What happened Wednesday

Economy / news

A review of things you need to know before you sign off on Wednesday; unsold properties choke housing market, current account and IIP stay poor, consumer sentiment firm, job ads stay weak, swaps and NZD stable, & much more

18th Dec 24, 4:00pm 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
No changes to report today. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here either. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

WITHDRAWAL & WAITING NOT AN OPTION FOR SOME
Fewer properties are being taken off the real-estate market when they don't sell as planned. Unsold residential properties are sitting on the market for longer rather than being removed from sale, in a sign of pressures on sellers.

CURRENT ACCOUNT DEFICIT NARROWS FRACTIONALLY
The deficit between what we earn overseas and what we spend has dropped to -6.4% of GDP at the end of September, from -6.6% at June, but remains at levels seen as too high by economists.

OUR INTERNATIONAL INVESTMENT POSITION WORSENS
The difference between our international financial assets and our international liabilities widened to -49.5% of GDP at the end of September from 48.3% as at June. A declining NZD isn't helping. Net external debt is now -51.9% of GDP

IMPROVING SENTIMENT
The Westpac McDermott Miller Consumer Confidence Index rose 7 points in December to 97.5. While still a little below long run averages, that is the most upbeat households have been since 2021.

STILL VERY WEAK
The November BNZ/Seek job ads report shows job ads up +1.1% in November from October. While encouraging, the gain needs to be viewed in the context of the -1.4% decline the month before. Looking through month-to-month volatility, the trend appears to be stabilising at a very weak level, BNZ says. Job ads are down -21.4% on a year earlier. Excluding the pandemic, they are at levels last experienced in 2013, and further back on a per capita basis to 2010.

GREENWASHING CENSURED
The FMA has censured Pathfinder Asset Management (under the Financial Markets Conduct Act 2013. They allege that between October 2021 and May 2024, Pathfinder made misleading statements about the nature of its KiwiSaver Funds’ ethical investments in two advertisements on social media and its website relating to animal testing and fossil fuels. "Misleading statements about a fund’s ethical investment policy have the potential to result in consumers investing in a fund that is inconsistent with their values, and to cause damage to investor confidence in KiwiSaver,” the FMA said.

NZX EQUITY MARKET UPDATE
Here is a summary of how the NZX equity market traded today, as at 3pm. Mercury, Channel Infrastructure, Oceania, and Hallensteins lead the gainers today with Kathmandu, Kiwi Property Group, Freightways, and SkyCity Entertainment the main the decliners

NZ SUPER NO LONGER EVEN BARELY ADEQUATE
New research out of the Retirement Commission finds growing cost-of-living pressures are forcing some over-65s to make extreme cuts to spending to get by.

BIOMETRICS & PRIVACY
The Privacy Commissioner has announced an intention to issue a Biometric Processing Privacy Code, and is seeking submission in a public consultation. The major additional rules in the Code are: adding a requirement to do a proportionality test and put in place privacy safeguards; stronger notification and transparency obligations; limits on some uses of biometric information (e.g. emotion analysis and types of biometric categorisation).

'CHEATING THE SYSTEM'
The Auckland High Court today sentenced company director Munesh Kumar to community detention and community service, and imposed a $500,000 fine on his construction company, MaxBuild Limited, in the country’s first ever criminal prosecution for cartel conduct following an investigation by the Commerce Commission. (MaxBuild's website currently features an endorsement from an Auckland Transport project manager.)

BINANCE DINGED YET AGAIN
In Australia, ASIC is suing crypto company Binance Australia Derivatives for consumer protection failures. More than 500 retail clients of Oztures Trading, trading as Binance Australia Derivatives, were denied important consumer protections after being misclassified as wholesale clients, ASIC alleges in documents filed in the Australian Federal Court.

BIGGER DEFICITS
In Australia, their Mid-Year budget update by the federal government shows a slightly smaller deficit in the 2024-25 financial year than what was presented in May, but larger deficits over the next three years. All up, that is a cumulative deficit increase of A$22 bln.

