Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).
MORTGAGE/LOAN RATE CHANGES
BNZ has cut most fixed rates, especially their short 6 months and 1 year fixed rates. Kiwibank has also trimmed some rates. Heartland Bank has cut most of its fixed rates. More here. All rates are here.
TEST RATES FALLING
Many banks are now reducing their mortgage affordability test rates, with Kiwibank as low as 8% now. An industry review is here..
TERM DEPOSIT/SAVINGS RATE CHANGES
Kiwibank has cut term deposit rates (and by more than their home loan rate cuts). TSB has cut TD rates too. All updated rates less than 1 year are here, for 1-5 years, they are here.
A DIFFICULT START
September national REINZ data shows that the housing market had a difficult start to spring with a significant drop in sales volumes. Among the sales that did happen, prices held their own.
'NOT A BOUNCY SPRING'
ANZ's Truckometer monitoring of road transport activity is not giving many encouraging signals. Both the light traffic index, and the heavy traffic index were lower in September than August.
NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. Vista and Tourism Holding share the spotlight. Serko and a2 Milk move lower.
TRACTOR SALES WEAK
September is usually the peak month for tractor sales - and it was again this year. But at 234 new units sold/registered, that is unusually low for a September. In fact you have to go back to 2007, seventeen years ago, to find a weaker September. In most years more than 400 units are sold in September.
EMERGE RAISES $12 MILLION
Fintech Emerge says it has raised $12 million in a second investment round led by Altered Capital. Other investors include Icehouse Ventures, K1W1, NZ Fintech Fund and US VC Hard Yaka. Money raised will be used for marketing, sales, and product hires plus "the ramp up of the start-up’s go-to-market strategy." Emerge founders Jamie Jermain and Jovan Pavlicevic describe the business as "a digital-first banking alternative."
ANOTHER PAYMENTS OPTION ENTERS LOCAL MARKET
British fintech Edbury, one of the world’s fastest-growing global fintechs, has opened an office in Auckland. They specialise in international payments and collections, offer foreign exchange in some 130 currencies, cash management strategy, and foreign exchange risk management for SMEs. Their claim is that they offer "... the sophisticated products and services that banks typically reserve for their biggest clients, accessible to SMEs."
END OF THE LINE
Stats NZ said it will stop producing quarterly property transfer statistics. Property transfer statistics: June 2024 quarter is the final release in the series.
WE TRAIN THEM, THE AUSSIES TO POACH THEM
Australia said it is changing its GP accreditation rules so it can raid doctors specifically from those who who are qualified in Ireland, New Zealand and Britain.
SWAP RATES EASE
Wholesale swap rates are probably a marginally lower today. Our chart below will record the final positions. The 90 day bank bill rate is unchanged at 4.65%. The Australian 10 year bond yield is down -3 bps at 4.28%. The China 10 year bond rate is little-changed at 2.16%. The NZ Government 10 year bond rate is down -5 bps from this time yesterday at 4.48%. And the earlier RBNZ fix was at 4.45% and up an insignificant +1 bps from yesterday. The UST 10yr yield is now at 4.09% and dipping -1 bp bps from yesterday. Their 2yr is still at 3.95%, so that curve is now positive by +14 bps.
EQUITIES MIXED
The NZX50 is now up +0.2% in late Tuesday trade after a turn up in the afternoon. The ASX200 is up +0.8% in afternoon trade. Tokyo is up +1.1% at its Tuesday open. Hong Kong is down another -0.6% at its open. Shanghai started -0.7% lower at its open. Singapore is trading up +0.7% at its open. Wall Street ended ist Monday session up +0.8% on the S&P500.
OIL DOWN
The oil price is down -US$3 from this time yesterday at just under US$71.50/bbl in the US, and just over US$75/bbl for the international Brent price.
CARBON PRICE BACK UP
The carbon price rose marginally today to $62.75/NZU after yesterday's small dip to $62/NZU. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD FIRMISH
In early Asian trade, gold is up +US$3 from this time yesterday, now at US$2649/oz.
NZD HOLDS
The Kiwi dollar is unchanged from this time yesterday at 60.9 USc. Against the Aussie we are still at 90.5 AUc. And against the euro we are still at 55.8 euro cents. This all means the TWI-5 is also unchanged at 69.3 from this time yesterday.
BITCOIN RISES STRONGLY
The bitcoin price is up a strong +5.3% from this time yesterday, now at US$65,874. Volatility of the past 24 hours has been high at just on +/- 3.2%.
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82 Comments
"The China 10 year bond rate is little-changed at 2.16%."
