A review of things you need to know before you go home Wednesday; Co-op Bank trims a mortgage rate, fewer farms being sold, Auckland world-ranked liveable, more construction workers needed, swaps firm, NZD weaker

A review of things you need to know before you go home Wednesday; Co-op Bank trims a mortgage rate, fewer farms being sold, Auckland world-ranked liveable, more construction workers needed, swaps firm, NZD weaker

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

MORTGAGE RATE CHANGES
The Co-operative Bank has reduced its three year rate to 5.09%, now matching most others at this level.

DEPOSIT RATE CHANGES
No changes here today.

BRAVE FACE
Fewer farms being sold but prices are up according to REINZ data out today. Only 95 sales were recorded in July, the lowest single month since December 2013. There were only 7 dairy farms sold in the month, nationally. Overall farm prices are up +9% compared to 12 months ago but dairy farm prices are flat. The REINZ is claiming an "air of relief in rural property market", but with such low sales levels some agents and sellers must be nervous. We haven't had this low a level of sales in July since 2012.

LESS LIFE IN THE LIFESTYLE MARKET
We are also seeing some growing weakness in the lifestyle block market. Only 527 properties changed hands in July, down from 773 in the same month a year ago, and the lowest July since 2014. Things were particularly tough in Auckland where only 89 lifestyle blocks were sold in the month, a long way below the 210 sold in March 2016, and the lowest July since 2011.

NOT SO HAPPY
More than half of retailers failed to meet their sales targets in the quarter to 30 June, according to the latest Retail NZ Retail Radar Report.

RAISES COMING SLOWER
Pay rates in Australia are rising fairly modestly, and the rate of increase is slipping. Overall, hourly rates are up +1.9% in the year to June (although people employed in their public service have seen a +2.5% rise). Overall, public service workers are paid about +2.5% higher than their private sector equivalents. If you go back three years, this hourly wage was rising +2.6%.

HOLDING ON
Auckland has held on to its 8th place in the 2017 World Liveability Report, the same as for 2016 and one higher than 9th place in 2015. Global Liveability Ranking is a list of 140 cities published by the Economist Intelligence Unit. The ranking considers 30 factors related to things like public safety, healthcare, education, infrastructure and environment. Melbourne is in top place for the seventh year in a row. The top ten cities rankings have not changed in the past year. Sydney is ranked 11th, pushed outside the top ten by terrorism fears.

WINDING UP
While reports suggest the Australian building boom may be winding down, that is not the case on this side of the ditch. A new report released today shows that Auckland will need 20,000 more construction workers by 2022. According to table 3 on page 16 of the report, Auckland currently has 170,000 people employed in "construction related occupations" and this will need to rise to 190,000 by 2022. Another +14,000 will be needed in the rest of the country. Here is a list of Auckland projects costing more than $100 mln currently approved or in construction. It totals $32 bln. The MBIE report says that construction spending in Auckland for all projects will grow to over $16 bln per year, at least until the end of 2022. Nationally, that figure will grow to over $40 bln per year in that same time period.

GOING DOWN
55.3% of NZ Government bonds are now held by foreigners (or more accurately, 'non-residents'). While that might not be 'news' (although probably most readers would have thought it was much higher than that), the real news is that the level is reducing and is now at a four year low. It was 61.9% in May 2016.

UNCLEAN BY ANY STANDARD
We have our issues with water quality. We get strident about it, and perhaps that is proper. We wouldn't want to descend to the level of China where the crisis is deep and now officially acknowledged. They would love to have a "wadeable" / "swimmable" debate. Instead they are now measuring water resources that are so bad their have lost their functional use as water. In Beijing 33% of all their water falls into that category. That is near the top of the list of ruined water quality, and most places are not that bad. But the full list is a real eye-opener.

WHOLESALE RATES FIRM
Local swap rates are up +1 bps across most terms. The 90 day bank bill rate is also up +1 bp to 1.96%.

NZ DOLLAR WEAKER
The Kiwi dollar is more than ¾c lower today. It is now at 72.3 USc. On the cross rates we are also lower but not as sharply, at 92.3 AUc and at 61.6 euro cents. The TWI-5 is just on 75.1. The bitcoin price is down -6% today and now at US$4,142, but it is holding well after its surge higher to over the US$4,000 level..

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18 Comments

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While reports suggest the Australian building boom may be winding down, that is not the case on this side of the ditch.

