What happened Wednesday

Business / news

A review of things you need to know before you sign off on Wednesday; bad current account deficit, NZSF makes virtue switch, HPI records housing falls, swaps up, NZD down, & more

14th Sep 22, 3:59pm by David Chaston

Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).

MORTGAGE RATE CHANGES
No changes to report here today.

TERM DEPOSIT RATE CHANGES
The Cooperative Bank raised its 6 month rate today.

NEAR-RECORD BAD
Our current account deficit is getting sharply worse, in fact it is getting close to record levels. Statistics New Zealand reports that the country's annual current account deficit was -7.7% of GDP for the June quarter, just short of the record high -7.8% during the 2008 Global Financial Crisis. The currency had already fallen overnight and it didn't fall any further on this news. The markets had expected a deficit at the -7.5% level.

PERVASIVE ANEMIA
All eyes are now on Thursday's Q2 GDP result. It will be anemic, but it should be positive. In Q1-2022 the economy shrank -0.2% from Q4-2022. That is expected to expand +1.0% in Q2-2022. Year-on-year, Q2-2022 is expected to be up +0.2% from Q2-2021.

VIRTUE INVESTING
The NZ Super Fund said it has moved $25 bln of it's overall ~$60 bln portfolio into low carbon investments. Remember, the fund was established to help out with NZ future pension requirements. It says it is confident its performance will not be affected by the drive to more sustainable investment positions.

WHERE THE SIGNIFICANT RETREATS ARE HAPPENING
REINZ's more robust HPI data shows house price declines slowed in Auckland in August but sped up in Wellington & several provincial centers. The declines are concentrated in Wellington, Queenstown-Lakes, Palmerston North, plus Papakura and the North Shore in Auckland. (The House Price Index - HPI - adjusts for dwelling size in a way the median price doesn't. The median is just the price of the middle house in the set of sales in a month. The median in one moth might be a townhouse, a shoebox apartment in another month, or a full detached house in yet another. Or nationally, the median might be a Hamilton house in one month, an Auckland one in another, or a Nelson one is yet another. The HPI tracks prices in a way that adjusts for these raw discrepancies.)

JONES REPLACES CONWAY
BNZ has appointed Mike Jones as their new Chief Economist, replacing Paul Conway who is now at the RBNZ. Jones was once a BNZ currency strategist, then went to Fonterra, and then to ASB as a senior economist.

HOUSE BUILDING IN DOLDRUMS
New home sales are still declining in Australia. They were down -13% in July. Now new data shows they are down another -1.6% in August. They have been falling all year from the peak in December 2021 and are down -28% since then

IT'S NOT ALL GLOOM
Japan reported machinery orders for July, and they were up strongly (just like the machine tool orders we noted yesterday for August). It was a rebound that wasn't expected, showing the company board rooms are still investing. These orders were up +5.3% from June and up +12.8% from year-ago levels.

SWAP RATES RISE
Wholesale swap rates are probably sharply higher today but the inversion is probably unchanged. Our chart will record the final positions. The 90 day bank bill rate is up +3 bps to 3.61% which is its highest since April 2015. The Australian 10 year bond yield is now at 3.69% and up another +9 bps from this time yesterday. The China 10 year bond rate is down -2 bps at 2.67%. The NZ Government 10 year bond rate is now at 4.01%, up +9 bps and now similar to the earlier RBNZ fix for this bond at 4.00% which was up +3 bps. The UST 10 year is now at 3.43% and up +9 bps from this time yesterday.

EQUITIES DIVE
Wall Street ended sharply lower with the S&P500 down -4.3% in Tuesday trade, led down by tech stocks. Tokyo is down -2.2% in late trade today. Hong Kong is down -2.5% so far (and Fosun International has fallen -6.5% so far, for those who remember the item in this morning's briefing). Shanghai is down -0.8% in morning trade. The ASX200 is heading for a Wednesday fall of -2.4%. And the NZX40 is down -1.1% today, led down by Fonterra (-3.2%), Westpac (-2.8%) and Fletcher (-2.1%).

