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A review of things you need to know before you go home on Wednesday; many retail rate changes, building consents rise again, KiwiSaver funds drop member fees, swaps firm, NZD recovers, & more

Business / news
A review of things you need to know before you go home on Wednesday; many retail rate changes, building consents rise again, KiwiSaver funds drop member fees, swaps firm, NZD recovers, & more

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
HSBC has raised fixed mortgage rates across the board by +20 bps to +35 bps. TSB has raised its floating rate (+25 bps) as has Heartland Bank (+50 bps). WBS also raised its fixed rates.

TERM DEPOSIT RATE CHANGES
HSBC has raised term deposit rates by between +5 bps and +50 bps

SAVINGS ACCOUNT RATE CHANGES
Surprisingly, there has been a rush of rate increases for at-call savings accounts. There have been many, but they come after record low rates and aren't significant yet, certainly nowhere near the current inflation rate. More here.

ME TOO
Following BNZ who removed theirs some time ago, Simplicity has also said it will end charging a "members fee". But it will continue to charge 0.31% for all Growth, Balanced and Conservative KiwiSaver funds, and 0.10% on all NZ Share and Bond funds. They now have over $4 bln in funds under management and the new arrangement will mean admin revenues of over $10 mln to manage this portfolio. (BNZ's reduced admin fees are higher than Simplicity's.)

FIREFIGHTERS CREDIT UNION SEEKS TAKEOVER
The New Zealand Firefighters Credit Union (NZFCU) is considering a number of initial takeover approaches, General Manager Jon Graham says, as it "actively seeks" a Transfer of Engagements partner. A Transfer of Engagements under the Friendly Societies and Credit Unions Act would see NZFCU transfer its members and business to another credit union. Graham says NZFCU is conferring with its supervisor Covenant Trustee Services and the Reserve Bank on its best options. The Transfer of Engagements process will involve high level heads of agreement, a due diligence process involving all parties, then a set of recommendations to NZFCU members for their review and vote, Graham says. For the June year NZFCU posted a deficit of $392,044, with total assets at $14.7 million at June 30.

RABOBANK HAMILTON HQ OPEN
Rural lender Rabobank NZ opened its new Hamilton HQ on Wednesday after deciding in 2019 to relocate its head office from Wellington. About 80 staff are working in the new HQ.

BLACK FRIDAY/CYBER MONDAY A LOCAL WINNER
Worldline (Paymark) is reporting that spending through their network via the core retail merchants that tend to participate in Black Friday sales – including electronics and appliances, clothing, footwear, home and recreational wares, but excluding food, liquor and hospitality merchants – totaled $248.2 mln in the four days from Black Friday to Monday, 29 November. This spending was up +7% on the same four days last year ($232 mln) and, significantly, was +11% above the pre-COVID levels of 2019. ($223 mln).

TOPPING OUT
New dwelling consents dipped for the second month in a row in October. Still, almost +48,000 new homes were consented in the year to October, nearly +20,000 of them in Auckland. At least one analysts expects the annual level to peak at +50,000 early in 2022. Capacity constraints from both available labour and imported materials will make translating building intentions into actual activity more difficult, and they are likely to extend the time to complete construction, as well as push up the price of new builds.

TAXPAYERS KEEPING THE CONSTRUCTION SECTOR BUSY
Infometrics summarised the strong rise in non-residential consents as follows: There was $814 mln worth of non-residential consents in October, the largest monthly value since April 2019. Year-end non-residential consent values are now up +17% pa. The largest consent totals in October were for hospitals ($262 mln), education buildings ($157 mln), and warehouses ($102 mln). Public sector consents were up 31% pa over the three months to October, while private sector consents were up just 6.5%.

SLIP SLIDING AWAY
Although the official stats suggested Chinese factories started expanding again in November, the unofficial review (which recently has been more optimistic than the official view) reports that moved from a very modest expansion in October, to a contraction in November. This survey has seen little to cheer about all year.

MEANWHILE IN AUSTRALIA
Their latest factory PMI is positively positive, expanding at a faster rate in November than the good rate reported in October. Input prices rose at a record rate amid supply shortages.

NOT AS BAD AS FEARED
Australia also reported stronger than expected Q3 GDP economic growth of +3.9% for the year to September. But this was achieved because the July to September shrinkage came in less than feared. Delta's hit to the Aussie economy wasn't as hard as initially thought.