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"China already has more than enough houses, roads, railways, bridges and factories to last a century for a falling population. Beijing is well aware of this and does not want to make the debt burden associated with wasteful investment any worse, lest it kill off productivity as well. After two decades of debt-charged growth, the Chinese economy is painted into a corner....China can only reduce interest rates at the same pace that the US Federal Reserve does, or its currency will collapse..."
https://nz.finance.yahoo.com/news/world-on-edge-as-chinese-yaun-enters-…
Wellington’s City to Sea Bridge to be demolished
https://www.stuff.co.nz/nz-news/350451875/wellingtons-city-sea-bridge-be-demolished
Good to see that this ugly eyesore is going to be demolished however the usual egotistical nonsense from the Wellington council: "the bridge is a unique structure that many Wellingtonian’s care about and enjoy," and "two options for the bridge’s future; either replacing it with a new pedestrian crossing, or a pedestrian crossing with a new, smaller bridge at two different points across Jervois Quay." Someone also thought it a good idea "that $65 million was allocated to investigate options for the bridge and the former Capital E building and basement. This included both remedial strengthening work and demolition.”
There's ALREADY a perfectly useable pedestrian overpass in basic concrete AND a traffic light pedestrian crossing - both less than 100 meters away which have been been there for many years.
Hopefully Central Govt finally step in & stop this vanity project nonsense.
It reported that $65 million was allocated to investigate options for the bridge and the former Capital E building and basement. This included both remedial strengthening work and demolition.
That is an offensively large amount of money to spend on investigations. Someone needs to be stripped of their responsibilities and then summarily sacked for misuse of public funds.
The public purse is now well established as an easy target for pillaging by those with authority but not one iota of responsibility for squandering it on spendthrift projects of neither necessity nor substance.What a load of mealy mouthed piffle “many Wellingtons care about and enjoy.” Where then is the verb use and as well, just quantify “many” and then how many of the many might prefer that the spending be allocated instead to the basic services substantially neglected by the same dreamers.
It costs $8k a step in Auckland
https://www.rnz.co.nz/news/national/527975/auckland-council-spends-263k…
so I imagine $8m each plus a few billion in other expenses
WE TRAIN THEM, THE AUSSIES TO POACH THEM
Are we training them though? More than 40 percent registering with Medical Council NZ each year are trained overseas.
The headline sounds better than "Someone else trains them, we poach them and then the Aussies poaches them from us".
Easy to see why people make the switch. In my technical specialty, the NZ salary scale tops out at about $170k. In New South Wales, the senior scale starts at over $200k and runs to about $260k AUD. Add higher super contributions and other incentives on top of that.
As I'm sure you know, the CPI has a weighted basket of goods. Not everyone lives in Lower Hutt (our rates went up 7% in Auckland), not everyone uses gas (we don't), and not everyone has insurance (a lot of renters may not or only have contents). We all buy food (up only 1.2%) and fuel (down a lot).
Recently my rates in Lower hutt went up 21.8% = Boomer generation consistently voting for lower rates over infrastructure maintenance plus climate change insurance costs plus National Government cutting their share of Local Government running costs (Transport and 3 Waters)
Genesis gas just went up 18.5% = resource depletion = higher costs going forward
my insurance up 20% = Climate Change to cover local weather events and global reinsurance
If I were you I would investigate the difference in price between just house and house and contents. Insuring your contents was half the cost and lets be honest its generally not worth insuring relative to the cost of the house. Potentially you can halve your insurance cost.
Suspect if this story were in Granny, you would see gulps and shudders across the water coolers and REA offices of the nation.
China is enforcing a tax on overseas investment gains for the ultra-rich, targeting individuals with significant offshore assets.
Some wealthy individuals in major Chinese cities were told in recent months to conduct self-assessments or summoned by tax authorities for meetings to evaluate potential payments, including those in arrears from past years, said the people, asking not to be identified discussing a private matter.
The individuals contacted are facing up to 20% levies on investment gains, and some are also subject to penalties on overdue payments, said the people, adding that the final amount is negotiable.
https://www.bloomberg.com/news/articles/2024-10-15/china-moves-to-tax-t…
Jacinda insulated our property market from such capital shocks.
How? This may have been her defining moment--protecting the Ponzi from the tentacles of the CCP--but nobody's aware of it.
If you're wrong, there might be a buck to be made by dobbing in the Chinese-looking people down the road.
Off topic also but owners of Area 41 Italian restaurant in New Plymouth not only charged one migrant worker $16k for a job but also charged him an hourly rate because they said the minimum wage was too high!
$60k fine for basically enslaving people seems to be a very modest punishment indeed.