GOLD DOWN
In early Asian trade, gold is down -US$20 from this time yesterday to US$1,702/oz.

NZD SINKS
The Kiwi dollar fell sharply overnight and is now at 60 USc, a net fall approaching -1½c. Against the AUD we are little-changed at 89.1 AUc. Against the euro we are soft at 60.1 euro cents. That all means our TWI-5 is down -80 bps at 69.7.

BITCOIN FALLS SHARPLY
Bitcoin fell sharply overnight and is now at US$20,418 and down -8.6% from this time yesterday. Volatility over the past 24 hours has been extreme at +/- 7.2%.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

Daily swap rates

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Source: NZFMA

This soil moisture chart is animated here.

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71 Comments

by Carinaz | 14th Sep 22, 4:17pm 1663129036

One data and everyone is jumping that house price fall has ended, is it being wise or fool.

Time will tell.

https://thekaka.substack.com/p/housing-slump-ending-in-auckland?utm_sou…

Hopefully their optimisim turns out to be true as with 20% fall are already in crash territory and any further fall from here on and NZ will replace Ireland.

Hopefully FED does not raise OCR as is bound to have effect in rest of world or RBNZ drops interest rate or....inflation goes away soon......or..........we are able to to cover everthing under the carpet or kick the tin....or.......

by bw | 14th Sep 22, 4:24pm 1663129490

Nomura forecasts 100bp rate hike next week and sees a terminal rate of 4.50-4.75%.

https://www.reuters.com/article/usa-fed-nomura/update-1-fed-likely-to-h…

In which case, our OCR is going to go a lot higher than most anticipate.

by Justa comment | 14th Sep 22, 4:24pm 1663129488

yes exchange rate pressure on the OCR

by Brock Landers | 14th Sep 22, 4:34pm 1663130052

Experience tells us that whatever Bernard postulates, the opposite happens.

by KBKIWI | 14th Sep 22, 4:43pm 1663130584

Bernard has based a lot of his recent career on saying NZ needs to structurally change a lot of the governments policies (land tax, wealth tax etc) to cure the housing crisis, so if there is evidence that the market is correcting the issue itself (by collapsing prices) then that kind of throws his whole line of reasoning out the window somewhat. Don’t get me wrong - he does some great work - but here he might be overstretched a bit.

by Fitzgerald | 14th Sep 22, 5:26pm 1663133209

He's also based a lot of his recent career on stoking FOMO and telling young FHB's to load up on as much debt as they can.

A spruiker in sheep's clothing.

Here are a few gems from a recent article of his:

I have a rule of thumb I tell every young renter I see. ...

do whatever it takes to get a deposit and the biggest possible mortgage your bank will let you have to get on the ladder so you too can get the leveraged and tax-free capital gains that median voting home owners depend on for their financial futures and to support their current lifestyles and small businesses.

Also this:

The bottom line is first home buyers wondering if they should wait for prices to keep falling back to their pre-Covid levels should stop wondering. It won’t happen.

Those who feared missing out in the frenzy of late 2020 and early 2022 when the Reserve Bank removed loan-to-value ratio (LVR) restrictions and printed $55 billion were right to panic. That FOMO may have been temporarily been replaced by FOOP, but FOMO will always trump FOOP in the long run.

www.interest.co.nz/property/117184/bernard-hickey-argues-falling-mortga…

by Independent_Observer | 14th Sep 22, 6:04pm 1663135445

I'm not 100% certain on this, but I think I recall reading an opinion piece of his a few years back and he had purchased rental properties for his children as their first homes (happy to be corrected on this if it is wrong).

