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
Nelson Building Society (NBS) trimmed its fixed rates today. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
BNZ cuts some key TD rates but only to levels already held by their rivals. TSB cut short rates too. All updated rates less than 1 year are here, for 1-5 years, they are here.
'A SOMBER RETURN TO REALITY'
Consumer confidence fell in October amid job security fears against the backdrop of interest rate cut flow through lag, the ANZ Roy Morgan survey says.
FHBs IN HOUSING MARKET WIDELY & IN DEPTH
It's steady as she goes for first home buyers as the market heads towards summer. Latest figures suggest about 5000 people a month are moving into a home of their own for the first time.
WHERE WE LIVE
StatsNZ released subnational population projections as at June 2024 today. They may not be quite as useful as usual because they are still based on the 2018 Census. But they do reveal that the locale with the youngest population is Otahuhu/Mangere in Auckland with a median age of 30.8 years. The oldest cohort is in the Coromandel where the median age is 55. More generally by region, the youngest area is Auckland where the median age is 36.1 years and the oldest is shared by Tasman, and the West Coast at 47 years. (Wellington is 38.0, Canterbury is 38.9.) The only locale that recorded a population decline was Waiheke Island (probably because the number of holiday houses is swelling). This data based on the 2023 Census won't be released until mid-2025.
NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. More losers than gainers today but the NZX50 is little-changed. Scales & Mainfreight up, a2Milk & Tower down.
FEWER ON JOBSEEKER BENEFITS
The number of work-ready people on JobSeeker benefits fell by -531 last week from the prior week, but up +10,700 from the same week a year ago. (The difference peaked at +15,350 in mid-July.)
WITHDRAWAL RATE STAYS VERY LOW
Over 7,500 people made early KiwiSaver withdrawals in September, tapping into over $176 mln for home ownership and financial hardship reasons. There are 3,368,000 KiwiSaver members now, up +47,000 from a year ago. Contribution were $10.6 bln in the past year. So the proportion of members making early withdrawals was 0.2%. And they took out 1.7% in total of one year's contributions. The average rate over the past ten years is also 1.7%.
SWAP RATES DIP
Wholesale swap rates are probably lower at the shorter end. Our chart below will record the final positions. The 90 day bank bill rate is unchanged at 4.56%. The Australian 10 year bond yield is down -5 bps at 4.46%. The China 10 year bond rate is up +1 bp at 2.16%. The NZ Government 10 year bond rate is down -8 bps from yesterday at 4.49% while the earlier RBNZ fix was at 4.47% and down -4 bps from yesterday. The UST 10yr yield is now at 4.20% and down -3 bps from yesterday. Their 2yr is up at 4.07%, so that curve is now positive by only +13 bps.
EQUITIES MIXED & MINOR
The NZX50 is now up +0.1% in late Friday trade in very quiet trade. The ASX200 is up +0.3% in afternoon trade. Tokyo is down -0.9% at its Friday open. Hong Kong is up +0.6% at its open. Shanghai started up a minor +0.1% at its open. Singapore is trading down -0.3%. Wall Street was up +0.2% on the S&P500 in their Thursday trade.
OIL LOWER
The oil price is down -US$1 from this time yesterday at just on US$70.50/bbl in the US, and just on US$74.50/bbl for the international Brent price.
CARBON PRICE HOLDS
The carbon price marginally firmer today at $62.80/NZU. There has been normal volumes traded. 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$6 from this time yesterday, now at US$2728/oz.
NZD DIPS
The Kiwi dollar is down -10 bps from this time yesterday, now at 60 USc. Against the Aussie we are unchanged again at 90.5 AUc. And against the euro we are down -30 bps at 55.5 euro cents. This all means the TWI-5 is down to 68.7.
BITCOIN UP
The bitcoin price is up +1.1% from this time yesterday, now at US$67,910. Volatility of the past 24 hours has been modest at just on +/- 1.6%.
Daily exchange rates
Select chart tabs
Daily swap rates
Select chart tabs
This soil moisture chart is animated here.
Keep abreast of upcoming events by following our Economic Calendar here ».