OUT OF PUFF?
Australia's house price rises may be coming to an end. Overall values were up a mere +1.3% in November, with median Sydney prices rising less than +AU$10,000 (+0.9%) and median Melbourne prices rising less than +AU$5000 (+0.6%) for the month, unusually small increases for them.

LOCAL PANDEMIC UPDATE
In Australia, pandemic cases in Victoria have risen to 1179 cases reported today. There are now 11,959 active cases in the state - and there were another 6 deaths yesterday. In NSW there were another 251 new community cases reported today, with 2633 active locally acquired cases, and they had no deaths yesterday. Queensland is reporting no new cases. The ACT has 4 new cases. Overall in Australia, just under 87% of eligible Aussies are fully vaccinated, plus a bit under 6% have now had one shot so far. In contrast, there were two cases in New Zealand at the border, and 146 new community cases today. Now 92.6% of Kiwis nationally aged 12+ have had at least one vaccination, and the Australian rate is now at 92.4% of all aged 16+ (91.5% ages 12+).

GOLD SOFTISH
In early Asian trading, gold is at US$1788 and down -US$6 from this time yesterday. But at least it is higher than the US$1785/oz it closed at in New York, and the London fix of US$1786.

EQUITIES RECOVER EXCEPT IN NEW YORK
Wall Street closed down sharply with the S&P500 ending down -1.9% in their Tuesday trade. But Tokyo has opened +0.8% higher today and Hong Kong has opened up +1.4%. Shanghai has opened flat. The ASX200 is down -0.4% in early afternoon trade. The NZX50 is flat nearing its close.

SWAP & BONDS RATES
We don't have today's closing swap rates yet. They may have risen. The 90 day bank bill rate has jumped back up +5 bps at 0.86%. The Australian Govt ten year benchmark rate is now at 1.75% and down -2 bps. The China Govt 10yr is at 2.89% and little-changed. The New Zealand Govt 10 year rate is now at 2.44% and also unchanged but still below the earlier RBNZ fix for that 10yr rate at 2.45% (-3 bps). The US Govt ten year is down -3 bps from this time yesterday to 1.49% after a sharper dip earlier.

NZ DOLLAR A LITTLE FIRMER
The Kiwi dollar is now at 68.4 USc and little-changed since this time yesterday. Against the Aussie we are slightly firmer at 95.7 AUc. Against the euro we are unchanged at 60.4 euro cents. The TWI-5 is now back up to just over 73.


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BITCOIN SOFT
The bitcoin price has been soft over the past 24 hours, now at US$57,066 and down -1.17% from this time yesterday. Volatility in the past 24 hours has been moderate at just on +/- 2.9%.

This soil moisture chart is animated here.

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34 Comments

I think NZ lock down will continue indefinitely for the foreseeable future if every new variant of the virus renders the previous vaccines relatively ineffective.

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Too early to know if they are relatively ineffective

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No CBWB.  From the day after tomorrow it's a different scenario approach.  Covid in your town.  Yes it will be right there.  But no lock down.

It's different. Adapt. 

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You could be right, but I think instead we will learn that Omicron is a highly contagious, mild variant - ideal for out-competing other variants and spreading immunity.  I would not be surprised if, by early next year, many scientists (not those who profit from vaccines) will be saying the pandemic is in the early stages of burning out, and Omicron is becoming endemic and just another a minor disease.

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Australia's GDP fell 1.9 per cent in the September quarter, but economists had expected a 2.7 per cent slide.

So all good, right?

Actually, Australia had worst-performing economy of the 28 advanced countries which have reported Q3 data. Not talked about by the MSM.

https://www.abc.net.au/news/2021-12-01/gdp-economic-growth-september-qu…

https://twitter.com/JEChalmers/status/1465844014997913604?fbclid=IwAR0l…

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Rapidly increasing interest rates will also have a big impact on demand for new builds, David.

The FHB market for new builds will take a dive, probably won't be till mid to late 2022 that we will really see the consents data fall away, though. 

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Part so but even more so, eg,  acquaintances in ChCh finally getting to rebuild ex EQs, all demolished & cleared, building commenced now blown out by over 30%, chronically delayed supply of materials & ramped up prices of same. Project now not viable apropos insurance payout, but  as a full & final settlement, nothing to do with the insurer.  Ongoing buiding costs are overwhelming budgets that have been realistically set & worse still, builders are taking short cuts to make end meet.

