A review of things you need to know before you go home on Friday; some rate changes; migration; visitor arrivals; Auckland infrastructure projects; Housing NZ; rates stable; NZD firm

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

MORTGAGE RATE CHANGES
Housing New Zealand has dropped some of its mortgage rates by -10 bps to -40 bps. See rates here.

TERM DEPOSIT RATE CHANGES
Heartland Bank has dropped its call account interest rates from 2.75% to 2.50%.

MIGRATION
Annual net migration was down 8,800 (to 63,300) in the August 2018 year when compared with the August 2017 year, Stats NZ said today. This is the lowest August year since 2015. Net migration is continuing to ease from the record high of 72,400 in the year ended July 2017. Migrant arrivals were 129,100 and migrant departures were 65,800 for the latest year. The number of migrant arrivals in August was only slightly lower than in August 2017, so it was the increase in the number of departures that led to the fall in net migration. This is consistent with what Stats NZ seen in previous months, with the fall in net migration being driven more by increases in migrant departures than decreases in migrant arrivals. Migrant departures for New Zealand citizens were up 600 for the year ended August 2018, to 34,200. Of these, 20,900 were to Australia. This increase in departures was accompanied by a fall in the number of citizens returning to New Zealand from Australia, which led to a net outflow of 1,200 migrants.

OVERSEAS VISITORS
There were 246,700 visitor arrivals in August 2018, 12,700 more than for August 2017. The biggest changes were Australia up 3,100 to 114,400, China up 2,300 to 31,500, and Malaysia up 1,200 to 5,600. Visitor arrivals increased across every region in August 2018. Arrivals from the Asia region increased the most, up 5,100 (or 7.6%) from August 2017. Changes in other regions were Oceania (Australia and the Pacific) up 5,000 (4.1%), Americas up 1,700 (9.7%), Europe up 600 (2.8%), Africa and the Middle East up 200 (6.7%). For the year ended August 2018, visitor arrivals were up 133,100 (3.6%) to 3.8 million.

INFRASTRUCTURE
Minister of Housing and Urban Development Phil Twyford and Auckland Mayor Phil Goff today confirmed $339.2 million of 10 year interest-free loans to Auckland Council to support major infrastructure projects in Redhills and Whenuapai in Auckland’s northwest. The loans from the $1 billion Housing Infrastructure Fund (HIF) will enable the building of around 7,000 houses to help tackle the housing crisis. The infrastructure that will be built with this funding will support new housing and includes wastewater mains and pump stations, stormwater management and arterial roading, including bus and cycle lanes. The proposed developments at Redhills and Whenuapai are part of a wider programme of development in Auckland’s northwest.

HOUSING NZ
Housing NZ’s new social objectives to provide decent housing, be a fair and compassionate landlord and to help sustain tenancies will be enshrined in legislation, Housing and Urban Development Minister Phil Twyford has announced. The organisation will also no longer be required to return a surplus to the Government. “Housing NZ is a very different organisation under the helm of chief executive Andrew McKenzie and under our Government,” Phil Twyford says.

BOND OFFER
NZX listed industrial property landlord Property for Industry Limited (PFI) has announced that, following the successful bookbuild process for its offer of 7-year senior secured fixed rate bonds (Bonds), the offer has closed and $100 million of Bonds will be issued under the offer. The interest rate for the Bonds has been set at 4.25% per annum. This reflects a margin of 1.60% per annum over the 7-year swap rate. The Bonds will be issued on 1 October 2018 and will mature on 1 October 2025. The Bonds are expected to be quoted on the NZX Debt Market on 2 October 2018 under the ticker code PFI020. All of the Bonds have been allocated to intermediaries for distribution to their clients and there is no public pool available.

SWAP RATES STABLE
Swap rates were largely unchanged, with only the 10 yr swap falling by -1 bp. The UST 10yr is at 3.07% up +1 bp. The Aussie Govt 10yr is at 2.71% (down -1 bp), the China Govt 10yr is at 3.72% (up +3 bp), while the NZ Govt 10 yr is at 2.69%, and down -1 bp. The 90 day bank bill rate is up +2 bps at 1.91%.

BITCOIN UP SLIGHTLY
The bitcoin price is marginally higher today at US$6,500, a +1.7% rise from this time yesterday.

NZD FIRM
The NZD is now up to 66.8 USc. On the cross rates we are at 91.7 AUc, and at 56.7 euro cents. That puts the TWI-5 at 70.3.

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USD 
NZD
End of day UTC
Source: CoinDesk

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19 Comments

Like it or not, the US and world economy has been propelled by debt for a century. The domestic credit market’s highest growth rates are found not during the housing bubble of the 2000’s but during and after the Great Inflation of the seventies/eighties.
http://www.alhambrapartners.com/2018/09/20/we-dont-have-a-debt-problem-i...

Petrol at $2.379 this afternoon in Wellington central.

Are you a Hillclimber or sprinter MarkL

A Nissan Leaf looks better every day....

Yep… nah

A leaf looks good? Are you drunk?

For most commutes in nz an EV will do fine. ICEs are barbaric.

For most people an EV is still an overpriced waste of money. Particularly spending $20k on a leaf with a very questionable battery life expectancy. $6k corolla + 12K gas and $2k servicing will go a long long way.

You're significantly underestimating servicing costs there, plus the forward risk of rising fuel costs. I have doubts your pragmatism will take you even as far as your Corolla.

Not at all, initial service at about $700, then DIY oil and filter every 10,000km for $80max. I left out tyres and alignments as EVs still need those too.

In Whangarei with discount card under $2.00. Seems to be a price war on at moment.

One item possibly missed from overnight, Norway raised rates for first time in seven years. And from this afternoon , credit card spending up strongly in NZ and S an P upped Australia's rating,markets yawned.

Just me, or is anybody else interested in how many people have completed the pre-qualifying stuff for the kiwbuild places at papakura and are in the ballots? I suspect the numbers won't be all that high. David Chaston, might we convince you to do a little digging?

The standard Friday budget assumptions roundup:

TWI - 72.40, Treasury BEFU assumption 'around 75'
WTI - 70.80 Treasury BEFU assumption 'around 60'

Meanwhile over in OZ, blood on the floor?

https://www.youtube.com/watch?v=smPR0s2W-Ck

Scary stuff. Luckily, Auckland is safe, prices only go up there.

And part 2 with that 70 year old dude that had his interest only mortgages on his rentals kicked over to P & I.

https://www.youtube.com/watch?v=BbFvwYVfwq0

There's a part in the video at @ 2 mins 55 where the camera pans across a letter the guy had written to ANZ .

The result of this is a significant increase of our loan repayments from $5700/mth to (illegible)

If you're interest only, you're not making any loan repayments dude!

So effectively this guy has borrowed $1.5 million to $1.8 million interest only in his 60's - 70's.

"The number of migrant arrivals in August was only slightly lower than in August 2017, so it was the increase in the number of departures that led to the fall in net migration"

Yep. White flight is taking hold. Elderly evacuating to the regions and the youth are evacuating to Australia, where it's cheaper to live and hopefully afford to have a family. If someone doesn't nail the front door shut soon, by 2030 our schools will be teaching 'English' as a foreign language course. Hopefully business confidence will survive and the specuvestors will recognise that a country that looks that different 20 years from now won't have housing as an asset.
For anyone questioning this take a look at house price appreciation in Bradford, Luton, Leicester over the last 30 years compared to the UK national average.