TLDR & TLDL: The Reserve Bank’s Funding for Lending (FLP) programme of offering banks big loans of freshly printed money at 0.25% looks to be doing some good by being funnelled into low-mortgage-rate new builds, rather than existing property.
ASB began the shift earlier this month with a 1.79% ‘Back my Build’ floating mortgage rate offer that was funded by the RBNZ’s FLP loans. Now ANZ has trumped it with a 1.68% floating mortgage rate offer for new builds, including a $3,000 cash-back for first home buyers. (Interest) By the way, here’s the piece I wrote in August last year predicting the FLP programme could push rates down towards 1.5%.
Elsewhere in our political economy, the travel bubble with Australia is now completely suspended for the foreseeble future as Sydney struggles to contain its Bondi Junction outbreak of the delta variant of Covid-19. New South Wales reported 30 new cases yesterday and extended its lockdown to much of the rest of Sydney and the coastal areas. Its community outbreak is now up to 112 with no end in site.
It also seems to be spreading to other parts of Australia. New community-spread cases were reported in Darwin (4), Perth (1) and Queensland (3) overnight. (ABC Australia) Meanwhile, Wellington’s level two restrictions were extended for two more days until the end of Tuesday and it’s reported pre-departure testing will be needed for the Trans-Tasman bubble when it resumes. (Stuff)
Coming up this week, I’ll be keeping a close eye out for Three Waters’ announcements of the detail of how assets and costs might be carved up. More detail is expected on Wednesday. But councils are increasingly grumpy with the delays and a Department of Internal Affairs advertising campaign that appears remarkably heavy-handed with its warnings about water quality and costs if councils don’t sign up. (Stuff)
Also, I’ll be watching out for the results of the Zespri farmers vote on whether Zespri should partner with growers in China to market the SunGold fruit where the IP was effectively stolen from NZ. Results are due in the middle of the week. Here’s a backgrounder from the Guardian Australia and one from RNZ’s The Detail.
We’re also expecting Treasury to release a draft of our latest four-yearly Long Term Fiscal Report later this week. I’ll be watching out for US jobs data on Friday night and European inflation data on Wednesday for new clues on the global inflation and interest rate front.
Signs o’ the times news
Useful longer reads
Threads worth unravelling
Some fun things
Dawn chorus: ANZ's 1.68% mortgage rate