dimon suggests here that US rates are going higher than expected. Up to 6-7%.
Commercial real estate prices fell 1% last quarter. This is the first fall in more than a decade. https://twitter.com/APompliano/status/1659214127435501572?s=20
Commercial real estate transaction volume has dropped significantly from its recent peak https://pbs.twimg.com/media/FwnqMPZXwAAiIRY?format=png&name=900x900
Auckland property suffered its biggest medium price drop in reported history at 2.9% for the month, this is fact... not spruiking doom. try to polish it any way you want..... i think this month 1.7% lets see, place your bets BONZAI how many properties have you purchased in the last 12 months HW2 while spruiking on here - have you followed your own advice?
Lets just say you wouldn't have wanted to follow your own errant advice. How did it go? A deep recession/depression like never seen before evidenced by financial devastation in the world sharemarkets. Human misery of sackings and redundancies en masse. Thats before you get to property WAKES and trips into property purgatory
Really Fukd up, but still ITGUY is the one who plays the tune and demands others dance.
You have a paddy in front of everyone here, if I mention there are THOUSANDS of confident buyers each month. So I better not
You are both probably right, the bubble is created by too much debt, and you would have to have guts to jump in now, however governments around the world know that if they let it collapse we will have some serious problems, and they will be very likely to be kicked out or worse (if the shit really hits the fan) so they will do everything to keep it from popping…..including throwing the poor under the bus. So, depending on your situation maybe it could be ok to buy…..I.e. safe job in a recession, right opportunity. However if you are unlucky……
If I had to pick the catalyst for tipping the economy over it would be the commercial property market.
Fair call. I was looking at the Smartshares Property ETF. Fallen off a cliff in past 14 months - inverse relationship with interest rates.
Only up 11% since inception in 2015.
Foreign ag workers will pump out on average 2.5x per hour more than a Kiwi. Many are paid based on volume, so the foreigner is earning nearly $50 an hr, while the NZer isn't earning minimum wage.
Gruelling physical labour sucks so you can understand why people don't want to do it. Good windfall for the shrinking amount that do.
Labour is not against immigration, quite the opposite. The Left are hugely in favour of open global borders and the free flow of people from the third world to the first. This achieves "equality". They just lie to the local population about it in order to get elected. In 2019 the number of visas issued was at an all time high, then Jacinda doubled down and handed out permanent residency to 200,000 unskilled workers who got a free ride through the 3 years of Covid simply because they were lucky enough to be in the country at the time the borders were closed. Now Chippy is overseeing even more immigration. Its all part of the WEF plan. Same thing is happening in Australia under their new Labor government.
What do all the capital gains tax-free, stamp duty free, exchange rate positive Aussie investors in that giant gridlocked parking lot called Queenstown do with their Airbnb holdings with AFR headlines like this over there tonight?
The stock of affordable units has shrunk to just 5 per cent of all suburbs across Sydney, sparked by rapid interest rate increases
Investors, holiday homeowners and commercial property holders will pay almost $5 billion of Victoria’s planned $8.6 billion COVID-19 debt levy as a result of lower tax-free thresholds, higher rates and extra fixed payments on their land tax assessments.
Sell, if they can find a Buyer.
https://www.news.com.au/national/victoria/politics/fedup-victorians-las…
"...
Those who own more than one home will pay at least $5000 over the next 10 years, with a new $500 annual tax for investment properties with a land value between $50,000 and $100,000.
The payment will increase to $975 for homes valued between $100,000 and $300,000, while an extra 0.1 per cent of the land value will be applied to properties worth more than $300,000.Mr Pallas said roughly 860,000 landowners would be affected by the land tax change..."
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