AWASH IN CASH
In the US, Mastercard stock is up +25% over the past year. And it will get another boost because after-hours the company said it will buyback US$12 bln in stock. They have so much money they are having trouble investing it, so are returning it to shareholders via the buy-back scheme and +15% higher dividends. Their cash horde was US$11.1 bln at their last financial filing, up +29% in 90 days. Locally, the Commerce Commission is trying to regulate the fee-gouging.

EMERGENCY RATE HIKE
In Brazil, their currency, the real, depreciated to a record low of 6.16 to the USD, as mounting fiscal concerns, inflationary pressures, and political uncertainty drove an investor loss of confidence. Investor confidence has been shaken by fiscal measures deemed insufficient to stabilize Brazil’s rising debt trajectory, as President Lula’s tax breaks and modest spending cuts prioritise growth over fiscal discipline. The central bank aggressively tightened monetary policy, raising the interest rate to 12.25% from 11.25%,with two further hikes signaled.

EYES ON MORE CENTRAL BANK ACTION
Over the next day or two, the US Fed, the Bank of Japan, and the central banks of Thailand and Indonesia will all review their policy interest rates. China will review its Loan Prime Rates. Only the US Fed is expected to make any change, a -25 bps cut.

SWAP RATES ON HOLD
Wholesale swap rates are probably little-changed again at the short end today, and likely little-changed at the long end too. Our chart below will record the final positions. The 90 day bank bill rate was down -1 bp yesterday at 4.26%. The Australian 10 year bond yield is also down -2 bps from this time yesterday at 4.33%. The China 10 year bond rate has fallen another -1 bp to just under 1.73% and yet another all-time low. The NZ Government 10 year bond rate is down -2 bps at 4.61% while today's RBNZ fix was 4.55% and up +1 bps. The UST 10yr yield is now just on 4.39% and down -1 bp from this time yesterday. Their 2yr is now just under 4.24%, so that positive curve is still +15 bps, with little-change.

EQUITIES MIXED
The NZX50 has fallen -0.4% in late trade today. And the ASX200 is up +0.3% in afternoon trade. Tokyo has opened its Wednesday trade basically unchanged. Hong Kong is up +0.7% and Shanghai is up +0.9%. Singapore is down -0.4% at its open. The S&P500 fell -0.4% on Wall Street in its Tuesday trade.

OIL SOFTISH AGAIN
The oil price is down -50 USc from this time yesterday, now at US$70/bbl in the US, and now just under US$73.50/bbl for the international Brent price.

CARBON PRICE STALLS
The carbon price has been very quiet today, still at NZ$63/NZU with little activity. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD SLIGHTLY SOFTER
In early Asian trade, gold is down -US$8 from this time yesterday, now at US$2650/oz.

NZD RETREATS
The Kiwi dollar is down -30 bps from this time yesterday, now at 57.5 USc. Against the Aussie we are up +10 bps at 90.8 AUc. And against the euro we are down -20 bps at 54.7 euro cents. This all means the TWI-5 is now just under 67.6 and down nearly -30 bps from this time yesterday.

BITCOIN SLIPS
The bitcoin price has slipped to US$105,369 and down -1.0% from where we were this time yesterday. Volatility of the past 24 hours has been modest at just over +/- 1.5%.

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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75 Comments

by kiwikidsnz | 18th Dec 24, 4:02pm 1734490942

This sounded quite familiar:

"The budget is expected to slip deeper into deficit over the next four years, as better than expected revenues are outweighed by growing spending pressures."

https://www.abc.net.au/news/2024-12-18/federal-politics-live-blog-mid-y…;

by Pa1nter | 18th Dec 24, 4:13pm 1734491620

You have to treat backwards government financial positions like how the General Lee approaches a bridge that's out. Put the deficit spend gas pedal down and jump that bitch.

