A review of things you need to know before you go home on Monday; Kiwibank raises a TD rate, poll says we are optimistic, inflation tame, new Chinese buyer frenzy, Fitch likes NZ, swaps lower, NZD firms, & more

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

MORTGAGE RATE CHANGES
None so far today.

TERM DEPOSIT RATE CHANGES
Kiwibank have launched a market-leading one year rate of 3.55%. Details here.

LOOKING GOOD
Roy Morgan polling shows that we are a happy, optimistic lot going into 2019, although slightly less than at the same time in 2018. This is from a poll that has been tracking this since 1989.

NON-TRADABLE INFLATION EASES
ANZ's independent monthly inflation tracker is +1.9% higher in December than the same month a year ago (and the same as what Stats NZ reported in the year to September). They say: "The ANZ Monthly Inflation Gauge fell 0.1% m/m in December. Housing-related price pressures are trucking along, but were not strong enough to offset a large, unexpected fall in domestic air travel prices in the month. This brings the December quarter signal for non-tradable inflation to 0.7% q/q, with annual growth easing from 2.4% to 2.3%."

"WATER BEHIND A DAM"
Chinese buyer interest in New Zealand real estate might be picking up again; it certainly doesn't seem to have abated. This from the Chinese realestate website Juwia.com posted an article by its CEO which includes this: "In New Zealand, a 24-story Miami-style apartment building planned for Auckland's North Harbour started a frenzy among local and Chinese buyers when it was advertised online. Chinese buyers snapped up 20 apartments per week at the building, which will likely be called No 1 Kaipiho. Some types of apartments have sold out entirely."

NEW RBNZ APPOINTMENTS
Simone Robbers and Christian Hawkesby will join the RBNZ as Assistant Governors. Their appointments complete the Reserve Bank’s new Senior Leadership Team structure announced in 2018. Robbers is joining from the FMA, while Hawkesby is joining from Harbour Asset Management.

NEW KIWIBANK APPOINTMENTS
Kiwibank has also announced two new senior appointments. Mike Hendriksen (ex Westpac) has joined the state-owned bank as its as Chief Legal Officer, and next week Elliot Smith (ex ASB) begins as its new Chief Strategy and Innovation Officer.

PAYMARK SALE SETTLES
The $190 million sale of Paymark by ANZ, ASB, BNZ and Westpac to France's Ingenico Group has been completed. Announced in early 2018, the deal has been approved by the Commerce Commission and the Overseas Investment Office.  ANZ, ASB, BNZ and Westpac had each owned 25% of electronic payments processor Paymark.

A LOWER GROWTH OUTLOOK
A unit of Fitch that does macro economic research likes what it sees in New Zealand, even if it sees tamer growth. "We forecast New Zealand's fiscal surplus to narrow to 0.8% of GDP in FY2018/19 (July-June) and 1.2% in FY2019/20, relative to 2.1% in FY2017/18, marking a downward revision from our previous forecasts of 2.0% and 1.9% respectively. This is on the back of the country’s slowing economic growth, which we expect to weigh on revenue collection over the coming quarters, combined with greater spending as outlined in the new Wellbeing Budget for 2019. That said, New Zealand's public finances are likely to remain healthy, posing little risk to macroeconomic stability."

SWAP RATES DRIFT DOWN
Local wholesale swap rates have lower today, down almost -2 bps across the curve. That pushes the short end  to a new all-time low.. The UST 10yr yield is unchanged at 2.70%, stable in very light trade Their 2-10 curve is just under +16 bps. The Aussie Govt 10yr is at 2.29% and down -3 bps today, the China Govt 10yr is up +2 bps at 3.16%, while the NZ Govt 10 yr is at 2.34%, and down -3 bps since this time on Friday. The 90 day bank bill rate is unchanged at 1.93%.

BITCOIN DROPS
The bitcoin price moved sharply lower in a short burst earlier this morning and now trades at US$3,520, down -2.7%. These periodic resets continue to be unexplained even though they happen fairly regularly. They give the look of a major player manipulating the market price.

NZD HOLDS
The Kiwi dollar is holding its level in light trading at 68.3 USc. On the cross rates, we have moved up slightly against the Aussie to 94.7 AUc and are now at 59.5 euro cents. That puts the TWI-5 marginally higher at 72.2.

This chart is animated here. For previous users, the animation process has been updated and works better now.

Daily exchange rates

Select chart tabs »
The 'US$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'AU$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'TWI' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥en' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥uan' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '€uro' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'GBP' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'Bitcoin' chart will be drawn here.
Loading...
USD 
NZD
End of day UTC
Source: CoinDesk

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?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

7 Comments

I never really thought about Chinas century of humiliation and that it was still a big thing in China

ADV China
https://www.youtube.com/watch?v=HrzJcnK_c-4

So umm, what happened to the foreign buyers ban? Wasn't the ban intended to stop this type of behavior. I still think a foreign buyers property tax would be far more effective, seems to be working for Canada and Australia which have foreign buyers taxes for proeprty.

"In New Zealand, a 24-story Miami-style apartment building planned for Auckland's North Harbour started a frenzy among local and Chinese buyers when it was advertised online. Chinese buyers snapped up 20 apartments per week at the building, which will likely be called No 1 Kaipiho. Some types of apartments have sold out entirely."

Nope, the FBB has a huge carve out for this sort of buying. 20 units or more in an apartment block and its a free for all.

Now the ban will allow foreign buyers to hang on to apartments bought off the plan, as long as they are part of a development that is 20 or more units large.

Up to 60 per cent of units in new apartment developments of this size could be purchased by foreigners to keep and rent out, although the Government could set that limit lower in regulations, depending on market conditions.

Those buyers would still not be allowed to occupy the unit themselves, but could rent them out.

Surprise surprise that worked well COL !!! next we will have an apartment over build and an Australian type disaster !

Don't you mean we'll have a bunch of foreign-funded apartment supply?

This allowance seems like a good thing. Foreign money increasing the stock of more intense housing rather than simply buying up NZ's land seems like a good way to get more dwellings built and help alleviate housing costs.

We've a long way until we have an overbuild, but it wouldn't be a bad thing to see prices come down in Auckland.

"The 72.5 metre apartment planned for Kaipiho Lane, Albany will feature more than 280 apartments, 11 lifts, a helicopter landing pad, residents' cinema, swimming pool, clubhouse, ballroom, 24 hour concierge and robotic valet parking."

You think they want any Laowai in there? they've been marketing it to Chinese since November, if that 20 apartment per week figure is true, thats 160+ of the 280 Apartments sold already.

So umm, what happened to the foreign buyers ban?

There never was a foreign buyer ban.

Permanent residents can buy property. And foreigners with a kiwi passport will be unaffected.