What happened Wednesday

Economy / news

A review of things you need to know before you sign off on Wednesday; Kiwibank cuts TD rates, real estate agent commissions rise, Govt moves on some key issues, Public Trust reports, swaps soft, NZD stable, & more

23rd Oct 24, 3:59pm by David Chaston

Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).

MORTGAGE/LOAN RATE CHANGES
Unity Money trimmed its fixed home loan rate offers for terms to 18 months. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
Kiwibank has cut between -15 and -35 bps from its key term deposit offers. Essentially this takes them down to where their main rivals had already got to. Unity Money also trimmed its key rate offers. All updated rates less than 1 year are here, for 1-5 years, they are here.

COMMISSIONS RISE FASTER THAN INFLATION
Real estate agencies are estimated to have earned $440.5 mln in residential commission in Q3-2024. This is a rise of +10% in the third quarter year-on-year, showing signs of steady growth

50% CUT FOR FOREST OWNERS
The Government has announced that it will cut the per-hectare annual charge for forest owners participating in the Forestry Emissions Trading Scheme (ETS) Registry from $30.25/ha/year to $14.90/ha/year.

ONE BETTER THAN THREE
The Government is moving to a sole AML regulator to be funded by levies, and will strip both the RBNZ & FMA of anti-money laundering supervisory roles.

CHANGES AHEAD
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NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. Tourism Holdings and Skellerup lead the gainers, Gentrack, Kathmandu and Tower lead the losers.

GOOD EXPANSION
Public Trust, the country's largest provider of trustee and estate administration services, today announced revenue of $83.2 mln for the year ended June 2024, up +14.3% on the previous financial year. The autonomous Crown entity posted a net profit after tax of $5.1 mln (up from $1.4 mln) and has declared a dividend of $2 mln. It has $1.4 bln FUM, up from $969 mln for the prior year, a +44% rise.

FMA PUBLISHES FIRST REPORT ON DIMS SECTOR
The FMA published its first monitoring report on the Discretionary Investment Management Services (DIMS) sector on Wednesday, finding room for improvement in provider processes and controls. DIMS is a large part of the wealth management sector in NZ and involves investors giving their providers the authority to use their discretion about buying and selling financial products on their behalf. The sector has funds under management worth $48 billion. Although the FMA’s report found that providers generally strove for positive investor outcomes, poor disclosure, and a lack of internal policies and/or procedures were common themes when it came to areas for providers to improve on in the DIMS sector. The FMA first surveyed DIMS providers in 2022 for this report and then followed up with further monitoring of providers in 2023 and 2024.

ANOTHER ACCUSATION OF MISLEADING BEHAVIOUR
In Australia, their third largest general insurer, QBE, has been challenged by regulator ASIC who has commenced court proceedings alleging they misled customers about the value of discounts offered on certain general insurance products. About ½ mln customers are affected. QBE also operates in New Zealand, so it is likely the FMA is also looking at how this matter has been handled here.

SWAP RATES SOFTISH
Wholesale swap rates are probably a little lower today at the shorter end. Our chart below will record the final positions. The 90 day bank bill rate is down -1 bp at 4.56%. The Australian 10 year bond yield is unchanged at 4.42%. The China 10 year bond rate is up +2 bps at 2.15%. The NZ Government 10 year bond rate is up +6 bps from yesterday at 4.57% while the earlier RBNZ fix was at at 4.49% and down -1 bp from yesterday. The UST 10yr yield is now at 4.23% and up +3 bps from yesterday. Their 2yr is up at 4.05%, so that curve is now positive by +18 bps.

EQUITIES MOSTLY QUIET
The NZX50 is now down -0.3% in late Wednesday trade. But the ASX200 is unchanged in afternoon trade. Tokyo is also little-changed at its Wednesday open. Hong Kong is up +1.1% at its open. Shanghai started up a minor +0.1% at its open. Singapore is trading up +0.7%. Wall Street was virtually unchanged on the S&P500 on Tuesday.

OIL UP
The oil price is up +US$1.50 from this time yesterday at just on US$71.50/bbl in the US, and just over US$75.50/bbl for the international Brent price.

