Here's my summary of the key events overnight that affect New Zealand with news ahead of today's Monetary Policy review by the RBNZ.
Firstly, in Canada, housing construction is trending higher. And the pace of new construction in the Vancouver region has hit a 12-month high.
China’s merchandise trade surplus rose to +US$38.2 bln in October from +US$28.6 bln the previous month. The politically sensitive surplus with the US, China’s largest export market and second-largest trading partner, stood at +US$26.6 bln, the second-highest on record, after September’s +$28.2 bln. With the rest of the world, the differences are quite small. New Zealand runs a small +US$300 mln merchandise trade surplus with China even though it is our largest trading partner for both exports and imports.
In India, their central bank is pressuring its banks to clean up a chronic bad-debt problem at their largest companies. This is an issue that they say is weighing on the country’s economic growth. It has circulated a list of 40 companies, ordering banks to either resolve bad debts owed to them by the companies or to refer them to the country’s bankruptcy courts - and that is to be done by the end of 2017. It is a major collision course.
In Australia, their largest bank CBA reported rising first quarter profits, up +6% and on track for a AU$10 bln result for the full year. They have also put aside about AU$100 mln into a fund to pay lawyers to fight more than 53,000 alleged breaches of Australia's anti-money laundering laws.
We reported important progress a few days ago for driverless cars. Now we can report that Uber and NASA have signed a deal to develop low-altitude flying taxis. They hope to start services in 2020 in Los Angeles and Dallas.
In New York, the UST 10yr yield is up +2 bp today, now at 2.32%.
The price of crude oil has firmed slightly today and is now just under US$57.50 / barrel, while the Brent benchmark is just under US$64.
The price of gold is +US$13 higher, now at US$1,285 oz. The bitcoin price is up more than US$700 on the day to a new record price of US$7,731 (NZ$11,200), a +10% burst higher. US$8,000 now beckons, a level predicted by Goldman Sachs.
The Kiwi dollar is little changed again today. We are now at just on 69.2 US¢. And on the cross rates we are at 90.2 AU¢, and against the euro at 59.7 euro cents. That puts the TWI-5 index at 72.6.
If you want to catch up with all the changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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33 Comments
“Development site values set to tumble. Chinese buyers have quit the market in droves. Metropolitan development sites values, which have surged in recent years on a wave of Chinese money, are showing the first signs of correcting after developer Nicholas Smedley secured two sites at discounts of 30 per cent or more after vendors rejected his original off-market offers, thinking they would get more through a public campaign.” (AFR)
Coming to a vacant property near ‘us’?
http://www.afr.com/real-estate/commercial/development/thirty-per-cent-d…
People becoming more gloomy about property: ASB survey
dont they know its only the election, Chinese new year, bad weather, holiday season, people are to busy buying xmas presents etc etc.
looks like sentiment has changed and now and in the future with changes to laws over investment properties it will no longer be an easy fool free way to make money
https://www.stuff.co.nz/life-style/homed/houses/98628647/proposed-chang…
"the reality is that even though inflation is now very low, the CPI figures have most likely been overstating inflation. This is because of the way the consumer price index is calculated."
Again from Australia, but are we any different?
https://www.theguardian.com/commentisfree/2017/nov/09/low-inflation-and…
Bw, there was a degree of sarcasm in my post. The question everyone should answer is what drives the increase in listings, could it be the flow of sales . As we know in 2017 unlike 2008 , interest rates are already at historic lows, prices have basically doubled, FHB are almost extinct in Auckland. David needs to invert and overlay the sales data. As an aside its Thursday morning, 860 new Auckland listings since Monday morning, last month only 1591 sales. What will drive an increase in sales.
Compared to the typical contributor I'm a layman about property but it does anecdotally seem to me that the underlying cause of the drop of prices in Auckland is a small but consistent flow of wealthy older Kiwis leaving and they are being replaced by a far larger number of immigrants who are younger and on average poorer. The money is leaving town.
