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/LOAN RATE CHANGES
TSB has jumped in with a market-low 6.69% one year fixed home loan offer. It cut other rates too. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
TSB also cut their TD rate offers today. All updated rates less than 1 year are here, for 1-5 years, they are here.
AUCKLAND HOUSE PRICES FALL -$2000 PER WEEK
Residential property values are 'slowly shrinking across all price brackets in almost every part of Aotearoa', says QV. They say average dwelling values in Auckland are down an average of almost $9000 a month for the last six months.
NATIONAL ASKING PRICES FALL -$2000 EVERY WEEK IN 2024
Average asking price on Trade Me Property are down -$50,000 since start of the year. This is happening while stock levels hit a 10-year high.
BOUNCEBACK, BUT NO PROGRESS
Although ANZ's truckometer metrics lifted in July from June, the light traffic index is virtually unchanged from July 2023, and the heavy truck index is -6.1% lower.
MORE [FOREIGN] DEBT, MORE HOUSEHOLD SOLAR
New Zealand Green Investment Finance (NZGIF) has coordinated a $130 mln debt line from Société Générale, building total funding to $365 mln for medium to long term debt to solar providers. That will grow the residential PPA (Power Purchase Agreement) portfolio, managed by SolarZero, to cover 20,000 households.
MORE IMMIGRANTS, BUT ARRIVING AT A SLOWER PACE
The pace of net migration continues to cool off from last year’s record highs. There was an estimated net inflow of +2700 people in June, compared to an upwardly-revised +3400 in May. This was the smallest monthly inflow since August 2022, and notably lower than the average of around +4000 a month that we saw in the years before the pandemic. That is +73,300 in the year to June. And note the 'positive' revisions.
ASB HIRES NEW CHIEF RISK OFFICER FROM INDONESIAN BANK
ASB has named Andrey Faskheev as its new Chief Risk Officer effective September 16, subject to a Reserve Bank green light. Faskheev is currently Chief Risk Officer at PT Bank Commonwealth in Indonesia. Like ASB, PT Bank Commonwealth was a subsidiary of Commonwealth Bank of Australia until it was sold earlier this year to OCBC Indonesia. Faskheev succeeds Amie Nilsson who has become ASB's Chief Operating Officer.
HALVED, BUT STILL FOUR TIMES HIGHER THAN SUSTAINABLE
Wholesale electricity prices may have halved since last week's peak, but they remain four times higher than levels sustainable for most industrial electricity users. Even at these 'half' levels, jobs are at risk. When we wrote this, they were at $450/$500/MWhr and still higher in the South Island than the North.
NEED TO FILE A RETURN?
The IRD released draft guidance to help investors know when they need to file a tax return to include income from their share investing activity.
GOOD GAIN BUT STILL LOWER THAN PRE-PANDEMIC
Overseas visitor arrivals totaled 3.2 mln in the June year, up +676,000 or +27% from the low June 2023 year. The rise was mostly driven by China, the United States, and Australia. Despite the increase, these visitor arrivals this year were -17% lower than the record for a June year of 3.9 mln in 2019. Infometrics notes Queenstown Airport arrivals remain strong at 123% of pre-pandemic levels, as people from Australia are still heading to the slopes this winter. Auckland and Christchurch arrivals are both at 84% of pre-pandemic levels, while Wellington trails behind at 72% of pre-pandemic levels.
WANT TO BE SCARED?
Check this out. It is not new, but it is still a surprise to most people.
DAIRY PRICE TRENDS
There is a diary Pulse auction event tonight and the derivatives market suggests that the +2.4% bounce that WMP got at the last full auction is likely to get wound back. But the smaller SMP price gains are likely to continue.
EYES ON THE RBNZ
Join us tomorrow for full coverage of the RBNZ Monetary Policy Statement, their decisions, and what they mean for the economy, investors, and borrowers. Financial markets favour a -25 bps cut, while economists are divided between that and an on-hold decision. The disparate views mean a market reaction is likely whatever happens.