CARBON PRICE HOLDS
The carbon price held again today at $62.50/NZU. But there was normal to low volumes traded. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD HOLDS
In early Asian trade, gold is up +US$12 from this time yesterday, now at US$2739/oz.

NZD ON HOLD
The Kiwi dollar is unchanged from this time yesterday, now at 60.4 USc. Against the Aussie we are down -10 bps at 90.5 AUc. And against the euro we are up +20 bps at 56 euro cents. This all means the TWI-5 is up marginally to 69.

BITCOIN LITTLE-CHANGED
The bitcoin price is down a minor -0.2% from this time yesterday, now at US$67,327. Volatility of the past 24 hours has been low at just on +/- 0.9%.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

Daily swap rates

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Source: NZFMA

This soil moisture chart is animated here.

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59 Comments

by bdogg | 23rd Oct 24, 4:11pm 1729653079

lol at realestate commission. What a metric.

Anyway, it’s inevitable that Nzers will suckle the tainted colostrum from the debt teet and ask for more like the fat little pigs we are.

Play the man, Not the ball.

by Grattaway | 23rd Oct 24, 4:29pm 1729654173

Interesting metric though - rising income in a falling market - is this suggestive of a monopoly service

by Speedmax | 23rd Oct 24, 6:08pm 1729660093

Not monopoly but certainly a whiff of cartel

by bw | 23rd Oct 24, 4:45pm 1729655146

"The average estate agent fee in (the UK) in 2024 is 1.42% including VAT"

"The average real estate commission in New Zealand for residential properties mostly ranges from 2.95% to 3.95% of a sale price but only up to the first $400-$500k. This then reduces to around 2%-2.5% for the remainder of the sale price.... And because selling a house is considered a service, the vendor will also pay GST on commission."

by mfd | 23rd Oct 24, 5:26pm 1729657619

Sold my house in the UK for a little under 1%, all in. Very efficient.

by Averageman | 23rd Oct 24, 6:30pm 1729661440

Sold several houses myself. Very happy with zero commission.

by mfd | 23rd Oct 24, 6:46pm 1729662392

Even better. In my case, paying 1% was much cheaper than flying back and selling the place myself.

by Advisor | 23rd Oct 24, 6:54pm 1729662870

Good on you. Many adult Kiwis don't have basic finance skills to do handle such transactions by themselves.

by J.C. | 23rd Oct 24, 4:23pm 1729653839

This week Stanley Druckenmiller announced a massive short position in USDT. The public barely blinked. Most people probably think he's an ice hockey player.

Now Paul Tudor Jones has revealed his hand and spooked the media about inflation coming back with a vengeance. Very telling CNBC interview. Completely agree that fixed income is suspect, yet it is promoted by all the "sensible" investment advisors and media.

“I’m long gold, I’m long bitcoin, I think commodities are so ridiculously so under-owned, so I’m long commodities. I think most young people find their inflation hedges via the Nasdaq, that’s also been great. I probably have some basket of gold, Bitcoin, commodities and Nasdaq, something like that. And I own zero fixed income. If I had my cash, it would be very short term.”

https://dailyhodl.com/2024/10/22/were-going-to-be-broke-really-quickly-…;

by Yvil | 23rd Oct 24, 4:27pm 1729654020

Starting on Saturday, March 1, 2025, you will need to be a qualified supporter to comment.

FINALLY!!! Great decision David, well done !

by HughJorgan | 23rd Oct 24, 4:32pm 1729654375

Interesting. That’s a fair way off.

by Yvil | 23rd Oct 24, 5:43pm 1729658624

Yes, I don't know why wait till March next year? My guess is because DC is a big softie.

(edit spelling)

by kiwikidsnz | 23rd Oct 24, 4:58pm 1729655897

A software update was mentioned?

by Nifty1 | 23rd Oct 24, 5:30pm 1729657859

March 2025 is when the propery market would of taken off and everyone will want to have their say & comment 😉

by Pa1nter | 23rd Oct 24, 5:33pm 1729658029

Should be $2 to use the words "spruiker" and "ponzi".

