A review of things you need to know before you go home on Wednesday; winter house sales volumes, summer house prices, ASB books 6th record profit, tourism still booming, NZ's reputation high, swaps fall & flatten, NZD up

A review of things you need to know before you go home on Wednesday; winter house sales volumes, summer house prices, ASB books 6th record profit, tourism still booming, NZ's reputation high, swaps fall & flatten, NZD up

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

TODAY'S MORTGAGE RATE CHANGES
No changes today.

TODAY'S DEPOSIT RATE CHANGES
No changes here either.

STRONG DEMAND ON VERY TIGHT SUPPLY
Winter has hit the housing market with sales volumes falling in July, but a lack of listings is keeping prices high. The REINZ stratified median house price is up +16.3% in a year nationally ti $521,000. In Auckland, the stratified median is at $996,550, up +13.6%, while Wellington's equivalent data is at $556,100, up +23%.

TURNING POINT?
Winter is also confirmed in the latest mortgage approval data which fell below 5,000 last week for the first time this year (for a regular, non-holiday work week). However, this marks the lowest point in the mortgage year and if things stay 'normal' we will see a steady rise through the rest of the year from this point.

SIXTH CONSECUTIVE RECORD
ASB released details of its annual profit which hit NZ$913 mln. This is despite a fall in net interest margin and higher provisioning for loans to dairy farmers. Over the past 10 years, ASB has booked $6.2 bln in tax paid profits. Their latest result is +46% above the decade average.

THEY WILL PAY FOR THE RIGHT PRODUCT
Consistent with a booming tourism industry, guest nights rebounded in June according to data out today. They were a remarkable +12% higher in June 2016 that the same month a year ago. This is the absolute low season and things rapidly improve from here, but at 32.9%, the occupancy rate is higher in June 2016 than in for five months of the 2006 year. And all this strength comes with a high Kiwi dollar. Our currency is not holding back this industry. Some commodity manufacturers and farmers should take note.

A REGULATOR WINS
The REAA has prevailed against a Real Estate Agents Disciplinary Tribunal wet-bus-ticket decision against a dishonest real estate agent. The agent is now banned from the industry. The whole saga does not reflect well on the Tribunal.

IMPROVING REPUTATION
Data out today shows that New Zealand has the world's seventh best country reputation. Top was Sweden and Australia was fifth. We are eighth for "happiness", fourth for "peace" and fourth for "least corrupt". Our overall seventh place is unchanged from 2015, and one better than we scored in 2014. As the authors say, reputation improves only after a long slow process, but can fall in a moment.

SWAP RATES FALL & FLATTEN
The list of wholesale rate terms that are under 2% has now grown to three with 1, 2 and 3 year terms now all under. The four year is close at 2.02%. NZ swap rates are here. The 90-day bank bill rate is also down by -2 bps to 2.22%.

NZ DOLLAR FIRMER
Currency markets are not fazed by the expectation of an OCR rate cut tomorrow. The NZD just keeps going with its recent rising trend. It is at 72.1 USc, 93.7 AUc, and 64.7 euro cents. The TWI-5 is back up over 75 at 75.2. Check our real-time charts here.

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We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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14 Comments

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Graham knows that if he does not cut by 0.5 , this time tomorrow the NZD could well be higher.

There's no guarantee that even with a cut of 0.5% that the NZD won't be higher.

but there is pretty much a guarantee that savers will be directly punished by decreased interest rates for deposits and this will be done quickly with another OCR cut. And housing investors will be directly rewarded, and will complain if interest rates don't immediately fall by 0.5%.

Residential mortgage interest rates (according to Key) are already at 60 year lows.

Another OCR cut will likely fuel the housing crisis further.

Hmmmm ... wholesale foreign funding costs for local banks may start to get more difficult than most imagine.

The rise in 12-month LIBOR, as 3-month LIBOR, is out of all proportion. It is more than double what we saw during the whole 2011 crisis that started with a mini-crash in global stocks (late July/early August 2011). It is far more than anyone expects of so-called rate hikes over the next year, perhaps even two. In my view, the most important aspect is where it all began, marked just to the right of center on the chart immediately above. Read more

Country reputation: we sure are on the block under National (whereas exports as a share of GDP haven't increased (= failure))..

Goods exports as a % of GDP might be falling, but are you sure Goods+Services as a % of GDP? Not so sure that is declining (but I will check later).

We should be very proud to be in the top 10 best countries by reputation !

Depends on who claims this as fact really does it not and who was asked?

did you read it? we only made the top ten to visit or live, nowhere to been seen for invest, work, buy, study
meanwhile Australia beats us in every category just like the womens sevens, ahhhhh cant handle coming second to them all the time

nah I didn't ST cause I really doubt any such survey's that only serve as an insidious form of nationalism propaganda.

A "look at how good we got it" to excuse all manner of domestic corruption, destruction and shame

READ IT

Reputation and reality are entirely different things.

Blimey. We are the 8th happiest country. Judging by most people commenting on this website you would think we were living in Iraq.
#lifeisntthatbadinnz
#beproud

Ocr cut or no cut but as far as housing crisis is concerned will only be up and up - thanks to overseas buyer.

http://www.newshub.co.nz/nznews/some-come-here-with-bags-of-cash---chine...

If only government could control overseas buyer than rbnz could have acted and cut ocr more freely instaed government support a study to prove otherwisw.

http://m.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=11691145

Another proof of asian interest in NZ housing market

http://m.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=11690709

Another interesting reading

http://m.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=11691053

Government still in denial and pressurising everyone to act but themself. Question is how long. Can delay it but election year is approaching so will have to come out on road and face the people. Would be interesting how government takes a U turn than. How can they be so arrogant and shamelss - real thick skin.