Or was it hit the brakes and go the long way round, I forget now.

by MacroView | 18th Dec 24, 5:16pm 1734495417

Time to actually start reducing the size of government rather than just talking about it (and making redundant a load of schedulers in the health system while keeping six layers of management in wellington).

by Squishy | 18th Dec 24, 10:33pm 1734514388

I don't know how often governments are going to repeat the lesson that austerity doesn't lead to prosperity. You need actual economic policies.

by JimboJones | 18th Dec 24, 4:12pm 1734491579

I posted this in another thread, but thought it would be interesting to be berated here too...

We bought our Auckland house 18 years ago. It was probably lucky to be lower quartile. At the time we had 20% deposit, 7.5% interest rates and a max of 25 year term, the repayments were $570 a week.

Just did the latest calcs on a lower quartile Auckland house. At current interest rates (I used 5.6%), it would be $842 a week for 30 years after 20% deposit.

Wages are now about double (please give accurate figures if you have them). The minimum wage when we bought was $10.25, it is now $23.50

So doesn't this mean it is now much easier to buy a house than 18 years ago? Add in the fact that we had to save for our deposit, these days you just use your kiwisaver.

by Eschaton | 18th Dec 24, 4:31pm 1734492698

What about all the other costs of living...?

by JimboJones | 18th Dec 24, 4:42pm 1734493325

As I said, wages have gone up a lot. If we spent 40% on our mortgage back then, the other 60% is a lot more these days than it was back then. Pretty sure wage increase have eclipsed CPI increases.

by RookieInvestor | 18th Dec 24, 4:43pm 1734493407

so now the argument is not house prices are too high. cost of living is too high.

by JimboJones | 18th Dec 24, 4:54pm 1734494085

If you ignore that until recently wage increases have eclipsed CPI.

Im happy to be proven wrong (eg I may have punched the wrong values into the mortgage calculator). But I suspect the main argument is that its a conspiracy and stats NZ make it all up etc.

by profile | 18th Dec 24, 7:10pm 1734502257

May I suggest doing a cost comparison using the Big Mac index? How many Big Macs to buy the house today compares to 18 years ago.

by Let me be Frank | 18th Dec 24, 4:43pm 1734493409

Wages 91% higher....according to RBNZ inflation calculator

https://www.rbnz.govt.nz/monetary-policy/about-monetary-policy/inflatio…

Housing (nationwide) up 148%....purchasing power down 59.7%

by Foxglove. | 18th Dec 24, 4:50pm 1734493837

Quite a component of Kiwi Saver funds on hand is your saving though. Not knocking your comment but although I am not a fan of the late Dr Cullen at least he got this system into place and thereby catalysed some greater effort into savings that would give opportunity for a FHB.

by JimboJones | 18th Dec 24, 4:56pm 1734494205

We had to pay for 100% of our deposit. These days your employer pays 50% (does the government still contribute too?).

by Foxglove. | 18th Dec 24, 5:14pm 1734495274

Same experience not only 100% deposit but evidence ability to service a P& I mortgage for a 15 year term(that was where we only just squeaked in because of a fortuitous career change) and we didn’t invest in the then Building Society schemes membership of which could provide a top up too. You miss the point somewhat though. In our extended family quite a few younger ones put more into Kiwi Saver than they need to. Some of it from doing second jobs. Cannot imagine that anyone would think that Kiwi Saver is unfair on previous generations anymore than begrudge the results it affords those that now participate.

by Nzdan | 18th Dec 24, 5:41pm 1734496870

Technically not if your employer does total remuneration, where your Kiwisaver is counted within your total remuneration package.

E.g. $100k salary total remuneration, if someone decides to sign up to Kiwisaver their salary drops to $97k due to the employer Kiwisaver contribution.

Almost half of employers pay KiwiSaver as part of total wages

https://www.rnz.co.nz/news/national/488390/almost-half-of-employers-pay…

by JimboJones | 18th Dec 24, 6:24pm 1734499474

But surely the stats on average / median wage do not take employers KiwiSaver contributions into account.

by Nzdan | 18th Dec 24, 7:20pm 1734502805

Not sure? I mean an hourly wage is an hourly wage before tax and other outgoings.