David would have a Lambo in no time.

by Let me be Frank | 23rd Oct 24, 5:38pm 1729658295

Then he'd just need to find somewhere to 'drive' it....and pay for the constant attention required

by J.C. | 23rd Oct 24, 6:27pm 1729661271

Should be $2 to use the words "spruiker" and "ponzi".

David would have a Lambo in no time.

Given that the Ponzi is so important to the Aotearoa economy P, what would be the point of banning use of the word or slapping on infringement fees?

Renowned Aussie economist Steve Keen argues that the current financial system has characteristics similar to a Ponzi scheme, particularly in relation to private debt and asset bubbles. Keen Keen has specifically highlighted the housing market as exhibiting Ponzi-like characteristics and produced content explaining the "Housing Market Ponzi Scheme.'

You can read Keen's work here if you're interested.

Household Debt: The Final Stage in an Artificially Extended Ponzi Bubble

https://ideas.repec.org/a/bla/ausecr/v42y2009i3p347-357.html

by Pa1nter | 23rd Oct 24, 6:25pm 1729661156

Its not a ban, it's a levy for using words incorrectly.

by J.C. | 23rd Oct 24, 6:29pm 1729661370

You'll have to debate Steve Keen about that.

by Independent_Observer | 23rd Oct 24, 6:42pm 1729662170

I’m with Keen on this - I think it has had characteristics of a ponzi. Once they purchased into it they become cheerleaders for it - and the more they have purchased, the more desperate the cheerleading becomes - just like any other ponzi. It didn’t used to be this way 20 years ago.

by J.C. | 23rd Oct 24, 7:05pm 1729663514

Steve Keen has been going on about the Ponzi since pre-GFC. And the spruiker community in Aussie was delighted that prices didn't collapse as per Keen's prediction. To them, that prices continued to rise was confirmation that any idea of there being a housing Ponzi is just a myth.

by Pa1nter | 23rd Oct 24, 7:19pm 1729664368

You could make a case for "pyramid", but a Ponzi scheme involves taking money from investors for an investment vehicle that's illusory.

by J.C. | 23rd Oct 24, 7:35pm 1729665342

Keen argues that traditional neoclassical economics provides a framework that inadvertently supports financial practices akin to Ponzi schemes. He asserts that this theory's "naive, money-less, equilibrium" perspective fails to account for the complexities of real-world banking and credit systems, which can lead to speculative bubbles and financial crises.

In the paper I linked to, Keen discusses how excessive household debt can be seen as a symptom of a broader Ponzi-like structure in the economy. He suggests that rising levels of debt are unsustainable and ultimately lead to economic collapse if not addressed properly.

by Pa1nter | 23rd Oct 24, 7:44pm 1729665857

It's very complex. Much wealth is hereditary, and the nature of capitalism is for consolidation.

So we can view our debt system as a "ponzi", or also a mechanism to obfuscate my first paragraph. Or overcome it, if you're capable of using debt in your favour (not necessarily for housing).

by J.C. | 23rd Oct 24, 8:01pm 1729666869

That wealth can be inherited has nothing to do with what Keen is talking about and his use of the word Ponzi.

by Pa1nter | 23rd Oct 24, 8:09pm 1729667390

Correct, it is missing from his perspective.

by Independent_Observer | 23rd Oct 24, 6:39pm 1729661997

Add ‘DGM’ to the list.

Would be interesting to see if the ‘DGM’ term is used more or less than ‘spruiker’

by TronMVP | 23rd Oct 24, 6:48pm 1729662480

What term would you prefer?

by Independent_Observer | 23rd Oct 24, 6:55pm 1729662940

Neither DGM nor spruiker. Both a lazy terms used to try and belittle or ridicule an opponent in an argument instead of trying to make an intelligent and well thought out position/view.

Ponzi is different as it is not used to attack an individual - but both DGM and spruiker are used in a derogatory manner with the aim of offending the other party.

by JimboJones | 23rd Oct 24, 7:00pm 1729663238

in either case there is no point in arguing your point as they tend to have blinkered vision.

by Pa1nter | 23rd Oct 24, 7:22pm 1729664553

The problem is spruiker is used for anyone who doesn't subscribe to any of the various narratives.