46 Comments
And that ~$141 million of Kiwisaver withdrawals by FHBers. Do we understand where that went? Comfortingly, into providing a home for fellow New Zealanders. But realistically, into the prices of those same homes. Because without the ability to withdraw 'new money', no sales in many cases would have gone through at the prices they did. And those buyers would have had to postpone their purchase until the prices came down to an affordable level, without pillaging their Kiwisaver savings.
The UK PM?
"Landlords and shareholders face tax hikes after Starmer suggests they are not working people. PM says those who earn extra income from property and investments are not covered by Labour manifesto pledge"
https://www.telegraph.co.uk/politics/2024/10/24/landlords-and-sharehold…
Came across only recently Margaret Thatcher’s response to a question as to what she considered as being the most productive result of her Prime Ministership. Her answer “Tony Blair.” That connection, in terms of the relativity nowadays between the Conservative and Labour parties, sort of strikes me as being similar to the rest room in a largish restaurant in Paris as experienced in the eighties, where the door for “La Dame” & the door for “L’Homme” led to the same amenity.
Someone - can't remember who but remember it wasn't quite in character - put this up recently;
Honest Government Ad | How to rig elections
Says it all
Sure is. And one getting poorer by the day.
Kiwisaver was supposed to progressively take pressure off the Aged Pension Entitlement over the coming years, so that future taxpayers wouldn't have to cover the costs of those who reached retirement age without means of support. But the more that Kiwisaver is diminished today, the more the cost will be in the future.
Utter madness that we've allowed this loophole for FHBers. But that's what political expediency does, I guess.
Well said MH. BW doesn't seem to understand that it's simply a transfer of money from one asset class being KS, to another asset class being your own home. It could be argued that your money provides you with more enjoyment being invested in your own home than in KS.
I understand alright. It's what my step-daughter was panicked into doing in January 2022. Do you know how much of her Kiwisaver contribution would be left if she sells up today? (And she has to - Job etc) About minus $20k. Now, that may not sound like much. But add that to the Kiwisaver amount that's evaporated in its entirety and plus that $20k more, and it does add up in more ways than just the $ amount. It breaks up relationships as well.
And, as you'll have guessed. I reckon if she takes her loss now - if she can find a buyer - she'll be better off than waiting util this lot shakes itself out.
Have you had to have a conversation with a young woman in her 30's; besides herself in tears, who after 4 years hard slog at Victoria Uni, to get a job, has seen her entire savings base and future retirement fund obliterated though no fault of her own except to listen to so called experts and vested interests? Perhaps you have. I which case you too will understand.
House price inflation is not linear. You have to contend with paying commission which is not insignificant. Selling so quickly is usually because of changed circumstances and there is often some urgency. Those that did make money doing this were able to pick and choose the time and likely would have been in a position to hold if the market conditions were adverse.
Housing is not like buying a dress. It is an investment in a physical asset that requires a lot of due diligence, legal contracts for insurance, ownership & breakups and constant upkeep and maintenance. I can only fault the OP for not informing their children of this ahead of time so they feel so shellshocked and surprised that gee whizz investments don't always go up all the time. There is sympathy for true life events but for someones own ignorance and willful blindness to the most common and oldest form of investment in the world I have zero sympathy. If they could not work out enough that it was a predictable outcome they should not be managing investment in the first place and really need some basic education courses including counseling to learn how to process predictable outcomes more without the emotional blackmail of parents.
The recent boom period when large numbers of immigrants purchased houses skewed things a bit. Yes you could make money in only a year or two for a short time, but now, things have returned to normal, where housing is a long term investment. To be a bit clearer, I should have written historically instead of generally.
BW - I feel for her, and for all those who swallowed the b---sh-t.
And in my angrier moments, I curse some adjectival-spouting types not far from here... for essentially not telling those folk the truth.
But forgive them, for they know not what they do...
There will be a cascade of such woe, from here on in. The future bets increased exponentially (including kiwisaver and housing numbers) and the remaining planet was being depleted exponentially. Only one way those graphs cross: acutely. And, as you point out, there is real human misery involved - while the perpetrators (the last couple of syllables should perhaps be differently spelt - this government is not far short of treason, vis-a-vis all future Kiwis) swan around blandly claiming they're wealthy, or throwing mud at innocent public servants so as to obscure their own guilt.
I feel for the young; they were told a lie (and yes, it's about time we used the word). The sad thing is that the skills they will need in the future, are further and further from the 'skills' they have been encouraged to acquire. Swiping screens doesn't produce food - or indeed, anything.