But my point was in response to whether or not the employer contributes 50% towards someone's Kiwisaver. Not always, as nearly half of all employers effectively take a portion of a total salary away from an employee as the employer contribution. Which is fair on those who have opted out of Kiwisaver of course.

by JimboJones | 18th Dec 24, 7:25pm 1734503157

Agree. But if you compare the median wage back then to the median now, I’m sure it excludes KiwiSaver contributions. So now you not only get a much higher median wage, you also get another 3% in KiwiSaver you can use for your deposit.

by Nzdan | 18th Dec 24, 7:48pm 1734504524

For your deposit that is 250% higher today than it was back then, on a household income that is 215% higher (comparing median house price 2006 to median house price 2024, with 20% deposit and household income of $63,400 vs $136,300).

So a $150k deposit today, of that 35% is added inflation (above wages) that needs to be compensated with 3% Kiwisaver employer contributions. A household income of $200k needs 7.2 years of 3% employer contributions with a CAGR of 6% to compensate for that extra deposit amount, assuming house prices remain static. It's approximately 9 years of employer contributions if house prices & deposits rise 3% p.a.

by Nzdan | 18th Dec 24, 5:00pm 1734494400

So a $340k mortgage with a 20% deposit = $425k house.

Average (not lower quartile) house price in Auckland 2006 (18 years ago) was $446k after a 9.3% increase from 2005.

https://rep.infometrics.co.nz/auckland/income-and-housing/house-values

by JimboJones | 18th Dec 24, 5:13pm 1734495228

First error spotted. Our place was about $390k. So deposit < 20%. Yes $340k mortgage.

by Nzdan | 18th Dec 24, 5:24pm 1734495861

$390k is still about Median house price for the time (February 2006 was $385k), so you should be comparing to today's median house price for Auckland of $1m.

If you had an $850k mortgage @ 7.5% for 25 years, you'd be paying $1364 per week. Or 2.4x of $570 per week.

https://www.interest.co.nz/charts/real-estate/median-price-reinz

by JimboJones | 18th Dec 24, 6:16pm 1734499011

Who’s paying 7.5% today?

by M0ralHazard | 18th Dec 24, 6:27pm 1734499670

People who fixed earlier this year

by JimboJones | 18th Dec 24, 6:40pm 1734500426

I’m taking about someone buying a house today. But if you want to go back in time, people who buy a house today at the 5 year fixed rate from 5 years ago, they are doing really well!

by Nzdan | 18th Dec 24, 7:36pm 1734503798

Sorry I should've carried over the 5.6% interest rate in your example, where you achieved $842 per week for 30 years. I think we should however be using the same loan term length of 25 years to keep things consistent, but understand you're trying to demonstrate how much harder it was for you to buy a house in 2006 so I'll run both numbers:

$850k @ 5.6% over 25 years = $1216 per week.
$850k @ 5.6% over 30 years = $1126 per week.
- Median household income 2024 Auckland $136,300
$340k @ 7.5% over 25 years = $580 per week
- Median household income 2006 Auckland (Census data) $63,400.

Weekly repayments up 194% (209% on 25 year term). Household income up 215%. Loan/Deposit size up 250%.

It depends if the reason our home ownership rates were so shot, is because of loan servicing issues, or the deposit requirements. I'd say it's the latter.

by JimboJones | 18th Dec 24, 7:53pm 1734504787

Yes but as I said, KiwiSaver helps a hell of a lot with that deposit.

Can you at least acknowledge that buying a house today is in the ballpark of 18 years ago?

by Nzdan | 18th Dec 24, 8:00pm 1734505257

In another comment above, I have demonstrated buying a house is not in the ballpark of 18 years ago.

Servicing a mortgage is in the ballpark, but that's not buying a house. I doubt many (if any) aspiring FHB is sitting in their rentals wishing the banks would drop interest rates so they could buy, they're wishing house prices would fall so their deposit requirements become favorable.

