A review of things you need to know before you go home on Wednesday; mortgage and deposit rate changes; home loan affordability; current account; migration; overseas visitors and travel; overseas trade; rates higher; NZD lower

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

Housing New Zealand Corporation has reduced its 5 yr rate from 5.75% to 5.69%.

BNZ has lowered its longer term, 2 yr to 5 yr, term deposit rates by -5 bps to -15 bps. See rates here.

Interest.co.nz's Home Loan Affordability reports for the month of November have been released today. There has been a significant improvement in housing affordability on Auckland’s southern outskirts thanks to falls in lower quartile house prices in Papakura and Franklin.  The lower quartile selling price in Papakura dropped to $549,000 from $575,000 in October, putting it well below its June peak of $588,000 but still above the November 2016 lower quartile price of $537,000. In nearby Franklin (which includes Pukekohe) the lower quartile price dropped to $540,000. Elsewhere in Auckland, lower quartile prices are so high that mortgage payments on homes purchased at those prices would eat up between 43% and 56% of typical first home buyers' take home pay.

The current account deficit for the twelve months ended September 2017 was -$7,100 mln. This is marginally lower than the deficit of -$7,139 mln recorded in September 2016. The September 2017 number was made up of a goods balance of -$2,377 mln, a services balance of $4,481 mln, an investments income balance of -$8,520 mln and transfers of -$683 mln. The net investment position, which drives the investment income, was at -$156.7 bln, up from -$167.9 bln in September 2016. As a percentage of GDP, the current account balance was at 2.6% compared to 2.7% as at September 2016. The net investment position to GDP ratio was at -56.3% compared to -64.3% as at September 2016.

There were 70,400 migrants into New Zealand for the year ended November 2017, the same level as twelve months to November 2016 and lower than the 72,400 peak of July 2017. The November 2017 result was made up of 131,500 arrivals and 61,200 departures. Increase in departures of non-New Zealand citizens was the primary driver behind the drop in annual migration. Net migration to Australia continues to be flat.

Overseas visitors to New Zealand were up by 8% in the year ended November 2017 when compared to November 2016. Of the record 3.71 mln visitors arriving in New Zealand in the year ended in November 2017, just over half were holidaymakers and nearly a quarter were visiting family and friends. New Zealanders travelling overseas also established a new record of 2.84 mln overseas trips, up 10% on twelve months to November 2016. The biggest increase was to Australia, China and the Philippines and biggest decrease was to Indonesia.

Imports in November 2017 were up 27% year-on-year to $5.8 bln, the largest increase since December 1999. Exports rose 20% to $4.6 bln, the largest rise since January 2014. Aircrafts, aircraft parts, motor vehicles, computers and diggers were the imports with the largest increase, whereas, milk powder, butter and cheese lead the rise in exports. The trade deficit in November 2017 was $1.2 bln, compared to an average of $447 mln for the previous five November months.

The Government has today cancelled the sell-off of state housing, which will stop the transfer of up to 2,500 state houses in Christchurch. The Government is committed to not only keeping the current stock of state housing but also add to it. This is in contrast to the previous Government, which was looking to sell state housing and reduce the role of Housing New Zealand.

The Student Loan Scheme Annual Report 2016/17, released today, shows that the total amount of overdue loan payments stands at $1.2 bln, up more than 12% on the day before. The report shows that students are leaving study with higher debt and taking longer to pay it off. Fewer students are going on to study at post-school levels, being put off by higher costs and the burden of debt. The Government is looking at policies such as free post-school education to address this.

New Zealand swap rates are higher and steeper, with the 2 yr flat, 5yr up by +2 bps and the 10 yr up by +3 bps. The 90 day bank bill rate is unchanged at 1.86%.

The NZ dollar is lower to 69.8 USc mark. On the cross rates it is at 91.1 AUc and 58.9 euro cents. This puts the TWI-5 at 72.6. The Bitcoin price has fallen to US$16,487.

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Daily exchange rates

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End of day UTC
Source: CoinDesk

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"......an investments income balance of -$8,520...."

A net $8.5 billion in interest payments and profits going off shore.

As a kind of building a frame of reference perhaps we could have the current account deficit since 1901 and the per capita assets and income for the same period.
NZ doesn't have a big history, England has 800 years of accounting records or more.
It would help if we had a bigger perspective than one decade.

That's what happens when as nation we invest more than we have saved for 47 consecutive years.

It's hard to see it being without consequence over time. The shortfall has been financed by borrowing and asset sales - these being the only two options if we elect not to print NZ $'s.

Buffett on record as saying it leads to a sharecropper - not a shareholder economy !

JB, thats a good pitch...

Has the BNZ just priced in an expected higher interest rate for it's mortgage customers over the next 2-5 years by locking in term deposit funds over the same time period on a lower rate? Now that is smart! That will work in their favour of making a higher margin on profits.

The lesson is: don't give the banks any more term deposit money than you have to.
Punish them.

Bad timing for lower quartile Papakura and Franklin properties to drop in value. Just before their big rate hikes come into play. Len Brown/Goff strike again with their low fixed annual and high variable calculation methodology.

Yes falling asset prices and rising rates on false values is never a winning combination.