A review of things you need to know before you go home on Monday; more TD rate cuts; Barfoot sales slump; TPP now a big deal; Dashboard updated, swaps rise; NZD stable, & more

A review of things you need to know before you go home on Monday; more TD rate cuts; Barfoot sales slump; TPP now a big deal; Dashboard updated, swaps rise; NZD stable, & more

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

MORTGAGE RATE CHANGES
Again, no changes to report today.

TERM DEPOSIT RATE CHANGES
Kiwibank trimmed a few term deposit rates today. You can catch up on all the many recent movements here.

A FEBRUARY SALES SLUMP IN AUCKLAND
Barfoot & Thomson's February sales were down -29% compared to the same month a year ago. At 474, their sales volumes were at the lowest we have ever seen them for a February, and the lowest of any month since December 2008. (Our record goes back to 2001.) Median prices fell -3.2% from January and average selling prices fell -1%. Sales volumes have been lower in February than January for five of the last six years and this year is no exception. Sales volumes in March are usually about +70% higher than the average for January and February. So that sets a test for March 2019 at 960. If it achieves that level it will be the lowest March in nine years. The average March over the past decade is a sales level of 1,210 transactions across the whole Barfoots residential network.

TPP NOW A BIG DEAL FOR OUR TRADE
Statsitcs NZ pointed out today that two-way trade with TPP countries accounts for almost one-third of trade and is almost touching $50 bln/year. By comparison, China, our largest single trading partner and which is not in the TPP, accounts for only 20% of our total two-way trade. New Zealand’s top three trade partners - China, Australia, and the EU - accounted for nearly half of the total trade with the rest of the world. Total exports of goods and services were $82.3 bln, an increase of +6.8% from 2017, while total imports were $80.8 bln, an increase of +11.6% from 2017. Also interesting is that 70% of our trade with the EU is with countries other than the UK. (We will have more on this separately, soon.)

DASHBOARD UPDATE
We have now updated the RBNZ Dashboard data in our Key Bank Metrics tool, now covering four quarters of 2018.

A TRUMP BUMP?
Equity markets have opened today strongly. New Zealand and Australia are up about +0.7% while they are also enthusiastic in Hong Kong (up +0.2% in early trade), Tokyo (+0.8%) and Shanghai (+1.3%). Expectations are high that the US President will cave in his trade negotiations with China, accept a deal from China to buy more soybeans, and declare victory.

FALLING AWAY
We all know that Aussie building approvals are declining and that is because of a slump in the apartment market. January data out today shows that in the year to January, apartment building approvals are down -18% and more than -50% on a January-2019 vs January 2018 basis. But also worrying for them is that house approvals are starting to slip as well and now taking 12-month-on-12-month data into negative territory too. For all that, the industry in Australia saw green shoots in the data, noting it wasn't as bad as for December. Good luck with that.

SWAP RATES FIRM
Local swap rates are firmer today by about +1 bps, except at the long end where they are up +4 bps. The UST 10yr yield is up +3 bps at 2.72%. Their 2-10 curve is higher at +20 bps while their 1-5 curve remains inverted at -3 bps. The Aussie Govt 10yr is up +4 bps to 2.15%, the China Govt 10yr is up +2 bps at 3.21%, while the NZ Govt 10 yr is up +1 bp so far today to 2.21%. The 90 day bank bill rate is unchanged at 1.89%.

BITCOIN UNCHANGED
The bitcoin price is unchanged from this time on Friday at US$3,802.

NZD LITTLE CHANGED
The NZD remains at 68.1 USc. And we are little-changed against the Aussie at 96.1 AUc, and at 59.9 euro cents. That leaves the TWI-5 at 72.6.

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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?

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12 Comments

Many appear to have noticed that sales volumes are down to the same numbers last seen in December 2008.

However the number of Auckland dwellings has increased immensely since 2008, which makes the number of sales last month actually much more dismal compared to December 2008.

Out of interest, I wonder how it tally's up with the increase in population?

Jenny Shipley has resigned her role on the board of CCB to devote more time to promoting communist ideology.
https://www.stuff.co.nz/business/111020215/dame-jenny-shipley-stands-dow...

The decorative figurehead falls….

"Expectations are high that the US President will cave in his trade negotiations with China, accept a deal from China to buy more soybeans, and declare victory." - and that will make America great again (tongue firmly in cheek) .

I would like to congratulate Professor Keith Woodfords latest mbovis article. The comments section isnt working. If you are reading this Keith, well done, keep digging. You are our only means of hearing whsts really going on. MPI should be ashamed. 800 million down the tubes.

Thanks Belle,
The comments section over there seems tot be working again.
I tend to separate out the Government and MPI as separate entities.
The decision to eradicate was a Govt action, and I am told that MPI was actually somewhat surprised.
In my opinion, no-one in Govt appreciated the complexity of the task.
But since then MPI's behaviours have not only been a snafu but they have also obfuscated.
Obfuscation leads to blocking of the off-ramps
Keith.

The percentage of NZ homeowners who are mortgage-free has dropped to 33%.
So bigger, and lower, but longer,with a growing percentage of superannuitants still with a mortgage.
Imagine turning 80, with a $300,000 mortgage!
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=122...

I see Aucklands median house price now higher than Sydney. With higher incomes in Sydney some Kiwis will be looking to make the move now.
Re capital gains tax i was reading NZ is the only country in the OECD (38 countries) without one.
We really are the outliers in the global housing/ tax environment.
For how long is the question.

CGT in UK 2018 raised 7.9b and income tax 181b - so equates to 4%. And that was double 2014. It is not a significant way of raising money and it is unpredictable ~ have a recession and just when the govt needs more money it will get minimal CGT.
I love the theory of tax the rich but reckon they will sidestep CGT and it will hit the upper middle class. Still better than tobacco taxes which hits the already poor.

because we are spushil. And having no CGT is core to the identities of kiwis.