A review of things you need to know before you go home on Monday; Kiwibank trims mortgage and TD rates, the FHBs are on the march - but there's gloom on Auckland house prices, swaps are slightly firmer, dollar little changed

A review of things you need to know before you go home on Monday; Kiwibank trims mortgage and TD rates, the FHBs are on the march - but there's gloom on Auckland house prices, swaps are slightly firmer, dollar little changed
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Here are the key things you need to know before you leave work today.

Kiwibank was busy making tweaks to both mortgage and term deposit rates. On the mortgage front, Kiwibank's 1-Year Special was dropped from 4.08% to 3.85%, the 1-Year Standard was trimmed from 4.80% to 4.60% and the 2-Year Standard was reduced from 4.94% to 4.74%

Kiwibank trimmed its TD rates across 10 different investment durations by between 5 bps (on 6-months) to 20 bps (for 5-months).

The NZ Firefighters Credit Union increased its 3-month rate by 10 bps and dropped the rates on seven durations by between 5 bps and 20bps, as below:

  • 1 month – 1.20% pa was 1.25
  • 3 months – 2.70% pa was 2.60
  • 4 months – 3.00% pa was 3.10
  • 5 months – 3.10% pa was 3.25
  • 9 months – 3.30% pa was 3.45
  • 12 months – 3.35% pa was 3.50
  • 18 months – 3.40% pa was 3.60
  • 24 months – 3.50% pa was 3.70

The first home buyers are still grabbing their share of the mortgage money following the retreat of the investors. Latest RBNZ monthly figures show the FHBs took $964 million of the $5.542 billion advanced in April. That represented just under 17.7% of the total, which was a new record high since these figures were first published in August 2014. The investors, with $988 million, only just borrowed more and their 18.1% share was in marked contrast to the 33-35% monthly share this group was taking of mortgage money prior to the RBNZ slapping tough deposit rules on them in 2016. 

Meanwhile, for the first time in about 10 years, Aucklanders are expecting their house prices to drop, according to the ASB's latest Housing Confidence Survey. All eyes will be on upcoming surveys to see if the Government's decision last month to ditch any Capital Gains Tax will lead to a reversal in such sentiment.

The Co-operative Bank has posted a 9% drop in annual profit and held its customer rebates steady at $2.1 million. Profit after tax attributable to shareholders fell $909,000 to $9.573 million with the bank attributing the decline to lower fee and commission revenue. Income rose 4%, expenses increased 6%, and loan impairments rose 42% to $3.6 million. Gross lending was up 7%, and deposits increased 5.5%. The rebates will be paid to 115,000 customers.

Our airline's announced plans to buy eight new Boeing 787-10 Dreamliners, with delivery starting in 2022 and through to 2027. The planes have a 'list' price in total of US$2.7 billion, but Air NZ is assuring us it got them at a "significant discount" to the list price, though neither Air NZ nor Boeing's going to tell us by how much. Special price for you today: Buy eight get one free, perhaps?

Auckland-headquartered respiratory care company Fisher & Paykel Healthcare, which generates 47% of its revenue in North America and whose products include equipment to treat Obstructive Sleep Apnea, has reported a record profit of $209.2 million after-tax and hit over $1 billion in revenues for the first time for the March financial year. The company's now aiming for further records in the coming financial year of $1.15 billion revenue and $240-250 million profit.

Motor vehicle financing company MTF Finance saw half-year earnings fall slightly to $4.2 million from $4.3 million at the same time a year ago. The company explained that sales were down substantially, largely due to the discontinuation of a non-recourse product offering and through Turners Finance continued their integration strategy into their automotive group diverting away from MTF Finance

Swap rates were slightly higher at the longer end on Monday, with the four, five, seven and 10-year rates all rising by 1 bp. The 10-year rate is still below 2%, however, at 1.98%. On the shorter end, the 30-day bank bill rate dropped 1 bp to 1.69%.

The UST 10yr yield has risen back to 2.32%, The Aussie Govt 10yr is up 1 bp on earlier Monday at 1.54%. The China Govt 10yr is up 2 bps on the day to 3.35%, while the NZ Govt 10 yr is down -2 bps on the day at 1.74%.

The Kiwi dollar's little changed from the start of the the week, staying steady at 65.5 USc. On the cross rates we've eased very slightly to 94.5 AUc. Against the euro we are similarly slightly lower at 58.4 euro cents.