Even with added employer contributions, it'll take 7 - 10 years for a $200k household income to compensate for the extra 35% of house deposit they need to save (deposit requirements are up 250%, household incomes up 215%).

by Murray Falconer | 18th Dec 24, 9:41pm 1734511318

Well done Dan, I'm not sure I could put in as much effort as you did for a comment that started with different loan terms while seeking to compare affordability!

by lockdowndays | 18th Dec 24, 11:07pm 1734516466

It’s the opposite, we are sincerely hoping interest rates don’t fall, so house prices don’t boom again and leave us in the dust. Ironically high interest rates are good news for FHB

by M0ralHazard | 18th Dec 24, 5:11pm 1734495111

What was the lower quartile house price in Auckland 18yrs ago and what is it now?

by JimboJones | 18th Dec 24, 5:15pm 1734495325

That only matters if you are paying cash. If you have a mortgage, the main thing is the repayments, and that is largely dependent on interest rates.

by M0ralHazard | 18th Dec 24, 5:27pm 1734496071

Assuming the weekly payment is the same, I would take a low house price with high interest rates over a high house price with lower interest rates any day of the week.

And based on your mortgage payments, it looks like your house price was well above "lower quartile"

by Nzdan | 18th Dec 24, 5:29pm 1734496169

1000%. A $250k mortgage @ 10% p.a. = $524 per week. A $500k mortgage at 2.5% = $518 per week.

You increase your repayments by 10% to $550 per week:

The $500k mortgage goes from 25 to 23 year
The $250k mortgage goes from 25 to 21 year.

A period of high interest rates also implies high rates of inflation, including wages, so increasing your repayments by 10% p.a. is more likely to be doable for the $250k mortgage scenario.

by JimboJones | 18th Dec 24, 6:22pm 1734499345

Agree, I would too. I’d prefer to go back 40 years, or 80 years, or 5000 years.

But in terms of “can I afford to buy an average house”, is it really any harder now?

by Mypointis | 18th Dec 24, 11:01pm 1734516107

No. People just like to moan about something. It's hasn't been easy to buy a house for the average person for 40 years.

by M0ralHazard | 19th Dec 24, 7:47am 1734547664

It has never been "easy", but that completely ignores how much harder it has become. You have your head in the sand if you can't see that

by HouseMouse | 18th Dec 24, 5:59pm 1734497973

You got much more for your money back then though. My understanding is you have a detached house on a full section. Today that would be a two bed townhouse with no land. So it’s not a great comparison

by JimboJones | 18th Dec 24, 6:26pm 1734499605

I was waiting for that one! If you rewind to the 1950’s, you could probably buy our entire suburb for a similar price, it was farmland. Go back another 100 years and you’d get close to buying the entire country. Those were the days.

by JimboJones | 18th Dec 24, 6:51pm 1734501093

Also, our original house was 2 bed, no insulation, single glazed, very basic bathroom with leaking shower overhead, very basic kitchen with terrible appliances, rubber wiring that needed replacing, old pipes that needed replacing, wooden windows almost rotten, needed a full repaint inside and out, etc.

by M0ralHazard | 19th Dec 24, 7:48am 1734547686

I bet the lower quartile house in Auckland is still that

by JimboJones | 18th Dec 24, 7:22pm 1734502963

At one stage the lower quartile house was in Ponsonby. It’s a very hard comparison to make.

by 26@Main | 18th Dec 24, 8:49pm 1734508188

The other day you commented you still had a fairly big mortgage, yet you bought 18 years ago. You must have spent a lot of money on renovations?

by lockdowndays | 18th Dec 24, 11:02pm 1734516134

It WAS easier - mainly because you didn’t have to have 20% already saved, a number of my friends breezed in with just 5%, some just back from their OE with a spare few thousand. Young people can only dream of that situation now. Also, you know Kiwisaver IS savings right? It still takes many years of work to build up enough?

by Te Kooti | 18th Dec 24, 4:15pm 1734491710

I'm slightly loathe to post an article from this rag but its somewhat salient

https://www.dailymail.co.uk/femail/article-14200285/Kiwi-dad-three-burs…

by JimboJones | 18th Dec 24, 4:23pm 1734492238

I would be loathe too. Come on, $1000 a week in groceries?