So he may not want prices to fall now.

by HouseMouse | 14th Sep 22, 6:04pm 1663135477

I think he was so burnt by his infamous 30% fall prediction that he went too far the other way. Some kind of psychological factor at play, don’t know what you would call it.

by Carinaz | 14th Sep 22, 6:49pm 1663138198

Agree KBKIWI

by Hardly | 14th Sep 22, 5:54pm 1663134875

I don’t know what is putting a floor on Auckland house prices, they are building a lot and the population is going sideways.

Having said that new immigrants generally land in Auckland so if we have people leaving from everywhere but most people who arrive start in Auckland, then Auckland might be a net winner whereas other places might be net losers in terms of population.

by Carlos67 | 14th Sep 22, 6:36pm 1663137363

Spoke to some South Africans just the other day they actually got more points by NOT coming into Auckland. Was six years ago so it may have changed. I said a couple of months ago a floor is created by the cost of a new build. If new building prices skyrocket so the whole market follows.

by Hans Brink | 14th Sep 22, 7:24pm 1663140275

Thing is Carlos I also know Sth Africans who have immigrated here in the last 10 yrs or so and they start of in the provinces then move to Auckland once they have permanent residency. Still think new immigrants should be encouraged to build new.

by singautim | 14th Sep 22, 8:55pm 1663145748

It is a well-known phenomenon - first noticed by academics in 1920s New York. It makes sense; what Kiwis may appreciate as welcome diversity from the perspective of an immigrant is living surrounded by strangers which creates an urge to move to a location where there are inhabitants with a shared back-story. Too many immigrants and you may end up with ghettos that take decades to integrate (Astoria, Queens, NY is considered the 2nd largest Greek city in the world, Bradford has its Pakistani areas, Spitalfields in London's East End was over 85% Bengali when I lived there.)

by Poppyc | 14th Sep 22, 9:54pm 1663149248

you get more points by going into the rural areas which is why you'll see random sushi shops in small town nz. some will do it for a few years until their residency is granted and then move to auckland. this is obviously for those that aren't coming in on a skilled workers visa.

by HouseMouse | 14th Sep 22, 6:56pm 1663138602

Too early to say a floor has been reached in Auckland, from one month of data. But generally I think prices won’t fall too much further in Auckland, maybe another 5%.

some of the regional cities are well behind Auckland and Wellington in their trajectory, I suspect places like Hamilton and Hamilton by the Sea have another 10% to fall.

by Hardly | 14th Sep 22, 8:04pm 1663142698

I can’t really explain wellingtons fall. It went from extreme accomodation shortage to over supply in an instant.

I expect there are parts of Auckland that will drop more - particularly south of Auckland around Drury, pukekohe and pokeno where there is a massive amount of new builds.

by HouseMouse | 14th Sep 22, 8:46pm 1663145218

I was born in and grew up in Wellington.

It's always had a property market that is a bit 'funny'. Certainly a bit more volatile than Auckland.

Wellington had been catching up with Auckland in terms of house prices over the past 3-4 years, but it over-shooted. It was under-valued about 4-5 years ago, relative to Auckland, but then became over-valued relative to Auckland.

At the end of the day, it's a small city without the same kind of population and business growth as Auckland.

by kiwikidsnz | 14th Sep 22, 9:06pm 1663146363

I live there. It's the well paid Govt jobs that drive everything in Wgtn, city is highest income in NZ. Labour have massively increased public sector jobs over last 5 years, many now permitted to work from home which is killing the CBD.

If the Govt sector relocates away Wgtn will be just another Picton Ferry terminal (with worse weather).

by HouseMouse | 14th Sep 22, 9:12pm 1663146748

Wellington was badly affected by lots of head offices moving to Auckland in the 1980s.

If a National government cut back the bloated bureaucracy significantly it could hit the property market. But I don't think they are radical enough to do any significant restructuring and lay offs.

by Te Kooti | 14th Sep 22, 4:20pm 1663129214

I crunched the LSAP last night (every single bond purchase is on an excel spreadsheet on RBNZ website).