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"But, Mr Luxon. How do you rationalise the 7 properties you own with those who are struggling to buy their first home?" (or words to that effect)

"Look. I'm not going to apologize for being successful".

And there we have it. From the new Leader's mouth - success in New Zealand is defined by the number of Investment Properties you own....

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Cindy's answer to the multi home ownership question - oh that's right the team of $55 million have never asked her. Can't have been on her question list.

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All of our politicians think along the same lines when it comes to Property Investment in New Zealand - even predating Clark's proud notation: "I have 7 investment properties that are my retirement fund". That's why we are in the mess we are.

But for Luxon to make a comment with such arrogance during a TV interview shows he has quite a bit to learn.( Must be something about the number 7 that they think is acceptable in the electorates' eyes.)

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Stirling Moss always raced under # 7. Must have believed it was a winner! There it is.

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And what would he think of a country that couldn’t build a house?

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Hard to say. Never crossed his mind, you would imagine. In 1956 he tried very hard to teach a callow useless youth, me, to water ski to no avail. All I can say as a fair guess,  as he was then, the last thing he had on his mind, was housing, but he did like to laugh.

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Don't count on any major political party in NZ to ever take housing seriously enough.

The only thing that will deal to house prices is a bursting of the bubble.

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Or a CGT - but the voter bulked at that - she changed her mind about vaccine mandates - could just as easily change it about CGT

 

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That's stuff around the margins, Aus has a CGT, hasn't stopped their housing craziness

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Unfortunately a "bursting of the" housing bubble will also be a bursting of the economy. Loss of jobs and income and no way to borrow money to buy cheaper houses. It is a no-win situation, you will be better off to buy a house now HouseMouse

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From the same interview/article...

"Well obviously we want affordable houses so we want to get it much closer to 1 to 3 than 1 to 8," said Willis.

"A 1 to 3 ratio would mean about a 50 percent drop in house prices"

"This is over time," Willis responded.

So wages way up or house prices way down. Neither is going to happen under National (or Labour for that matter). In conclusion.. she is a liar and will say whatever crap to get people to vote for them. Same old, same old. Not getting my vote.

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I have said it before - I don't rate her at all

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Stop being a hypocrite bw how many homes does H Clarke own, john key, Donald Trump or yourself? Would it be ok if he has just one in nz but 6 in oz? If he owns less homes is he suddenly more relevant, then maybe he should sell the homes, give the money to the poor and only wear old clothes to gain your respect.

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Wow, just had a Facebook ad pop up from ACT telling me I should vote for them so people can’t build 3 story houses! I thought they were the free market party, but alas they are just the free market when it suits party. 

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I don't agree with the policy at all, but you are right it's extremely hypocritical from Act.

We can't even rely on the minor parties keeping true to their philosophies...

I say bring back the Mc Serious Party...

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I don't know what Act is going to do when a mass transport subway pops up in the borough?

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Nats and Govt are aligned on it, so I suppose ACT are scratching around to hoover up the easy Nimby votes:

https://www.stuff.co.nz/national/politics/300433304/labour-national-ann…

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In the 1960/70s there were, on the then market,  vacuum cleaners that hovered & hoovered. Didn’t last long though.

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I'm pretty much at the stage where I feel Chlöe Swarbrick is the only one who isn't a cope out. Whatever you think of her policies, she is straight up. I used to think that of David Seymour, now he is just another cuck.

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I’m not there but perhaps some of those in her electorate, decimated by the lockdown(s) could comment on the strength and application of her efforts on their behalf? Not having go. Just interested as she has been an effective voice on other matters, such as the nebulous nature of RBNZ forecasts etc.

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I can’t comment on the CBD businesses but she was a massive advocate for us when our sons CBD oil was being seized at the border due to the implementation of this governments failed medicinal cannabis laws. I have a huge amount of respect for her.

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I'm pretty much at the stage where I feel Chlöe Swarbrick is the only one who isn't a cope out.

Yes. She's the only one who seems real and sincere. Smart as a whip too. Not her thing but seems to understand the monetary system better than Robbo. 

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Yeah I think she is great.

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If sooty and sweep started a political party I think most kiwis would rather vote for them than any of the choices we have now.(Sue would make a great minister of health) let’s get busy

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What about the fat German dude - looks like he is here for the long haul... "Are you sweating Mr Prime Minister?"

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Lol!!

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I’m hearing a lot of new reports of people getting sick from the vaccine. 

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