I couldn't care less if anyone buys a house or not. But some of the predictions and views here have some serious flaws.

by DMC45 | 23rd Oct 24, 8:02pm 1729666926

There are definitely various spruiker narratives, just as there are DGM narratives. How could you possibly think otherwise?

by Pa1nter | 23rd Oct 24, 8:11pm 1729667494

There are, although genuine spruikers are fairly low in number here. Put it this way, people talking about them, outnumber the actual spruikers by a healthy margin.

But my point was the label gets ascribed to anyone who's not on board a certain train.

by TronMVP | 23rd Oct 24, 11:49pm 1729680574

Question to IO - what term for DGM would you prefer? (Answer - no term)

Ok so you find it derogatory? Some DGMs call themselves DGM, so it can't be too derogatory. Is it a lazy term? No more lazy than FOREX or FTSE100.

How about the term "those who have a negative view on property investment and cheer when property prices go down" - a little cumbersome, but hopefully won't offensive to anyone.

by Retired-Poppy | 23rd Oct 24, 7:05pm 1729663518

Some "property besotted individuals" make great DGM's. Nearly every insight poor comment spreading/insinuating the need to fear missing out. After pumping the market to stupid heights, how does the next generation receive such messages? Where's the hope, where's the positive encouragement?

by Pa1nter | 23rd Oct 24, 10:21pm 1729675298

There's a way someone can go about buying a house.

Starting younger is often preferable, due to the accumulation of responsibility as one goes through life, and the duration required to pay a mortgage. I know plenty of people in their 40s, 50s and 60s who will never own a house, who thought there was no sense of urgency, and time has caught up on them.

I also know waiting for a market to give you favourable conditions is not a reliable strategy, and it more often gets harder, not easier.

I also know complaining life's not fair doesn't pay that well either. It'll keep you stuck, more than help someone.

by kensinma69 | 24th Oct 24, 3:58am 1729695536

I'm going to sound like a boomer here but what does DGM even stand for?

by Zachary Smith | 23rd Oct 24, 4:42pm 1729654967

Commenters need to understand that certain comments can put the website at risk. It's paramount that readers stick to the terms and conditions of commenting and behave responsibly. It's not the nineties any more. It must be a heavy workload for the owners to have to read every comment carefully.

by False economies | 23rd Oct 24, 5:52pm 1729659159

Let's wait and see which commentators are left first before passing judgement...

by J.C. | 23rd Oct 24, 4:40pm 1729654855

Legendary Kiwi entrepreneur Terrie Lloyd in Japan founded a new company Akiya2 KK last week. The business helps overseas customers find, buy, rebuild, and manage deserted houses in Japan. With prices ranging from JPY3-12 million (approximately USD20,000-82,000), many of these homes are in picturesque locations or close to key amenities. However, growing competition around cities and ski fields means desirable listings move quickly, causing some buyers to rush into ill-advised contracts at inflated prices.

https://www.akiya2.com/blogs/9/when-buying-an-akiya-nothing-beats-a-per…

by agnostium | 23rd Oct 24, 10:26pm 1729675617

The money is in the influencer clicks, not the commission. Most of the so called bargains are anything but. Once you've done them up it would be cheaper to build new.

by kiwikidsnz | 23rd Oct 24, 5:04pm 1729656291

Citizens initiated referenda quirk

"Oddly, when the law was changed to allow electronic signatures for almost everything, the Electoral Act was specifically excluded, and so those signatures will need to be garnered the old-fashioned way, with actual ink."

I suspect that was quite deliberate.

https://www.rnz.co.nz/news/thehouse/531661/the-house-being-hoist-on-a-p…

by WellingtonInvestor | 23rd Oct 24, 5:01pm 1729656074

Seems a lot of people around me are getting ready to put their houses on the market. Seen staging furniture companies bring in and removing furniture on two neighbours. Some are houses that were on the market previously but failed to sell, even after prices were dropped a lot (but not pre covid priced). Seems that everything is primed in the hope there is going to be a big house price boom.

by kiwikidsnz | 23rd Oct 24, 5:21pm 1729657262

Perhaps anticipating an uplift in sales rates rather than a big price boom? There's quite a bit of stock already.