$50b of nominal bonds with an average duration of 5.3 years, rough yield of 0.8% and a sensitivity to +1bp of $28m.

So today alone, the LSAP valuation is down $210m, equivalent to $42 for every man, women and child in the country. That's about 25% of the days GDP....

I should set up a website like the debt clock.

by realterms | 14th Sep 22, 4:55pm 1663131356

All the while, CPI at nearly 8%. It's just about the biggest mess we could have made.

by Audaxes | 14th Sep 22, 5:32pm 1663133539

Just in case you didn't remember Treasury has purchased $830m of the 41s

by Hans Brink | 14th Sep 22, 6:27pm 1663136871

I know I will sound like a clown, but what is this LSAP you keep referring to TK?

by Te Kooti | 14th Sep 22, 6:45pm 1663137947

Not all Hans, it's the RBNZ term for the QE portfolio they bought as part of the Covid stimulus - Large Scale Asset Purchases. There are enormous losses on this portfolio, around $8b as at tonight. Almost certainly the largest single act of value-destruction, probably even exceeds the CHCH earthquakes.

by Audaxes | 14th Sep 22, 6:50pm 1663138210

Uptick that!!!!

by Hans Brink | 14th Sep 22, 7:27pm 1663140442

Thanks TK, I will keep an eye on that now.

by KiwiinSpain | 14th Sep 22, 10:19pm 1663150796

Hi TK,

Really appreciate your explanations!

So, just so I understand, the NZ Government or the RBNZ?, directly in response to flooding the market with low interest liquidity?, have incurred losses to date of 8 Billion?

Do I childishly then interpret the following: as the OCR rises, the losses will be even greater?

8 billion is a lot of coin. Assume us (taxpayers) pick up this tab?

(obviously i'm no finance guru!)

Thks

by Jonny.Foe | 14th Sep 22, 9:24pm 1663147440

Now crunch the gains on the financial assets that govt owns and work out how much every man, woman and child has 'made'. You will find it is considerably more than $42

by Brock Landers | 14th Sep 22, 4:32pm 1663129957

https://www.stuff.co.nz/stuff-nation/assignments/contribution/129824799…

by Solid_Granite | 14th Sep 22, 4:53pm 1663131191

An actual advertisement on a news website only labelled an opinion piece?

by dumbthoughts | 14th Sep 22, 5:14pm 1663132497

"We've run out of PIJF money so now we have to republish property listings"

by Brock Landers | 14th Sep 22, 5:20pm 1663132812

Stuff will do ANYTHING for that sweet sweet PIJF money. They have no shame.

by HouseMouse | 14th Sep 22, 5:52pm 1663134751

Pathetic for that to be even published.

NZ media is one big pile of p**

by Nzdan | 14th Sep 22, 5:25pm 1663133155

It's like a mixture between a humble brag, a cry for attention and an advertisement.

by The Person | 14th Sep 22, 8:15pm 1663143359

how on earth did that 'opinion' make it past the editor?

Maybe if they get rid of that ugly as poly tunnel in the backyard they might have some more interest.

by Kohukohunui | 14th Sep 22, 10:07pm 1663150059

We were originally told the property was worth…

Worth what someone will pay for it, nothing else.

by keithwoodford | 14th Sep 22, 4:34pm 1663130073

Here is the key statement from the Stats Department, buried well down in the Stats Dept release, re the external current account deficit and financial offsetting flows.

In the June 2022 quarter, the financial account recorded a net inflow of $8.3 billion from overseas. This inflow helped to finance the current account deficit.

Overseas investors injected $5.5 billion into the New Zealand economy during the June 2022 quarter. By comparison, New Zealand residents reduced investment in overseas financial assets by $2.7 billion.

The net financial inflow for the last 12 months was >$27 billion (cf approximately 11 billion for the previous year) but I would need to dig a little deeper to get the breakdown between overseas investors and NZ residents repatriating capital.