BETTER, BUT NOT GOOD
In Australia, the Westpac-Melbourne Institute Consumer Sentiment index rose by +2.8% from the prior month to a six-month high of 85.0 in August, although this is still quite a low level. Views on family finances bounced back from last month but remain weak. But there were some clearer signs of support from tax cuts and fiscal measures. Consumers seem less worried about further interest rate increases than last month, and Australians are still untroubled by jobs outlook. However, home-buyer sentiment sank to new lows as price expectations cooled noticeably.
SWAP RATES HOLD
Wholesale swap rates are probably little-changed today awaiting tomorrow's RBNZ signals. Our chart below will record the final positions. The 90 day bank bill rate is up +2 bps at 5.38%. The Australian 10 year bond yield is down -5 bps from this time yesterday at 4.03%. The China 10 year bond rate is sown -6 bps at 2.19%. The NZ Government 10 year bond rate is down -3 bps at 4.29% and the earlier RBNZ fix was at 4.26% and down -1 bp from yesterday. The UST 10yr yield is down -3 bps from this time yesterday at 3.91%. Their 2yr is now at 4.02%, so that curve is little-changed at -11 bps.
EQUITIES MOSTLY LITTLE-CHANGED
The NZX50 is up +0.2% in late trade today. The ASX200 is up +0.1% in their Tuesday afternoon trade. Tokyo is back from holiday with a strong +2.2% rise. Hong Kong is down -0.1% at its open. Shanghai is up +0.1% in its opening trade. Singapore has bounced back +0.9% at its open. Wall Street opened its week with the S&P500 unchanged in its Monday trade. It is the heart of their summer holiday season there.
OIL RISES
The oil price is up +US$2 from this time yesterday, now at US$78/bbl in the US, and at just on US$81/bbl for the international Brent price. Straits of Hormuz tension is a factor.
CARBON PRICE FIRMS IN LIGHT TRADE
Today the carbon price is up +$1 at $53.50/NZU today in light trade. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD RISES BACK UP
In early Asian trade, gold is up +US$37 from this morning, now at US$2464/oz and flirting with ATH levels.
NZD FIRM
The Kiwi dollar has continued to firm, up +20 bps from this morning, now at 60.4 USc. Against the Aussie we are also up +20 bps at 91.5 AUc. Against the euro we are firm at 55.1 euro cents. This all means the TWI-5 is up +20 bps from yesterday at 69.
BITCOIN FIRMS
The bitcoin price has risen +1.3% from this time yesterday, now at US$59,473. Volatility of the past 24 hours has been moderate at just on +/- 2.5%.
USE OF AI
No articles on this news service are produced with AI. Occasionally we use AI to derive images. They are always identified in the attribution.
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107 Comments
Don't forget the massive cash flow, having to pay tax despite making a loss, unruly tenants, property damage, floods, building issues, appliances failing, healthy homes upgrades etc. Insurance and rate costs up massively. Rents barely beating inflation.
All that when you could be at the beach with all the money in VOO or QQQ. Or even BTC / Gold.
All that when you could be at the beach with all the money in VOO or QQQ. Or even BTC / Gold.
Saylor was talking about HODL'ing a single BTC as like banking USD6k per day based on his target price of USD13 million.
Thought that was quite funny. Relayed this to the water cooler crew and they thought the idea was madder than a box of frogs.
So is paying for a rental property to live in. Why not just burn the cash in front of you because renting is very close to doing that. There is a difference in using property solely as an investment vehicle vs using property to live in. In the former those with 4 or 5 properties might be discouraged by the market changes if it were not tenants who were paying massively for the equity growth for them already. In the later if the choice is between owning and renting only one sees the entire lifetime of cash go up in smoke (well not unless you are on leasehold land with building restrictions with no insurance and decide to burn the house down). In fact over time housing has been the best investment for retirement as it also allows for accommodations & necessary changes to allow for degeneration. It is far better then winding up on the street at the age of 75 with mobility housing needs that are not available in the private rental market. You may need to learn it is very hard to live in a house if you cannot enter the door or use the bathroom.
