A review of things you need to know before you go home on Tuesday; some minor rate changes, housing sales start 2020 strongly, FHB lending rises sharply, swaps hold, NZD lower, & more

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

MORTGAGE RATE CHANGES
No changes to report today.

TERM DEPOSIT RATE CHANGES
NZCU Auckland has dropped its Success Saver rate from 2.50% to 2.00%. And we have updated rates for General Finance which we had missed earlier.

FLYING START
The housing market is off to a flying start in 2020 with January sales numbers at a four year high. Housing sales volumes were particularly strong in Auckland in January although prices remained around recent levels. We have noticed a strong rise in auction activity especially in Auckland. Many other centres also recorded strong results.

NOT THERE YET
Our population is struggling to arrive at the 5 mln level. Census revisions, how migrants are counted, and a low birthrate are all combining to slow the country's population growth. We are currently at 4.951,500 as at December. That's a revised growth of +1.4% in 2019 which in earlier versions was thought to be +1.7% pa. On this new basis we now expect the 5 mln level for resident population to be reached in early July this year sometime.

KELLEHER CONFIRMED AS ANZ HEAD OF RETAIL & BUSINESS BANKING
ANZ New Zealand has confirmed Ben Kelleher as its managing director of retail and business banking. Kelleher has been acting managing director of retail and business banking for the past six months having succeeded ANZ NZ's new CEO Antonia Watson in the role. Previously Kelleher was ANZ's Auckland and Northland general manager for retail and business banking.

STRICT ENFORCEMENT
The owners of three properties in Twizel will have to sell-up after they failed to seek consent from the Overseas Investment Office (OIO). The buyer got [local] legal advice, but it was wrong. As part of the resulting original settlement they sold two properties totaling 308 hectares and sought retrospective approval for a third 19 ha property. The OIO has now ruled that it must quit the third property too. While they sympathised with the owner because the wrong legal advice wasn't because they didn't try to do the right thing, they have applied the letter of the law.

HOUSING SEES THE RICH GET RICHER ...
In the year ended June 2019, households spent on average $17,227 on housing costs. This is relatively unchanged from 2018 (up +0.6% overall). Changes were seen in property and ground rents (up by +10.5% from $110.80 to $122.50 a week) and mortgage interest payments (down -9.6% from $88.50 to $80.00 a week). So overall, renters were worse off, homeowners better off.

LENDING STANDARDS EASE
Banks have quite recently eased lending standards, as measured by the RBNZ's debt-to-income ratio data series. Of the total $6.3 bln in new mortgage commitments in December, lending to FHBs with a DTI of 3 is unchanged inb a year while those with a DTI of between 5 and 6 rose by almost 50%, and those over 6 more than doubled. In Auckland this FHB lending swing was similar but not quite as pronounced as for the rest of the country.

FHB'S RICH AND RICHER
The RBNZ C41 series shows that first home buyers who get lender approvals are getting wealthier. The level of approvals rose +31% in December 2019 from December 2018 and 31% of those had household incomes of $140,000 and greater. (5% had a household income over $240,000 pa !) That is up from 28% a year ago. 21% had incomes between $115,000 and $140,000, 28% had incomes between $90,000 and $115,000, and 18% between $65,000 and $90,000. Only 6% had incomes lower than $60,000 pa..

A SHARP SUDDEN TURN LOWER
China's sudden pullback in demand for beef is showing up dramatically in saleyard and processor schedule prices here with sudden and heady drops back to the low 2014/2015 levels. Bull prices have dropped sharply too. It is a reminder that farmers are price takers and not price setters, and heavy cost impositions by regulators who assume farmers have endless resources won't be helping either. (And farming was the only sector making productivity progress.)

LOW RATES RAISE HOUSING INEQUALITY
In Australia, new official research finds that "lower interest rates increase housing wealth inequality, while higher rates do the opposite". And they find that investor activity accentuates the inequality effect of low rates.

LOCAL SWAP RATES HOLD
Wholesale swap rates are unchanged today across the curve. The 90-day bank bill rate is down another -1 bp to 1.18% and a new low for the year. Australian swap rates are down by -2 bps across their curve. The Aussie Govt 10yr is down -1 bp to 1.06%. The China Govt 10yr is now up +4 bps at 2.93%. The NZ Govt 10 yr yield is down -3 bps to 1.34%. And the UST 10yr yield is also down -3 bps from this morning at 1.56%.

NZ DOLLAR FALLS
The Kiwi dollar is lower against the greenback at 64.1 USc. Against the Aussie we are little-changed at 95.8 AUc. Against the euro we soft at 59.2 euro cents. That means the TWI-5 is now under 70.

BITCOIN SLIPS
Bitcoin is a little lower since this time yesterday, down -1.5% to US$9,755. The bitcoin price is charted in the currency set below.

This chart is animated here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

Our exchange rate chart is here.