I've monitored a small part of the Christchurch residential market for a while. Through this year prices have noticeably strengthened for eg a std 3brm/2bath single level on its own land. Since the OCR & mge rate reductions, a significantly larger proportion of my watchlist (that had been sitting for months going from auction to tender to PBN to Offers above to Asking Price) has now sold.

by Silvi | 23rd Oct 24, 5:11pm 1729656694

Is John Key going to be the new director of the new regulator AML. That'd be like be putting the fox in charge of the henhouse. Ask the Irish.

by the Joneses | 24th Oct 24, 7:07am 1729706858

Advocating for a Trump presidency should disqualify you from any public service role.

by Poission51 | 23rd Oct 24, 5:19pm 1729657189

Electricity authority finds market options such as Hedges were available to Oji and Winstone Pulp,suggesting strongly that electricity prices were not the driver for mill closures as claimed.

https://www.ea.govt.nz/news/eye-on-electricity/market-options-were-avai…

by Speedmax | 23rd Oct 24, 6:22pm 1729660931

Of course electricity prices were not the real reason. It was a short term spike, now past, but a convenient excuse that deflected mainstream media attention away from real causes of poor management etc. (Not saying electricity sector doesn’t need attention though…major increase in renewable generation capacity is urgently required for competitive and stable pricing)

by J.C. | 23rd Oct 24, 6:00pm 1729659614

Insights into the Melbourne Ponzi from a developer POV. Sounds like it's dead in the water.

Developer Tim Gurner says the Victorian government’s stamp duty cuts are a strong start to get the property market moving again, but warned the effort is doomed to fail unless Melbourne’s reputation as a safe place to invest is restored after years of being pummelled by lockdowns, high taxes and debt.

“The strong consensus in other states is that Victoria is broke, it’s cold, and your property prices don’t go up,” Mr Gurner told The Australian Financial Review.

https://www.afr.com/politics/broke-cold-no-capital-growth-tim-gurner-s-…

by Retired-Poppy | 23rd Oct 24, 7:25pm 1729664702

Starting on Saturday, March 1, 2025, you will need to be a qualified supporter to comment.

Where does that leave ones with multiple accounts? Disincentivized? Bye Bye

by Pa1nter | 23rd Oct 24, 7:33pm 1729665235

Be a sad day for you, you'd have to remove playing a really bad game of "guess who" from your repoirtee.

by Retired-Poppy | 23rd Oct 24, 8:02pm 1729666955

Pa1nter, will you be offering up a contrarian opinion on everything after 01 March?

by Pa1nter | 23rd Oct 24, 8:15pm 1729667749

Not everything, just opinions and prophesies I find spurious.

by Retired-Poppy | 23rd Oct 24, 8:38pm 1729669137

On here, that's a no then....

Posting reckons are too expensive for you.

by Pa1nter | 23rd Oct 24, 9:01pm 1729670481

I actually replied to your same question in the other thread.

Not to do a housemouse, but my reckons have been uncannily accurate so far, and the ones of others I've critiqued have not come to pass. What's popular is not always true, and what's true is not always popular.

Although there's an international resonance building that's putting us into uncharted waters.

by the Joneses | 24th Oct 24, 7:25am 1729707928

You generally predict/argue for the status quo don't you?

What specific predictions have you made that most people didn't see coming?

by Pa1nter | 24th Oct 24, 8:00am 1729710023

I'll argue against highly unlikely changes to the status quo. Or reading way too much into short term movements. That's not an endorsement for the status quo though.

Predictions:

- Labour is out

- The exuberance over high employment and a competitive COVID era labour market would be short lived, the government would flood the country with migrants once the borders were open

- Interest rates aren't staying up high indefinitely

- The housing market won't get as sick as predictions, but the economy and labour market will.

- Investors won't sell up in droves at the onset of high rates.

I couldn't say most people didn't see all that coming, but there's some posters that felt very strongly by repeatedly posting the inverse of the above would happen.

by IT GUY | 23rd Oct 24, 7:39pm 1729665598

Oh Dear

How Sad

Never Mind

by Retired-Poppy | 23rd Oct 24, 8:00pm 1729666813

Yeah pretty much.....