My key point is that net capital inflows of $27 billion to balance the external current account deficit are non-sustainable and there has to be a day of reckoning. The decline in the TWI index below 70, combined with the NZD bouncing around 60c USD and 89c AUD, would seem to tell us that elements of that reckoning are already with us.

There are unpleasant implications for all of interest rates, inflation and living standards.

KeithW

by Te Kooti | 14th Sep 22, 4:51pm 1663131065

The current account deficit is financed via the cross-currency basis swap which is moving wider naturally. It moves wider until we attract issuers of Kauri bonds. That's how we fund it. It's another indicator flashing red for the economy.

by Audaxes | 14th Sep 22, 6:09pm 1663135791

But NZ Bank NZD borrower / USD lender pays the Xccy basis to the supranational NZD lender / USD borrower.

I will check with a friend in the market place who monitors Kauri issuance.

by Audaxes | 15th Sep 22, 11:04am 1663196658

Holdings of Kauri bonds (D35)

by J.C. | 14th Sep 22, 4:56pm 1663131374

I would need to dig a little deeper to get the breakdown between overseas investors and NZ residents repatriating capital.

Interested to know precisely what this means. Would it mean liquidation of foreign investments?

by keithwoodford | 14th Sep 22, 5:55pm 1663134937

It will be a mix of repatriated profits and liquidation.

Repatriated interest earnings should already be be within the current account.

KeithW

by Audaxes | 14th Sep 22, 6:09pm 1663135749

When I left the UK to return to NZ back in 1998 I sold up my foreign investments and residential property to buy $Kiwi. I liquidated my self managed UK pension around 10 years later and bought $Kiwi to repatriate to a NZ pension fund approved by the NZ government actuary. I immediately collapsed this vehicle and moved the funds into my family trust.

by Snow | 14th Sep 22, 5:09pm 1663132166

There are unpleasant implications for all of interest rates, inflation

Hi Keith, are you able to expand on this statement a bit please as my knowledge around this subject (like many) is lacking? I had a flick through this article from a few years ago to try get a handle on possible implications but it made conclusions based on low inflation at the time in NZ. Cheers.

https://www.rbnz.govt.nz/-/media/project/sites/rbnz/files/publications/…

by keithwoodford | 14th Sep 22, 6:13pm 1663136023

That article is indeed historical from 25 years ago. To some extent NZ was rescued at that time by improving prices of agricultural exports.

It is a big topic, but in very broad terms, when inward and outward flows of capital do not match, then the exchange rate changes to bring them back into balance. When the exchange rate declines, then imports are curtailed.

If the NZ dollar continues to depreciate, then that will lead to imported inflation - there is plenty of that already in the pipeline.

The key tool for slowing down the currency depreciation is to increase interest rates.

Another way of looking at it is that with the external current account in heavy deficit, we are living beyond our means. At some time there has to be a day of reckoning and at that point living standards have to take a hit. It is possible to live in a fools' paradise for a long time but not for ever.

The financial reef fish dart hither and thither on a minute by minute basis, but in the long run there are tides and ocean currents that can have bigger effects.

KeithW

by Snow | 14th Sep 22, 7:18pm 1663139916

Thanks very much for that Keith. Seems to be the perfect storm in a way, with increasing inflation and interest rates, a depreciating dollar and yet the deficit continues to increase?

If international markets start losing confidence in our ability to “start living within our means” then is that only reflected in the currency markets? Or what sort of funding does NZ receive that could be subject to restrictions or increased costs on top of our exchange rate being affected?

I realise this is pretty basic stuff for a lot of commentators on here, I’m just trying to tie together another financial aspect as it’s playing out. I’ve had no financial education :).