Not exactly, the reports by the MBIE agree with the reports published by the Australian Dept. of Employment that 10 - 12% construction growth is expected year on year.

There are some contradictory reports out of Australia that an over supply of housing may possibly cause a contraction of housing prices and a fall in construction activity. Which means the Australian boom may end.

Meanwhile in NZ we actually have an already existing contraction of housing prices and yet our government is predicting housing activity to increase dramatically. How does that work?

Hey interest, did this go a bit under the radar last week?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1190...

Well spotted
Notice there has been a greater willingness to do things since the sticky-Key has gone

After a 2014 IRD review was canned after Key was lobbied
Key's gone and the issue is re-activated
Done and dusted

Yes, it was Key's involvement in the earlier quashing of it that interested me.

The ex-IRD staffer, Andrea Black - the only submission arguing in favour of taxing the trusts locally if not paying taxes in another jurisdiction has a blog of her own;

https://letstalkabouttaxnz.com/

You can register for alerts - she's good!

Things to look forward to.

A shock fall in new car sales is forcing dealers to offer increasingly high-risk finance deals in a desperate bid to keep the flagging market moving, Bank of England economists warn today.

Forecourt saleman are being told by manufacturers to offer bigger discounts to customers as they try to reverse a fall in sales.

The economists fear the car finance market is now dangerously exposed to a downturn - particularly if car sales start to fall – and face catastrophic damage if there is an economic shock. Read more

Elderly are selling their homes to pay for surgery. Bill English claims it's a problem of success.
https://www.stuff.co.nz/national/health/95824438/elderly-kiwis-fund-surg...

Many social crises have crept up on us, in health, housing, education.
Neo-liberalism has patently failed.

You know it's failed miserably when Jim Bolger said that it had failed in the RNZ interview.

I don't think things are that bad. People just need to stop making poor life choices.

12
up

There's been 5 suicides in my extended social group just recently. One who I've met. Clearly this many suicides in succession is poor life choices, like living in poverty and having a Government abuse them. The large number of suicides is having a detrimental effect on people.

Things look bad for a lot of people. Just accept the fact that New Zealand is a shitty country treating the population so poorly they believe that it's not worth living. Hopefully people will show they care during the election by not voting for National or oxygen wasters like Peter Dunne so we can address the massive problem we have with suicide instead of ignoring it.

Agree Dictator - the pressure seems to be rising. We had the suicide of an extended family member earlier in the year. Its not a happy place to be.

The washing of hands and claiming that people are making 'bad life choices' needs to be stopped. It's an excuse for weak people to excuse themselves from any social responsibilities. What we need to do is to start looking after each other.

Zachary you pontificate from on high.

Born into the same shoes you would make exactly the same choices. Stop kidding youself you are so different, you were just lucky enough to be born out of a certain embryo at a certain time and place.

I think I've linked before - but this one is just unbelievable;

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11899109

Our health/mental health system is in crisis - it's just inexcusable and the Minister is an idiot - he keeps answering questions in Parliament, telling the question askers to "cheer up".

And then there was tonight's news article on mental health needs in Northland schools.

https://www.tvnz.co.nz/one-news/new-zealand/disturbing-figures-reveal-no...

As I said, the current Minister is an idiot.

How important was it getting back into surplus? Put another way, how many teen suicides and how many elderly people in agonising knee/hip joint pain were they prepared to sacrifice for this surplus of theirs?

Despicable.

It's a national emergency that needs to be addressed. Somewhere between mismanagement and corruption in Government Departments there should be a solution. Something that the current Government is burying.

The fact that National keeps saying there's nothing wrong and whitewashing everything makes it clear what despicable people they truly are.

They've buried it all under the mantra of "success" - and sacrificed the wellbeing of New Zealanders (in particular young ones) at the alter of "balancing the books".

Agree, I couldn't care less about the "surplus". It means nothing in itself. It is as much a sign of underinvestment as anything.

He's a total idiot.
Anyone with any social conscious at all WOULD NOT vote for National

Agreed. When you see an article on suicide in tbe Herald accompanied by photo of the minister with his real estate face you know we have a problem. I know he was a doctor but its abit like Maggy Barry being a gardener so they make her Minister of Conservation and her major claim to fame is her threat to get some new laws written so conservation land can be used for dams to provide free water for Nationals farming mates.

As with the whole 9 years - what have the Nationals done to make NZ a better place for the rank and file