She won't looking at the stats. NZ at 1.53 is at the point of no return. Kiwisaver will be nationalised to cover for the lack of workers/children. It is laughable how people still rabbit on about runaway CO2 and infinite growth when there are no children to consume, or pay for pensions.
"If you look at the international data and you look at countries who have slipped below [a fertility rate of] 1.5 — places like Italy, South Korea, Japan — and in those countries you do start to have this demographic time bomb starting to go off," he said.
https://www.abc.net.au/news/2024-10-17/australia-birth-rate-hits-rock-b…
50% of global GDP comes from a tiny area - all with birth rates below 1.6.
https://x.com/Locati0ns/status/1847872653387829542
bw, I think your daughter gets her stressed panicky side from you. Calm down, get her to talk to mum maybe if she has a more level outlook in life. Yes, today her financial situation is not looking good, that's no reason to panic or even stress. She didn't buy her house to sell two years later did she? She needs to talk to someone calm with a level head, who can explain her that she bought the house for the long term, and what it is worth today doesn't matter the slightest for what it will be worth in 5, 10 , 20 years. In 20 years, when her house will be worth 2 - 4 times what she paid for it, she will laugh at how silly she was to stress, if she can remember this time at all. All will be fine BW, relax.
PS, you said she made a panicked decision to buy in January 2022, make sure she doesn't make another panicked decision to sell today, to lock in her losses. Good luck to her, she'll be fine is she ignores the short term value fluctuations.
This emotional blackmail if not diverted & addressed early can turn into really nasty elder abuse behaviours very quickly. Housing is not like buying a dress (which I suspect she puts more thought into). For someones own ignorance and willful blindness to the most common and oldest form of investment in the world (which carries huge amounts of due diligence needed & legal contracts) I have zero sympathy. If they could not work out enough that it was a predictable outcome they should not be managing investment in the first place and really need some basic education courses including counseling to learn how to process predictable outcomes more without the emotional blackmail of parents.
Here are some tips, get her an adequate counseling support, and financial advisor, & property management. Help her learn by watching some basic mathematics and investment documentaries with her. After all expecting adults to be taking remedial maths on their own steam is often a lost cause and many do not even have the capability to understand probability, basic investment principles. So spending time with them watching docos is a light way to help bridge the education and knowledge gaps. Even having a dinner with some reality housing malarky running in the background helps with the common knowledge we would expect of anyone regarding housing investments. Who knows maybe after watching many people make bad calls and throw money away (in which selling is her astounding bad one & not having clear investment plan so they did not bet the lot on a single roll of the dice) might make her feel less alone in it.
What it does show is if it was not housing she would drain all her savings in one go for any other investment with no due diligence. She is the perfect mark for scammers so the more you can help with education and correcting the over the top emotional issues the better.
And would you have been able to buy if you hadn't raided your Kiwisaver? Many wouldn't be able to. And if you are one, then wouldn't you have preferred to wait until prices came within your ex-Kiwisaver range? Say they fell by $75k (or whatever) so your entry price was less?
And guess what? That's still on the cards.
The number on Jobseeker Benefits fell by -531 last week from the prior week, but up +10,700 from the same week a year ago.
While this is always welcome news, the sad reality is like with the previous two years, post the present small dip, in mid November the graph shows the jobseeker numbers will probably resume heading north once again - here
Watch those weekly jobseeker work ready numbers David.
Seasonal variation means that we typically see week-on-week reductions in work ready numbers from February to April and again from September to late-November. Remember we have a circa 100,000 difference in jobs between the seasonal peak and trough (about 5%).
Also worth noting that jobseeker health and disability claims are going gangbusters.
It is obviously fun to compare the latest numbers to previous budget forecasts and the Govt's 2030 target.
I can't wait for a Steve Braunius to do a piece on Simeon Brown
or has he?
The Secret Diary of .. the Battle of Wellington - Newsroom
Nobody told us we were going to get a small-minded zealot in charge of so much that is future-important? Worse, I hear some in Cabinet laud him?
Sheeshh
https://www.oneroof.co.nz/news/auckland-villa-bought-for-21-000-sells-f…
"Grey Lynn Villa sells for 700k under CV" would have been a more accurate title.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.