Pretty sure the departure cards have been dumped ...the new system is digital
https://www.customs.govt.nz/about-us/news/media-releases/no-internation…
AUCKLAND HOUSE PRICES FALL -$2000 PER WEEK
NATIONAL ASKING PRICES FALL -$2000 EVERY WEEK IN 2024
I recall numerous posts several years ago Spruiking how prices were then rising at $2000.00 every week! It read like it was already banked - and it was intended that way. Its understandable that on the ride down, this realization is received quite differently. If calculated the same way there would be some pretty meaty overdrafts going on.
Even better still, the renting is cheap today and the homes to buy, even much, much cheaper come 2026/2027.
If needing to making offers today, in the "falling knife" market: Buyers should only offer -30% below current asking.
Don't get sucked into any BS that the real estate agent says. (yes every word they utter is a riddled with deception, as proven by the Property Brokers conviction....)
WANT TO BE SCARED?
Check this out. It is not new, but it is still a surprise to most people.
Water is grossly under-priced as a commodity. If you think electricity suppliers have New Zealand in a pinch currently imagine what releasing private interests into water would do. Water will be a licence to print money!
https://www.auckland.ac.nz/en/news/2023/04/05/a-short-history-of-doomed…
There has been a standing team in NZTA that has been paid and engaging consultants for over 40 years on proposals for another Waitemata road crossing. A car option is not viable without bankrupting us but they still plug away at it.
Since this govt came into power the spend has been at least $36M and counting.
I don't get why people who complain about govt largesse never seem to complain about the vast amounts of money the govt and council's throw at roading and parking. Ideological blindness.
A brief & not exhaustive summary several months ago of WCC profligate idiocy that you could easily find yourself (yes, I know that the reading deal has recently finally been stopped - why was it even a question in the first place)
Town Hall music venue $340 million
Rebuild central library rather than use existing ones – $189 million
A $13 million carpark building
Cycleways $226 million
Convention Centre $169 million
$32 million corporate welfare for Reading Cinemas
$139 million on the Golden Mile (removing cars)
$236 million on food recycling
Plus more recently the Thorndon quay stoplights & judderbar debacle
https://www.kiwiblog.co.nz/2024/02/another_call_for_a_commissioner_for_…
In the meantime, the CBD has deteriorated to unsafe nogo areas due to the increased council & police tolerance of feral populations of rough sleepers and "temporary" housing long stay, disrupting customer bases resulting in the increased closures of many once viable businesses.
Only ratepayers should be able to vote in local authorities elections
Many of those are investments. Having been at an Amazon conference recently it made me realise the amount of money a conference centre can bring in. Same with an upgrade of a main street (particularly removing cars which is so last century). Not sure about music venues but it sounds like something councils have always provided, and at quite an expense I imagine looking at some of the old amazing buildings. I don’t know why they rebuilt the library etc, I imagine there was a reason.
You do have to remember that businesses pay rates too (and quite a lot I’m told), an ageing city with good water but nothing else of interest might sound good to you but they may see it differently.
Old town hall original budget cost was $43M, now over $300M.
WCC couldn't run a bath
https://www.thepost.co.nz/a/nz-news/350098960/councillors-kept-dark-abo…
and social housing is a central Govt function, not local ratepayers charity
https://www.stuff.co.nz/life-style/homed/housing-affordability/12912781…
Another boutique brewery has gone into liquidation. Tough out there for many but craft beer would have to the one of the first cabs off the rank when pulling back on discretionary spending.
If you had been paying attention to my revelations, this news should come of no surprise.
And let's be realistic. Is it prudent to double down on capital investment in a brewery that focuses on an immediate addressable market like Mangawhai?
I agree , they did it for love not money, sure they wanted success but they where prepared to work for it, brewing is hard work. they loved the craft.
However property speculation is not, and we are now at the very sharp and pointy end of some very serious losses for those as late to this game as the boys at Pacific brewing where, but there is not going to be a couple, there are about to be thousands of late entry property investors go to the wall.
no one needs a fancy beer, but people need a cashflow negative property even less.
I agree , they did it for love not money, sure they wanted success but they where prepared to work for it, brewing is hard work. they loved the craft.