Thanks again Keith, I always appreciate the articles and comments you write in Interest.

by MLSmith1 | 14th Sep 22, 8:58pm 1663145909

Look at a nations finances as similar to a business… as risk increases then potential funding dries up and those still willing to invest demand increased returns (lower asset pricing and higher interest payments).

in short, with out a total clean out of management (government), a restructuring and recapitalisation then good old NZ is F’d

by Smudge02 | 14th Sep 22, 8:27pm 1663144047

Very much agree with Snow, your knowledge is incredible and you have a great way of explaining things. I am nowhere near that sort of level but do find commentators like yourself great in that I am learning a lot. Thanks very much for taking the time to explain and clarify Keith.

by J.C. | 14th Sep 22, 5:02pm 1663131741

"Who's afraid of inflation? Not Japan." This is Jesper Koll. Renowned economist based in Japan. Fascinating read.

Why Japan is seemingly not afraid of inflation:

There are two primary reasons:

1) the government here is not afraid to intervene in markets to preserve the purchasing power of the people

2) Japan`s domestic industrial structure is much more cut-throat competitive.

The net result of this seeming contradiction – government intervention going hand in hand with extraordinary competition – is a much lower inflation equilibrium here in Japan compared to what we get in the less interventionist and more oligopolistic US economy. There, a few producers and distributers are price-leaders and effectively control the market.

Clear speak: Japan is much more fragmented and more cut-throat competitive, while America`s industrial structure has been consolidated and has de-facto become more oligopolistic or oligopsonistic.

The net result is significantly lower price power for suppliers of goods and services in Japan relative to the United States. No matter how differentiated a product or service you offer in Japan, within days or weeks, a competitor will follow suit offering something similar but at a lower price point.

https://japanoptimist.substack.com/p/whos-afraid-of-inflation-not-japan…

by HouseMouse | 14th Sep 22, 5:54pm 1663134891

Excellent piece

by Audaxes | 14th Sep 22, 6:22pm 1663136579

1) the government here is not afraid to intervene in markets to preserve the purchasing power of the people

Yen has only strengthened against the USD, until recently, more so after the Plaza Accord.

by lonewolfnz | 14th Sep 22, 5:24pm 1663133070

The environment is quite scary now. Its certainly stressful for me, yet I have no debt and am still (mostly) in cash / term deposits (my crypto holdings were green today by the way, and equities not that bad due to the NZD - my total equity investment balance overall is also in the green but not that much).

I can't imagine the state of those who are retired and relying on a nest egg, or those with very large equity / crypto portfolios. Worst of all are the home owners and investors with giant mortgages that are about to reset. When their mortgage payments double into a recession what happens then? And that assumes mortgage rates top at "only" 5-6% rather than something higher like 7-8%.

And those property investors will feel the noose tighten as rates go up AND the mortgage tax limitation starts to kick in. They'll be earning tens of thousands for tax purposes, but losing tens of thousands in actual cash - so how do they pay the tax? Not sure the bank will want to lend more.....

by J.C. | 14th Sep 22, 5:52pm 1663134725

I can't imagine the state of those who are retired and relying on a nest egg, or those with very large equity / crypto portfolios.

As I have stated on this site before, ol' ratty has potentially another 70-85% to fall. If people are working on these parameters, then they're likely to have some kind of strategy under different scenarios. At least with BTC, you know that the vast bulk of it is 'not for sale'.

F'more, the paycheck to paycheck syndrome is a lifestyle choice for some and unfortunately not a choice for others. While it is not ideal, being overweight in cash is not necessarily bad.

by lonewolfnz | 14th Sep 22, 6:18pm 1663136332

85% fall from here is a $3000 bitcoin. Lower even that the 2018 low.

I'm sure anything can happen but I really don't see a $3000 bitcoin unless something major happens

Unless you mean 85% from teh $69k ATH which is $10,300 and yes I can see that has a (dire) possibility, though perhaps worst case scenario

by J.C. | 14th Sep 22, 6:36pm 1663137413

85% fall from here is a $3000 bitcoin. Lower even that the 2018 low.

Yes Woflie. That is a 'worse case' scenario and what I consider to be a low-probability event. 85% from ATH is much more likely, so 9-10k can be another point to consider.

