A review of things you need to know before you sign off on Friday; virtually no retail rate change activity, housing metrics weak, consumer sentiment weak, households keep their cash ready, swaps retreat, NZD firms, & more

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 RATE CHANGES
No changes to report so far today. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
The only change today is from General Finance who trimmed some rates. They also ow offer rate premiums for balances over $200,000, over $350,000 and over $500,000. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

HOUSING CONFIDENCE ON A SLOWLY IMPROVING TRACK
The ASB housing confidence survey this quarter stayed positive in all categories, although momentum has slowed in some areas. The results, especially higher buying sentiment for the time being, suggest that conditions for market recovery are in place for the remainder of 2025, though the turnaround is likely to be gradual due to many challenges.

STILL EASING BUT LEVELING OFF
Building consent figures suggest the slowdown in construction activity is likely to last beyond 2026. There was a sharp drop in residential consents in April, but much of that was because there was a sharp jump in apartment consents in March. Over the past year, close to 34,000 new dwellings were consented. Consent issuance has been running at those sorts of levels for a year now. Notably, the earlier downturns in both stand alone homes and town houses have been arrested (those categories account for the bulk of new home construction).

FHBs GET OLDER, BUT GET BETTER VALUE
New first home buyer analysis by Westpac and Cotality (ex-CoreLogic) has found the average age of first home buyers is rising, with Auckland buyers now average 37 years, 36 in Wellington, and 35 in Christchurch, each around two to three years older than in 2019. Also, more than 75% of them in 2025 have been buyers for standalone houses, the highest share since 2020. And the median price paid has held steady at $700,000, unchanged from the past two years and lower than 2022’s $719,000.

NOT IMPROVING
The bump in consumer sentiment seen in April in the ANZ/Roy Morgan survey vanished again in May, in fact falling back to its lowest level since the election. It is still not a good time to buy a major appliance, but at least not quite as bad as earlier. Overall little has changed, and certainly not for the better.

NZX50 ENDS WITH A GAIN
As at 3pm, the overall NZX50 index is up +0.7% so far today. But it is down -1.8% for the past week, down -5.4% since the start of the year, but up +7.0% from this time last year. The Warehouse, Investore, Stride Property, and Mainfreight lead today's gains as Ryman, Air New Zealand, Heartland, and Contact are the main decliners.

MIRAKA ANNOUNCES A PROPER MIDPOINT FORECAST
Following yesterday's announcement from Fonterra relating to their new season $10/kgMS milk payout forecast ($8 - $11), Taupō based dairy company, Miraka, has announced an opening 2025/26 season Farmgate Milk Price forecast of $8.85 - $10.85 per kgMS, with a midpoint of $9.85 per kgMS.

BETTER RESULTS
Dunedin-headquartered vehicle financier MTF has reported a rise in tax-paid profit to $4.9 mln for the six months to March 2025, up from $2.7 mln in the same six months of 2024. This was on revenues that rose +8.2%.

SKINNY SHAREHOLDER SUPPORT MAKES THEM HIGHLY LEVERAGED
One of the things the RBNZ Dashboard allows us to check is for shifts in bank leverage. Most readers will recognise the irony that bank financial balance sheets are so highly leverage that they themselves wouldn't lend to businesses with a financial structure so distorted. Of course, banks themselves claim special status. Anyway, in the March 2025 quarter every retail bank we track reduced its leverage, except one. The major bank with the highest leverage is still Kiwibank with assets 13.2 times more that shareholder support. But at least that is down from 13.3 times at the end of December 2024. But going the other way is the Aussie-owned bank with the highest leverage of those four at 11.9 times, up from 11.6 times at the end of 2024. (ANZ is 10.3 times, BNZ 9.8 times and Westpac is 11.3 times, all improvements.)