Which is admirable. A colleague has invested in the craft beer game in Asia. But they're taking a different approach - affordable craft beer. Quality beer with a different taste profile, but without the silly price tag.
Updates from across the Tassie. Construction getting walloped.
The latest ASIC release shows corporate insolvencies for June 2024 remain at their highest level since monthly data was first published in Jan-1999, with CCI’s discussions with business recovery and insolvency specialists suggesting the number will continue to increase.
The ATO data, which are only released annually in October each year, show the value of collectable debt has practically doubled from $26.5 billion in 2018-19, to $50.2 billion in 2022-23. Industry specialists have told CCI that they estimate the value of outstanding collectibles to have reached the high ‘$50 billions’ in 2023-24.
By industry, Australian corporate insolvencies and outstanding debt collectable remain concentrated among commercial real estate, residential property development, construction, retail and hospitality. These sectors dominate the portfolios of non-bank lenders catering to sub-prime borrowers, who struggle to secure financing from conventional banks reluctant to lend to those with poor debt service capabilities.
The Australian Prudential Regulation Authority’s research has consistently shown that commercial real estate and residential development exposures are the most likely drivers of bank failures, as they were in the 1991 recession, and has strongly discouraged regulated deposit-taking institutions from risky lending in these areas.
https://www.livewiremarkets.com/wires/rising-collectable-debt-underscor…
They can't be doing that bad because this dump in an ok area with heritage protection sold for $7.8m ($8.3m with stamp duty).
No views, not near a beach.... https://www.domain.com.au/41-robertson-road-centennial-park-nsw-2021-20…
January 05, 2022 • 03:20pm (Stuff)
"The median house price recorded by large Auckland real estate agency Barfoot & Thompson jumped $230,000 last year, with little sign yet of a market running out of steam." $4000+ a week gain was more like it in the "Rockstar" period....lol
https://www.stuff.co.nz/life-style/homed/real-estate/127437889/auckland…
Was listening to the ZB chat on Unemployed changes , seems somewhat pointless in an environment where theres an expectation of rises (RB looking for higher UE rate while Govt continuing to import labour) maybe the folk at MSD should start taking holiday leave because I suspect their jobs are about to turn mighty stressful. Might be more effective outcomes if they locked in with temping/training agencies and dropped all the sanctions dribble .
In explaining why the gold standard was ditched, the US Fed blames the public for prior bank failings. Reality is that banks irresponsibly created way more claims for gold than they had gold, kept defaulting, and lost trust. So the government made gold illegal to own for like 40 years.
The U.S. was no different. Commercial banks and Federal Reserve banks had a gold reserve requirement. They had to keep reserves of gold in their vaults equal to a fraction of the money they issued.
“For every Federal Reserve dollar that was issued, the Reserve Bank had to have 40 cents worth of gold in its vault downstairs in the basement,” explained St. Louis Fed economist David Wheelock.
And then the Great Depression hit. People hoarded gold instead of depositing it in banks, which created an international gold shortage. Countries around the world basically ran out of supply and were forced off the gold standard.
https://www.stlouisfed.org/open-vault/2017/november/why-us-no-longer-fo…
Out of the blue.
The Japanese Lower House will convene a special session on August 23 to discuss the Bank of Japan’s (BOJ) decision to raise interest rates last month. According to sources, the session is likely to invite BOJ Governor Kazuo Ueda to attend and explain the rate hike.
This development comes after the BOJ surprised markets by increasing its policy rate to a 15-year high on July 31, signaling its readiness to hike borrowing costs further if inflation targets are met. The move has sparked concerns about the impact on Japan’s economy, and the parliament’s special session aims to provide a platform for discussion and scrutiny.
As far as stupid real estate headlines go I always thought that this was pretty toppy
Otahuhu may be the next Ponsonby from 2015 but wait there is more ......
https://www.nzherald.co.nz/business/property-report-otahuhu-may-be-the-…
right here and right now we have
‘Pukevegas’ the one to watch: Why house prices in rural fringe are about to take off
https://www.oneroof.co.nz/news/pukevegas-the-one-to-watch-why-house-pri…
next it will be news of Buffett buying Riverhead
Now, just 35 years later, the suburb is gentrified, the small cottages are worth $1.5 million-plus, there are luxury shops and high-end bars - the rents are some of the most expensive in Auckland.