People will know their average price point for the asset so they can easily work out at what point they need to sell. Remember that much BTC was purchased under 10-12K. This is where off-chain analyttics becomes useful.

by The Person | 14th Sep 22, 8:24pm 1663143844

what does someones average purchase price have to do with the need to sell? All that matters is expected future returns vs opportunity costs. Cost to purchase is a sunk cost?

by J.C. | 14th Sep 22, 8:43pm 1663145014

To understand breakeven cost

by HouseMouse | 14th Sep 22, 5:57pm 1663135049

Very very few people will have mortgage payments that double.

by DTRH | 14th Sep 22, 6:03pm 1663135437

New Zealand went all in on housing, lowering rates pushing up prices creating FOMO getting people to invest in second homes as a income so much debt out there. Now inflation has hit the world rates are climbing and people who are over leveraged will be paying for this gamble, so many people thought they could not lose some still strangely think this is just a small correction. if you are over leveraged sell whatever you can before it’s out of your hands.

by Audaxes | 14th Sep 22, 6:58pm 1663138701

That's the plan - aggregate the debt ridden properties into the hands of the few. In the meantime, as shareholders of the banking system, they collect the dividends and the rewards of debt financed share buybacks. A rentier society.

by Kate | 14th Sep 22, 10:37pm 1663151849

Accumulation by dispossession

by Fossil Lover | 15th Sep 22, 7:19am 1663183197

Almost as if it was planned!

by Independent_Observer | 14th Sep 22, 6:59pm 1663138786

Is there a graphing function on interest.co.nz showing the yield curve (inversion)?

by GV 27 | 14th Sep 22, 8:26pm 1663143961

NZD is tanking hard against the Yen, this might be a bloody overnight market.

I wonder what the TWI will be when I wake up.

by HouseMouse | 14th Sep 22, 8:51pm 1663145466

Yep steep daily fall, but I'm confident it will stabilise.

NZD to JPY has been up and down in the 83-88 range over the past few months, but hasn't looked like going much outside that range.

by HouseMouse | 14th Sep 22, 9:00pm 1663146053

Filled up the tank in Auckland today with Unleaded 91 at $2.53 a litre. Not bad.

Price will probably shoot a bit higher again with the weakening NZD.

by The Person | 14th Sep 22, 10:38pm 1663151896

Topping up the e-bike overnight at 17cents a kWh. Not bad.

My commute should cost me about $4 this year.

Price not likely to change much with the weakening NZD

by HSL | 15th Sep 22, 6:22am 1663179732

Guess it depends on your commute and life circumstances. With two kids that need to be dropped at school and factoring in the cost of the bike it didn’t make sense for me at the time to get an e bike. I’d love to know the maintenance cost and life of an e bike, presuming the battery will last about 5 years and possibly not be able to be replaced?

by HouseMouse | 15th Sep 22, 7:16am 1663183013

Exactly.

with the commitments of my kids / family across wide areas of Auckland there’s no way I could do without a car.

we do plan to replace with an electric car in 1-2 years.

by The Person | 15th Sep 22, 2:58pm 1663210697

You don't have to do without a car. Use the bike for most of your trips and use the car for long distance ones, or the odd occasion where you need to bring a large appliance home.

If you're a two three or four car family you should be able to get rid of at least one of them.

by The Person | 15th Sep 22, 2:12pm 1663207965

my ebike has two kid seats. They get to daycare and school and weekend sports on the back of the e-bike.

Maintenance cost is barely worth mentioning, drop of oil on the chain every couple of months. I guess the tyres and brake pads will need changing at some point. Same as with the car, only much much cheaper.

Bosch state the battery should last 10 years and it's trivial to replace, unlock it and it lift off. Looks like replacements re NZ$600-1000 depending what capacity you go for. Rediculously expensive per the watt-hour if you compare it to a nissan leaf replacement battery. But in absolute terms, $600 every ten years is not bad.