Considering all this imported labour rorting has the effect of putting downwards pressure on wages (for already low wage industries where - if anything - we need wages to rise) the punishment should be much tougher.
E.g. why are the owners' assets not seized and sold off as proceeds of crime? If the only way your shitehouse restaurant can operate is by running a visa scam shop and garnishing wages, then presumably it's an illegitimate enterprise at the fundamental level.
Welcome to just one of the reasons I've been wanting to slow/stop immigration for 25 years. Really, we have to stop private people selling permanent residence as this will always create the demand.
Skills shortage? Fine, then let them bring in a worker for 12mths by paying a 50k fee to INZ. Still can't train or hire someone who lives here to do the job after 12mths? Fine, pay another 50k to have them stay another 12mths.
I tend to agree with this approach. If you want to 'import a worker' (outside of a very narrow, defined range of skill sets e.g. healthcare) then you need to pay a tax to do so. If the skill shortage is that critical you'll find a way to pay.
Of course this doesn't necessarily fix the problem of migrant exploitation (presumably many devious employers - e.g. your restaurant owners above - would then charge the employee for the tax).
In this case, we need far stricter rules against employers who exploit migrant labour. E.g. deportation if not from NZ, seizure and sale of business and personal assets, forbidden from running companies etc.
To be honest, as much as it sounds like 'victim blaming' there probably also needs to be penalties for those who arrive knowing they will break the rules (with a view to do so for as long as it takes to get PR). E.g. if you're caught doing this, you're also gone from NZ.
Nothings perfect, but it would be a start. We've been thinking we're popular just because we are prepared to give away permanent residence - we're deluded and take for granted what we have.
What really annoys me is so much of the benefits go to recent arrivals that know how the system 'works' running lame education offerings etc (all to just get in the door and work under the table or legally thanks John Key). All the while proper businesses close as they cannot compete - are immigrants really better at running liquor stores, or is store manager on the skills shortage list and therefore worth paying for?
Like the Aussies did with boat people, the boats stopped when they knew they weren't going to be allowed to stay on Aussie soil. This is why permanent residence has to be off the table. Once it is, then the exploitation will stop as employers will no longer be able to hold the threat of losing it over them (we tend to only hear about it once the 'arrangement' has collapsed and the employee is desperate so rolls the dice going to authorities). Still doesn't stop the $50k for marriage deal but at least that's one per 7 years instead of 27 per 3 b/r house...
Why intervene? There seems to be something in the water that makes the locals froth for largesse, incompetence and massive rates increases. Could the average Wellington ratepayer actually survive if they opened a rates bill and it wasn't up by double digits? It's the essence of life up there it seems.
My in-laws are a great example. Both of solid Two Ticks Blue, mid-Canterbury origin. When living in Chch it was unending dinner table talk about the incompetence of the council, the need to avoid rates rises, the need to cut costs, all the usual talkback talking points.
18 months up in Wellington for his and hers new jobs, and you'd think Tory Whanau was the second coming the way they carry on. I think my father in law was more excited at his latest rates bill than he was at his daughter's wedding (then again, she did marry me ...)
I always enjoy my visits for work and pleasure (apart from the awful weather and occasionally wishing I had an AK47 down my trousers when going through the CBD at night, or during the day, or any time these days) but seeing as the current situation is presumably what everybody wants and keeps voting for, why change?
I haven’t followed it much because it seemed like a media beat up, but what are the actual problems? I know the water is leaking, but you couldn’t blame that fully on the current lot as much as you can’t blame the current recession fully on National. And a couple of businesses didn’t like roadworks. Anything else?
I'm pretty sure that you've seen this before...
Remember these when the Wellington City Council claims it had no choice but to increase rates 20%
$593 million on social housing
$400 million for a sludge minimisation facility at Moa Point
$330 million on rebuilding the town hall so we have another music venue
$240 million on Civic Square
$236 million on food recycling
$189 million on Te Matapihi library
$180 million on the Takina convention centre
$160 million on cycleways
$139 million on removing cars and redeveloping the Golden Mile
$55 million to “upgrade” Thorndon Quay
$42 million on renovating St James Theatre
$32 million to Reading Cinemas (attempted but failed)
$13 million on a carpark building
Last time I was there I thought it was losing ground to Auckland having previously been a much better city, so I suspect some investment was needed. I’m sure we have different views on what makes a good city, but at the end of the day it’s the voters who decide. National need a better reason to take over than just because it’s woke.
Wellington is your case study of when woke & green ideology is allowed to run unchecked in a city. From what I can see, it's essentially a "Matriarchy", a sandbox of largely green, liberal women allowed to implement their progressive agendas without attention to the laws of physics, economics and engineering.