I was asked where I thought the next Ponsonby would be, the suburb where no one would willingly move but which could one day become the place to be.
Watch those luxury shops and high-end bars as a barometer. We've already lost SPCA. Woke mate said "at least Prego's still kicking."
Having lived in Ponsonby for a decent period, the local bars are mainly frequented by want to be types, they could not survive on local spend alone.
Its popular as its close to work and Westhaven, bit like Mosman in Sydney. For the weekend people have bachs Omaha or Waiheke, or go sailing or boating in the westhaven based yacht/launch...
re Prego, its too popular no one goes there anymore
Yes. SPCA was at its prime when it was debauch. Nothing left except a few cash rich cougars lunching and hopefully an opportunity to eye up the young flesh. The commercial rents will put pressure on retail and hospitality. Boutique service businesses might fare better.
Recent Curia poll asked NZers how they would vote in US elections if they could.
Across all demographics NZers would vote for Harris over Trump. The only outliers who would vote Trump over Harris are:
- ACT voters
- NZFIRST voters
- Rural voters
Says it all, and why NZ citizens are leaving in droves.
The coalition is trying it's hardest to appeal to a right-wing nut community (the type that thinks Trump is great) and doesn't represent the views and desires of most NZers.
Luxon sacrificed the National Party in his desperation to be PM at all costs and made a deal with the devil. They are taking us down a nasty, nasty, well-trodden path to their bedfellows the UK Tory party.
https://www.curia.co.nz/2024/08/us-2024-presidential-election-poll/
But in the last real NZ poll
- Rural voters
- Act voters
- National voters
- NZ First voters
Smashed all other voters and won the last election, now I also agree that the three headed monster is a mess, but the left based Taniwha was defeated.
Until the Left admit why they lost, and address it, they are lost in the wilderness.... at the current pace of acknowledgement, it will be some time.
I also see NAct suffering the safe fate as the Torries, theIr own membership do not want to see the necessary reforms. Willis is totally uninspiring as a Fin Minister, to get he point across she speaks slowly, maybe that's the way her handlers have to bang the narrative into her.
If she is our brains trust here, we are screwed.
Labour here simply mirrors the failings of the supposed ‘left’ all across western liberal democracies over the past 20 years. As I have said before, the failings of the left help explain the emergence of the right wing nut jobs.
Rather than focusing on the core human needs of affordable housing, healthcare and education, the ‘left’ have been diverted by all sorts of minority interests and pet projects. The best example here is the light rail project. There’s a perfectly good and improving (post CRL) urban train service, with all sorts of opportunities for urban development along it. But no, Labour had to reinvent the wheel with it’s tram, something that pandered to ‘legacy egos’ like Twyford
You're just regurgitating the same (mostly unsupported) narratives that sucked in the right wing nuts. It isn't due to a failing of the left that the right wing nut jobs have been voted in, it's down to a concerted comms strategy by anti-moderates around similar anti-woke narratives that aim to divide society and exploit opportunities presented by structural weaknesses in the economic system. The right wing nut jobs are also a threat to the centre right.
For someone who disses almost every single public figure of authority for being weak intellects, I thought you'd have worked that out.
In my opinion ( because it is just opinion) the failing of the left is a big factor, and many more esteemed people than me have argued that. Including a number of very left wing academics.
You do realise that the voter base for people like Trump is overwhelmingly disenfranchised workers?
And in terms of light rail. Auckland Transport had a ready to go surface light rail option. Labour fucked it up monumentally by
- being duped first by the Super proposal which they were not experienced enough to dismiss out of hand and then
- by the ALR leadership who went down an infrastructure heavy gold plated option to try to maximise the costs and then profit come build time, again naivety and lack of experience
There is no doubt they fucked it up. However a surface light rail option is not a vanity project or a pet project, it is still the best solution to the problem of city centre bus capacity constraints.