The original concept behind immigration was to bring in families that earned well above average and although that still happens (new senior doctors, etc) the majority of our current immigration is low wage. The underlying flow of wealth out of Auckland has been happening for several years but was obscured by foreign investors until recently.
I would be interested to know of the evidence here. It seems to me if a boomer sells, they get the funds from the sale, paid by the buyer's financing (bank deposit, bank loan, or in the case of an immigrant, imported funds). Unless the boomer leaves New Zealand (and there is little evidence of that), the net is zero, even if the boomer buys a down-szed unit. The balance of the housing funds released will go back into the banking system. These will be spent as living costs, or transferred on death to others. Only in the case that those 'others' are overseas would there be any outflow of wealth.
As to whether there is regional flow, that seems unlikely too, although there may be anecdotes. Would love to hear of hard evidence however.
The flying taxi thing... this is similar to the promises made for nuclear fusion. For a third of a century (or more) fusion has been promised as a wonderful and clean power generation method that is just a single development away from prime-time usage. Note that the contract to NASA is for control software for these as yet undeveloped flying taxis. I will be very surprised if we get unmanned flying taxis in 15 years, much less 3 years. The stated desire in the article is electric jet powered unmanned flying taxis. Until there is a breakthrough in battery technology, this is a very unlikely design concept... The odds of any unmanned flying taxi operating in the next decade is quite low, despite the possibility that my prediction becomes an example of one of Arthur C. Clarkes rules about technology predictions. The laws of physics are rather difficult to cheat, and the required safety protocols will result in said electric flying taxi not being a viable concept. Even with assuming a breakthrough in battery technology, there are many other pitfalls in making an unmanned electric powered flying taxi a reality.
I think that finding a battery chemistry that does a half order magnitude better than Lithium is rather unlikely with Lithiums extremely high bonding capability as well as its very light molecular weight that results in the very high energy density Lithium batteries. I do look forward to being proved wrong on this in the future. I expect this to happen at some point when some genius finds a new paradigm and exploits it. Until that unknown invention happens, the electric unmanned taxi development programs are a nice way to bleed some of the profit from idealistic and naive companies.
Flying taxis are already flying and about to enter commercial service (in Dubai). At least 20 different companies developing them, many in 'stealth' mode with good funding, most with prototypes either flying or to be flying in 2018/19.
The tech is relatively cheap and easy to develop (compared to eg cars) for autonomy as hobbiest drones have illustrated (check out DJI mavic). So they are going to be a reality soon. Noise and safety are issues that will impact their ultimate success, but already range is good enough (about 300km with batteries), and batteries are likely to improve greatly over next 5 years. Makes the lifestyle block much more attractive, and cities much less attractive.
dubai 'flying taxi' "maximum flight time of 30 minutes, at a cruising speed of 50 km/h (31 mph)" so that's a range of 25km.
" nine independent battery systems. Each battery takes two hours to fully charge,"
You say it's about to enter commercial service, but sounds like that is five years away.
" The Government of Dubai says over the next five years, Dubai’s Road and Transport Authority (RTA) will work with the country and city’s aviation authorities to develop policy and laws for the AAT and its services. Trial operations will take place during this time"
https://www.theverge.com/2017/9/26/16365614/dubai-testing-uncrewed-two-…
Apparently it was originally planed to be in service "from July" which is now 4 months ago, seems they hit a few snags and have pushed that out by 5 years eh? http://www.bbc.com/news/av/technology-39003397/sky-taxi-to-fly-in-dubai…
Well Zach you’re an interesting case study
You name yourself after a Lost in Space TV show character
You consistently see pigs flying in RE
You now tell us we will be flying around in something akin to a helicopter
Nice to dream it but the energy required to lift a person and then travel requires a lot more energy than a daytime solar panel can provide
By the way you need the ability to store energy and lithium isn’t a lightweight either
It all fits into my Elysium project. Robots and flying things seem to be in the news a lot these days Science fiction becoming reality.
Apparently it only takes 8x250w solar panels to provide enough energy to charge the batteries on an electric car. I'm confident technology will continue to improve.
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