It is easy to find single items that are cheaper and use it in an article. For example the biggest staple of all, bread. Cheapest I could find at Woolworths AU is $2.50 AU a loaf, here at Pak and Save it is $1.15 a loaf. So NZ is actually 54% cheaper than AU.

AU supermarkets will be about 15% cheaper on average for basic foods as they are GST free. Do we want that policy here too (honest question)? I don't like the idea, but maybe it would stop all this whinging?

by Te Kooti | 18th Dec 24, 4:45pm 1734493531

The article doesn't say he spends $1k p/w on groceries though does it.

by JimboJones | 18th Dec 24, 4:59pm 1734494360

Correct, it says he assumes it would be 1k in NZ.

His family's grocery bill came to a total of $380, a far cry from his native country, where he believes the same items would have cost them $1,000.

by Advisor | 18th Dec 24, 4:47pm 1734493620

Lack of competition in the supermarket sector means if we were to remove GST from basic food items tomorrow, we'd be lucky even if half of that gets passed on to the customer at the checkout.

The previous government spent millions on supermarket studies and regulations to no significant benefit. Pump prices in my neighbourhood for example dropped like a rock the in the same week a Waitomo set up shop 2 years ago and are currently among the cheapest in the country.

by JimboJones | 18th Dec 24, 5:02pm 1734494577

I have done a small sample of basic goods and found our supermarkets to be cheaper than AU and UK before tax. my sample was hardly statistically relevant, but I doubt the duopoly are contributing more than 1 or 2% to the price. Even the commerce commission couldn’t find massive savings overseas, they were talking 1 or 2 percent, a few bucks a week.

by tony.g | 19th Dec 24, 8:01am 1734548482

Interesting that many supermarkets & fuel station creaming it are franchise operations... ie, just kiwi mums & dads just trying to get ahead...

by AN Other | 18th Dec 24, 5:55pm 1734497703

A former workmate worked in a clerical position in Aus and she said dealing with GST was a nightmare. Raw chook = no GST. Cooked chook is GST applicable. I didn't ask if a piece of fruit sliced and wrapped in plastic had GST applied or not.

My point being, savings will probably be absorbed by "increased admin costs".

by J.C. | 18th Dec 24, 4:25pm 1734492337

In Australia, ASIC is suing crypto company Binance Australia Derivatives for consumer protection failures.

Tiresome. If ASIC were a proper regulatory body, this wouldn't happen in the first place. If they don't know what to do, all they have to do is look at the Japan Financial Services Agency for a playbook on regulation: transparent, tight, just. Because the FSA has taken accountability for regn, Binance has struggled to be cleared to operate within their borders. And even after being approved, Binance got cold feet as obligations were too onerous.

ASIC has been labeled a "toothless tiger," reflecting widespread perceptions that it fails to adequately enforce corporate laws. Reports indicate that ASIC takes action in less than 1% of misconduct reports received from insolvency practitioners, and its prosecution referrals have decreased significantly over recent years—from 86 in 2018-19 to only 41 in 2022-23. Game of mates stuff among their leadership. Well paid. But achieve bugger all.

by Eschaton | 18th Dec 24, 4:33pm 1734492801

Account deficit... buy local.

by Te Kooti | 18th Dec 24, 4:48pm 1734493710

Read up about comparative advantage.

by Advisor | 18th Dec 24, 5:39pm 1734496740

Chinese governments at various levels collectively spend hundreds of billions (USD terms) if not trillions in direct and direct subsidies to maintain comparative advantage in those areas.

We spend squat in comparison to build a better economy, waiting for foreign capital to come build infrastructure, invest in businesses and higher foreign workers to make NZ great again!

by streetwise | 18th Dec 24, 6:44pm 1734500642

1. If the current housing downturn is anything like the "oil shock" downturn of the mid to late 1970s (which nearly bankrupted NZ, hence selling off the BNZ and ASB) then houses will depreciate a further 30% to 40% and take more than a decade to even begin to recover. How do I know this...I was there and 'lost my shirt'.