Tracey Martin summed it up on a rnz program tonight. An arrogrant govt that thinks it knows everything, and listens to no one.
Pretty sad when an ex minister thinks the select committee is a waste of time because they obviously aren't going to listen to anyone, regardless of their expertise.
This was in regard to 7AA , which she pointed out was written by nationals Anne Tolley, and doesn't actually cover the action they are using as justification to repeal it. You can't make this shit up.
I am from the Government, I am here to help
https://www.nzherald.co.nz/business/tourism-at-a-standstill-stop-choppi…
The new fee structure means the cost of a visitor visa will rise by $130 to $341 per person (a 61% increase) – hitting the key markets of China and India – and a working holiday visa will rise by $250 to $670 per person (a 59% increase).
O’Brien said the increases followed a closed consultation process which did not include the aviation sector and was announced late last Friday.
“Given the Government has now raised costs for visitors, students and workers who wish to come to New Zealand, adding more cost in the form of an increased IVL should be taken off the table,” she said.
“We’re not even asking for any extra investment. We’re just asking them to stop chopping it [tourism] off [at] the knees.”
Planned air services for New Zealand for summer 2024 reveals just a 2% increase on summer 2023.
“New Zealand’s tourism recovery has slowed almost to standstill. Yet New Zealand is piling cost on to those same international visitors we claim we want to attract.”
When the visa cost rises were announced, Immigration Minister Erica Stanford said the changes were aimed at the system being self-funded and new charges would raise $563 million for the Government over the next four years.
Tourism and Hospitality Minister Matt Doocey said it was appropriate international visitors contributed towards the costs associated with providing and maintaining the high-quality visitor experiences they have while travelling here.
“I do not anticipate that the overall number of people that choose to visit New Zealand and the amount they spend will change significantly because of the increase.”
Doocey said the majority of international visitors to New Zealand come from visa-waiver countries so aren’t required to apply for a visitor visa.
But O’Brien said a reduction in tourist arrivals will in time reduce air connectivity, which will reduce available cargo space to and from New Zealand.
“We cannot risk turning the stalling tourism market into a formal decline by endlessly increasing costs for those who wish to contribute to New Zealand’s economy. If we do, we will cement a tourism decline which will take years to recover from.”
“Any reduction in international visitors will impact a wide range of New Zealand businesses. Beyond airlines, this means the accommodation sector, tourism experiences, hospitality and others.”
Tourism Industry Aotearoa (TIA) has calculated that significant increases in visa fees and levies for tourism-related categories could lead to a notable drop in visitor numbers, potentially reducing international visitor arrivals by up to 24,500 and risking $120m in visitor expenditure.
International visitors contribute substantially to New Zealand’s economy, generating $7.3 billion in government revenue pre-Covid, including $3.8b in GST. Each visitor contributes an average of $849 to Crown revenue, TIA says.
Working holiday visitors are crucial to New Zealand’s workforce, especially in the tourism industry, with 37% of businesses hiring them over the summer and increased visa costs could deter these essential workers, said TIA chief executive Rebecca Ingram.
“We urge the Government to factor in the broader economic benefits that international visitors bring and our export earnings, rather than focusing solely on making the immigration system self-funding at the expense of our tourism sector.”
NZ Airports Association chief executive Billie Moore said the $341 visitor visa for New Zealand, is 69% more than Australia, a key tourism rival.
“The truth is that visitors will be turned off by paying over $300 just for their visa. Most Kiwis would be too, if they were in their shoes. And visitors have plenty of other choices for their travel, with most of our competitor countries focused on making themselves more attractive, rather than more expensive,” she said.
“We might better understand the Government’s approach if it were complemented by an export growth plan that shows joined up thinking across all government agencies, including on how we might recover this lost demand.”
I thought the coalition government's plan was to weed out the low spending tourists and only focus on the big spending super rich? This seems consistent with that policy approach.
But as with their 'we'll use tolls to pay for our new mega roads' they don't seem to be very good at sums.
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