Happy to be corrected if I'm wrong but from where I sit, it needs the bat wings to light up the Majestic centre pdq.
The voters there love it. They'd probably vote for 100% of their incomes going on rates before ever conceding that maybe the council needs a rethink. Or they are too apathetic to care, in which case presumably they must be happy enough with the status quo.
Cool city, see it while it's still standing and somewhat habitable I guess?
It seems like a bit of a beat up .
I did some diving into the popular bakery closing ," because of the cycleways".
Well, what a shit location for a bakery. The reason they are suffering is because all their customers have to drive there. in a city where a good portion of the population take public transport , or can walk / cycle to work.
"I did some diving..." ok
it's hard to understand how the business lasted 30 years there /sarc
https://www.nzherald.co.nz/nz/bordeaux-bakery-closing-all-three-of-its-….
When you sack a significant proportion of the workforce, what do you expect?
And no-one is there but there is no parking? Who is taking up the parking? Ghost cars? (And no it isn't cycleways, Wellington tracks parking supply and the overall numbers are not down significantly).
Facts not fantasies.
There's currently still more public servants employed than June 2023 before Labour stacked their acolytes ahead of the election.
https://www.rnz.co.nz/news/national/530400/two-thousand-jobs-lost-from-…
Labour increased the public service by ~18000 / 40% in 6 years - with no significant improvement in services = no reason reducing them should reduce services.
Approx half of Wellington's carparks are being removed & half aren't being used because the council has massively increased the charges
https://www.stuff.co.nz/dominion-post/news/wellington/131564199/call-fo…
https://www.stuff.co.nz/dominion-post/wellington-top-stories/130770186/…
OK let's put aside the workers being sacked as I can't be bothered to argue.
You said there were no parking spaces available. The article you linked said that only 54% were being used. What is it? You can't find parking or you can find oodles of parking but you don't want to pay and expect ratepayers to pay your parking for you instead because ....
And I can't find the source of your claim that 50% of parking spaces in Wellington are being removed (can't open the stuff article). Can you send me the link please? I work in this area and a 50% reduction in car park spaces in the city centre is not even remotely correct.
From the 1st Stuff link I provided above:
"About 1200 on-street parks are being removed as part of a city-wide cycleway rollout, ..."
From the 2nd Stuff link I provided above:
"More than half of the central city’s 3000 on-street car parks are likely to be removed through projects to encourage active transport, including the pedestrianisation of the Golden Mile and the roll-out of the Paneke Pōneke cycleway network."
A suspicion suggests that the rabidly anti car council have a cunning plan; more than doubling the parking charges, added in weekend & overnight charging - resulting in less utilisation thereby enabling them to halve parking while maintaining as much parking income as possible.
Bordeaux was great about 15 years ago, then the food went downhill quite fast and has been getting worse and worse.
You will notice La Cloche, a real French bakery, has not closed. It has locations in similar places, further along Hutt Road in a worse location than Bordeaux with a cycleway outside it... and its absolutely humming. There is another location directly across Featherston St from the empty Bordeaux bakery.
When will they admit they make shit food and the competition is doing far better? They also decided to go on an anti cycleway campaign a few years ago, instead of installing bike racks outside their building. Every cyclist that I know that used to go there for coffees, stopped going and switched mainly to La Cloche who put bike racks outside.
Don't embrace change, alienate your customers, treat your staff like garbage and make worse and worse products - that's a good combination to make any business fail.
Sometimes it takes an outsider outside of the echo chamber to show you how bad things actually are. I sense that many here still think our economy is experiencing a soft landing.
https://www.macrobusiness.com.au/2024/10/deep-rate-cuts-incoming-as-rec…
Yep but that is probably a best case we could all lose a decade here due to China and global factors limiting our bounce back.
You cannot compare with GFC as China did massive QE in sync with the world, now the USA is using the economy as an economic weapon.
It wants a weak China, our biggest trading partner.
In September 1,510,000 Australians were unemployed (9.5% of the workforce, up 0.4%), an increase of 87,000 from August. The increase was driven by more people looking for full-time work, up 31,000 to 583,000, and more people looking for part-time work, up 56,000 to 927,000.
- Overall unemployment and under-employment was virtually unchanged at 18.7% in September:
In addition to the unemployed, a further 1.45 million Australians (9.2% of the workforce) were under-employed, i.e. working part-time but looking for more work, down 43,000 from August. In total 2.96 million Australians (18.7% of the workforce) were either unemployed or under-employed in September.
https://www.roymorgan.com/findings/9698-australian-unemployment-estimat…
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