The cryptocurrency's been on another rampant tear in the past 24 hours, up by over 8%, though it has eased back in the past hour or so. It was recently at a touch under $8,700. Most of the other major cryptocurrencies are happily tagging along for the ride.

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Barfoots have a eclectic selection of property for auction on the 29 may. Perhaps one of the agents that frequent, could provide feedback, like ol times.

It must be a great time to buy in Auckland right now, if another bank survey is saying the opposite.

I see the rag has trotted out Ashley Church to scare us about how the world will end if there is a house price crash

. . what a terrible shame for Orc Land property investors that Taxcinda didn't push ahead with Sir Mickeys mother of all CGT's . . they'd soon be in a position to lock in future tax credits , by selling at a loss .

Far from raising $ billions for the government , the CGT might have allowed speculators to accumulate massive offsets against the IRD . . to be utilised in the far far future when house prices start rising again : haaa dèee haaaaaaaa

April RBNZ numbers. 2.300 ‘loans’ to first home buyers at an average of $419,230. Total number of new loans 22,206. Total transactions nationally, yep no where near that number in April REINZ transactions are running at around a quarter of the ‘loans’ written. I have a feeling that we don’t really have a clue how big peoples mortgages... 'aggregated loans per property' really are.

Housing worth over 1.1 trillion, about 4 times GDP , what possibly could go wrong.

New loans (C31) equaled 69.8 billion in 2015. 72.3 billion in 2016. 59 billion in 2017. 64.3 billion in 2018.
So new loans have been running at plus or minus 20% the level of GDP for the last 4 years and that is not factoring in the foreign raised debt in the housing market. Heaven help the banks if people start to deleverage.

Are there any stats on remortgages vs new mortgages provided ? Seems a tad suspicious that remortgages are never explicitly reported but clearly anyone with fixed deals rolling off is going to need to refinance.

Why would they need to refinance? Refinance means changing banks... most people just re-fix.

Record share for FHBs. Tell me again why we need to change the LVR settings?

Because the banks are misreporting the true debt levels and loan to value is not mortgage to value. If you think about it first home buyers took on 10% of the total loan numbers at 2300. There were 22,000 loans in April. Did first home buyers really buy 2,300 houses in April of the 5800 REINZ sales? 39.6% of the total transactions with just 17% of the total of new debt raised to acquire them? No of course they didn't, but the RBNZ have no clue about how the banks are flouting the LTV rules.

I think you may find that it will come down to definition of 'loan'. If I have a $300k fixed and a $100k floating, is it 2 loans or 1? It will likely be counted as 2, since there are 2x loan contracts. I dont think it's a conspiracy and fail to see the connection between that and what you're implying above. It will not understate the Loan to Value ratio .. because that's based on dollars, not numbers. The above example will still show as $400k. RBNZ knows exactly what the LVR's are... since they are a condition of bank licences.

Thanks for commenting.

I told you all to buy bitcoin at 3700 and everybody laughed at me. Threw a third of my considerable income (200k+) into crypto - buying aggressively at the bottom, even cashing in annual leave to buy as much as I could. Now, 6 months later at 8750 I am starting to take profits and sell. Just in the last 4 weeks I made more money just from crypto than I made in an entire year as a junior lawyer (a LOT more in fact). Up 9k since this morning even. My portfolio is now x6 from its value in December - and more than double this tax year alone. Happy days.


Well,bully for you,though I am not impressed by those who feel the need to trumpet their successes. Do all your gambles turn out this well? if so,why bother with the day job?

Nobody's perfect,not even Buffett,but he's been pretty successful over many decades and your sneering comment tells me a lot about you.I wouldn't want you either as my lawyer,or my financial adviser.

Lonewolfnz. I am pleased for you. Please keep us informed should it all turn to sh.t.
With respect I still prefer to take the advice of Charlie Munger and Warren Buffet even if occassionally they get it wrong.
Spare a thought for those speculators, because that is what they are, that bought Bitcoin at $25,000 and were advising buyers what a great investment at that price...
Trading or speculating in Bitcoin or crypto currencies is not investing in my view.
Good luck to those that like to take a gamble. You risk takers are what make life so interesting.
I wish you continuing success but not for me.
I will stick to the equity market.

Perhaps you did not read my comment but I am starting to sell now. Yes an instant fall to zero tomorrow would be painful but fairly unlikely. And is this the same Warren buffet that recently got caught up in a dodgy pyramid scheme and lost millionS?