For god's sake stop comparing this downturn to the "flea bite" inflicted by the Global Financial Crisis. I had a small retail business during the so-called GFC and I wasn't aware there even was a crisis until the media told me about it well after the so-called crisis was over. Naive young economists!

2. Indian entrepreneurial-type immigrants need very careful and persistent follow-up oversight by the Immigration Ministry and/or Inland Revenue. Naive immigration officials!

by Eschaton | 18th Dec 24, 4:34pm 1734492877

All such immigrants require that.

by Firstclass | 18th Dec 24, 4:41pm 1734493277

"Niave" ? Did you mean "naive" ?

by streetwise | 18th Dec 24, 6:44pm 1734500698

Corrected. Thanks

by J.C. | 18th Dec 24, 4:41pm 1734493294

Aussie Ponzi and tax optimization.

Treasury is forecasting a spike in people claiming investment tax breaks this financial year as experts said higher interest rates and more onerous costs on landlords imposed by some state governments were pushing investors to offload properties.

The department’s latest tax expenditure statement estimates forgone taxes from the capital gains tax discount will hit $22.7 billion in 2024-25, up from $9.2 billion four years earlier. The figure for this year is more than double the Treasury forecast published in February last year.

KPMG chief economist Brendan Rynne said the CGT claims spike reflected increases in asset values and the volumes of properties being sold. He said sales were being driven by a range of factors including growth in interest costs far outpacing growth in rental income, as well as increased state-levied taxes.

The cost of holding investments “has become disproportionately higher than during the pandemic,” he said.

https://www.afr.com/politics/federal/capital-gains-benefit-spikes-to-22…

by K.W. | 18th Dec 24, 4:59pm 1734494387

Australian State Govts like Victoria are driving landlords out of the market with big increases to land tax, so they are all selling up. Despite there already being a bad rental crisis in Australia. Better to have the homeless living on the street than to impose reasonable taxes, right? Its like they learned nothing from NZ Labour's experiment in taxing landlords which caused a 500% increase in the number of people on the public housing waitlist, a 1000% increase in the amount of taxpayer money spent on emergency housing, and a 50% increase in the median rent in just six years.

by J.C. | 18th Dec 24, 5:10pm 1734495014

Australian State Govts like Victoria are driving landlords out of the market with big increases to land tax, so they are all selling up

Vic Govt is a shambles. Woefully indebted. Net debt is north of $15 billion - approx 20%+ of the state's Gross State Product (GSP). In terms of per capita debt, this translates to about $19,500+ for every Victorian, notably higher than that of other major Australian states. Some estimates suggest that this per capita debt could be as high as $28,000 when considering broader fiscal responsibilities.

by Te Kooti | 18th Dec 24, 5:29pm 1734496178

Vic Treasurer just quit, the State is virtually uninvestible, Corrupt unions (CFMEU) driving up costs to the point stop/go ladies are earning $200k. They are building a new metro tunnel where they have something like 300 managers on >$300k. There is no limit to the excess and cronyism. If it wasn't for resources, the country would have been re-rated lower long ago.

by J.C. | 18th Dec 24, 5:50pm 1734497456

Yes indeed. If you do any digging on the state involvement with Crown Casino, it doesn't really get any more grubby. It's hard to imagine the filthy lucre from Chyna drying up but it seems to have slowed dramatically. The Vic Govt was collecting revenue through 'alleged' money laundering.

Research shows that 75% of Victorians see their govt as corrupt or vulnerable to corruption (https://psnews.com.au/perception-is-theres-public-sector-corruption-in-…). And 41% of suppliers to the Victorian government reported opting out of bidding on contracts due to concerns over corruption.

by The Man3 | 18th Dec 24, 5:43pm 1734496985

Correct. If they ever brought in more taxes for Landlords you would see so many people without a roof over their heads.