SBS BANK ANNUAL PROFIT DROPS
SBS Bank's March-year profit dropped by almost one-third to $29.1 mln. Operating income, expenses and loan impairments all rose. However, the biggest factor in the lower profit was a one-off $13 mln gain from the sale of an Abbott NZ Holdings stake in the previous year wasn't repeated. Gross lending rose $178.5 mln, or +3%, to almost $5.7 bln. Redeemable shares increased $158.6 mln, or 4%, to $4.5 bln. SBS Bank is leveraged 12.7 times.

COMPREHENSIVE FAILURES BRING WARNING
The Department of Internal Affairs (DIA) has issued a formal warning to a money remitter for breaches of the AML/CFT law. Javad Hajiebrahimi, trading as Bumbusly, operates a money remittance service in Christchurch. An on-site inspection in August 2024 found that Bumbusly failed to establish, implement and maintain an AML/CFT program and to undertake a compliant risk assessment, as required by the law. DIA also found that Bumbusly failed to adequately conduct customer due diligence, comply with account monitoring obligations including failing to report transactions to the Police’s Financial Intelligence Unit, and keep adequate records.

HOUSEHOLDS KEEP THEIR READY CASH HANDY
Household bank accounts rose +$2.5 bln in April from March to be +7.1% higher than year ago levels at $262.1 bln. Savings account balances rose +$332 mln in the month and term deposit balances rose almost +$1 bln, making back March's retreat. Ready cash in transaction accounts rose +$1.15 bln, the second largest jump since late 2021 when pandemic fears were to the fore.

BANKS LOVE HOUSING
Housing loans by banks rose to $370.2 bln in April, up +4.8% from a year ago, and that is its fastest expansion since October 2022. Non-bank lenders achieved virtually no growth on that same basis. Rural lending however is shrinking, down -1.5% in April from a year ago to under $62 bln. It hasn't been below $62 bln since the end of 2022. (There will be at least three factors at play influencing rural lending; borrower appetite for loans, bank credit exposure appetites, and the large cash payout flows especially in the dairy industry allowing farmers to retire debt.)

CLIMBING
Non-performing housing loans (impaired, and 90 days past due) hit $2.42 bln at the end of April, a record high. As a proportion of all housing loans outstanding however, they only amount to 0.654% of the $370.2 bln owed. Still, this is the highest proportion since early 2013, so more than a decade high. At the end of 2022, they were only 0.25% or $850 mln non-performing.

SWAP RATES RETREAT
Wholesale swap rates probably reversed the gains of the past two days in a general move lower. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was up +4 bps at 3.31% on Thursday. The Australian 10 year bond yield is down -10 bps at 4.27%. The China 10 year bond rate is down -2 bps at 1.70%. The NZ Government 10 year bond rate is down -12 bps at 4.57% and was down -8 bps to 4.58% in the earlier RBNZ fix today from yesterday. The UST 10yr yield is on 4.42%, down -9 bps.

EQUITIES MIXED AGAIN
The NZX50 is up +0.6% so far today, but the ASX200 is little-changed in afternoon trade. Tokyo is down -1.4% in early Friday trade. Hong Kong has fallen -1.5% at its open while Shanghai is down -0.4%. Singapore has opened down -0.2%. Wall Street ended its Thursday trade with a +0.4% gain on the S&P500.

OIL FALLS
The oil price is down -US$2 at just over US$60.50/bbl in the US, and just over US$63/bbl for the international Brent price.

CARBON PRICE HOLDS
The carbon price is unchanged today at NZ$54.50/NZU with only tiny volume. The next official carbon auction is on Wednesday, June 18, with a $68 floor price. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD FIRMS
In early Asian trade, gold is up +US$25/oz from this time yesterday at US$3296/oz.

NZD FIRMS TOO
The Kiwi dollar is up +20 bps from this time yesterday, now at 59.6 USc. Against the Aussie we are up +30 bps at 92.8 AUc. Against the euro we are down -30 bps at 52.5 euro cents. This all means the TWI-5 is now at just over 66.4 and +20 bps firmer from yesterday.

BITCOIN FALLS
The bitcoin price is now at US$106,031 and down -2.1% from this time yesterday. Volatility has been modest again at +/-1.8%.

This soil moisture chart is animated here.

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