It would not be viable for Landlords to continue to provide subsidised accommodation for anyone, why would they?

Even in ChCh it is not currently financially viable to buy a property and make the numbers work without potential capital gain.

If this was removed or more taxes then the rental pool will reduce and the rents will increase.

You can not change anything without consequences

by Sluggy | 19th Dec 24, 7:23am 1734546233

Even in ChCh it is not currently financially viable to buy a property and make the numbers work without potential capital gain.

Because the asset price is too high.

Also if a landlord sells a rental, it doesnt disappear, someone buys it and lives in it. This has been explained many times.

And finally bless you for subsidising renters and generally doing the lords work

by ThoughtsAndTorts | 18th Dec 24, 6:09pm 1734498556

Good time to buy for many people though. Stuff is moving and at reasonable prices.

If landlords are selling successfully, must mean owner-occupiers are buying.

by Frank. | 18th Dec 24, 9:22pm 1734510147

The landlords are selling at a loss. Not a problem though as they’re throwing what’s left into bitcoin. That’s where the real action is.

by ThoughtsAndTorts | 18th Dec 24, 10:59pm 1734515978

That is very sad to hear, I will light a candle tonight mourning the landlords losses.

by lockdowndays | 18th Dec 24, 11:14pm 1734516880

Fantastic- I’m very happy to hear they’re heading to bitcoin and away from housing. I don’t have to live in a Bitcoin so frankly don’t care what silly value it reaches

by J.C. | 18th Dec 24, 5:05pm 1734494741

This might even be a bit too nerdy for the crypto cheerleaders but it's very important for those attacked by the anti-crypto crusade. It appears tomorrow’s Senate Banking Committee scheduled markup vote for SEC Commissioner Caroline Crenshaw has been canceled. She will not be renominated to her position. Crenshaw was one of the more ardent anti-crypto generals at the SEC. IMO, a nasty piece of work working for vested interests.

Crenshaw will still on the commission and has the ability to serve until her replacement is confirmed, or until Congress adjourns next year. Per Congressional process, the minority party (in this case it will be the Democrats) usually recommends nominees to fill the minority seats on the commission. Trumpty Dumpty can use his discretion to take their advice but he’s not obligated to. So Democrats, maybe at the behest of Elizabeth Warren, could float Crenshaw’s nomination again, but it would be up to Trump to decide whether to re-nominate her himself.

by J.C. | 18th Dec 24, 5:20pm 1734495607

S&P 500 Value Stocks as represented by the iShares S&P 500 Value ETF have now declined for 12 consecutive days.

This is the longest losing streak in its history. Wonder what's up.

https://www.tradingview.com/symbols/AMEX-IVE/

by Wrong John | 18th Dec 24, 5:57pm 1734497855

Everyone's having trouble digesting the 30% plus on almost everything over the last 4-5 years - even the Yanks & their so-called brilliant economy. Higher [than recently] interest rates is a part of it, but most of the big boys are pulling out their pennies from China & banking them in the USA. Americas huge cash pile is a double-edged sword, but essentially the rich are getting richer while the poor get poorer. Even in America. It is a similar tale in most places, sadly, but with the west finally starting to get over its love affair with the left, this doesn't augur well for the poor people tomorrow. After half a century of social-democratic policies which have basically given money away by the billion, it hasn't help the poor get less poor. They get stuck in their welfare existence, now entering a fourth(5th?) generation, whilst supplying most of the new borns to our society over that period as well. We can see it here as well. I'm happy to be proved wrong but I'm pretty sure this doesn't end well.

by Poission51 | 18th Dec 24, 6:28pm 1734499703

Mercury Energy reached FID and executes contracts for 77MW Dargaville wind farm,with construction to start early Jan.The 6.4MW turbines will be the largest in NZ and expected to generate around 18% of Northland demand.Lodestone energy also started commissioning today its third solar farm this brings Utility scale solar generation in commissioning to 91MW and around 140MW on the trading platform for early 25.