Category: Business

Source: Radio New Zealand

New Zealand’s minimum wage might have increased substantially over the past five years, but it hasn’t helped lift the wages of the population overall.

As a result, the median wage has drawn significantly closer to the minimum, and commentators say it will take a big productivity boost to boost incomes more generally.

In 2010, when the minimum wage was $12.75 an hour, the median hourly earnings for all workers was $20. At that point, minimum was 64 percent of the median.

Over the following 15 years, the minimum age has risen 84 percent. The median wage has only risen 75 percent and the average 72 percent.

In the past 10 years, the minimum wage has lifted 59.3 percent and median wages 52.9 percent. The average has lifted 50 percent.

That has taken the minimum to 67 percent of the median. The increase in the minimum was particularly noticeable during the period of 2020 to 2023, when it rose sharply and in 2023 was 72 percent of the median.

Infometrics chief forecaster Gareth Kiernan said New Zealand’s minimum wage was high relative to average wages when compared with other countries.

In 2023, it was fifth-highest in the OECD compared to the median wage of fulltime workers.

“I think it’s partly a function of the last Labour government’s belief that by putting up the minimum wage, they could make those people who were at the lower end of the income spectrum better off without necessarily thinking through the process or the logic around what does that actually do to costs?

“And does it end up putting prices up for stuff as well, which, to be fair to them, it’s hard to decompose all of that through the pandemic and all the stuff that’s gone on. So I wouldn’t want to overstate that, but I think it’s a factor in some areas.”

He said the big problem for the country was its poor productivity.

“If you’re not able to sort of grow your productivity and get more output per hour of labour that you’re putting in… then there’s no way that you can lift incomes on a sustained basis, whether that’s at the bottom end of the spectrum or further up as well.

“I think until we do something to address those sort of productivity issues, that overall wage situation that we’re working with here in New Zealand is going to be one of relatively lower wages and stuck with compression down the bottom end.”

Kiernan said New Zealand still had a propensity to export commodities rather than adding value.

“There’s not always an easy fix for that – for example, a big chunk of our forestry exports are logs to China, rather than processed timber or wood products, but that’s because they want to buy logs and do the processing themselves. Plus we lack the scale to do it anywhere near as cost-effectively as China either. And we need to get past the mindset that the best way to grow is to simply add more people, because although that might increase the size of the economic pie, it doesn’t increase the amount of pie that each person ends up getting.”

Victoria University professor and Motu Research senior fellow Arthur Grimes said lifting the minimum wage had not pushed up wages overall. “The reason is wages generally reflect productivity and so pushing up the minimum wage doesn’t change the productivity of the economy. There’s no reason why it should push up wages overall.”

He said the country had previously managed productivity improvements when it shifted from sheep to dairy. “We’ve got to increase the value of what we produce… that could be through technical productivity improvements, including the quantity of things we produce or just producing things that are higher value.”

There had been sharp improvements in that productivity between 1994 and 2019, he said. “We were one of the most successful countries in the Western world at doing that.

“So for 25 years to 1994, we had zero increase in real incomes per person in the country. So 25 years of stagnation. The following 25 years from 1994 to 2019, we had really large increases in real incomes per person…almost the same as Australia.

“So we did really well for that 25 years. From 2019 onwards, we’ve stagnated again, zero growth in real incomes since 2019.”

There were tentative signs things were improving, he said. “But you wouldn’t want to hang your hat on it… The payoff that we had from the reform period in the 80s was huge. You know, it took a while, took 10 years probably to come about. And then that’s basically disappeared now.

“We’ve had five years where nobody’s got any better off, on average as a country, we haven’t got any better off… I presented this to some business people the other day and they were all very ‘so much regulation, so much red tape, so difficult to produce and things like that…it’s not, none of this is a surprise to us’.

“I think you just have to talk to the people in business to sort of work out why is it that they feel the country hasn’t been more able to produce more incomes over the last five years. Because in the end, wages have to rely on productivity, essentially real income increases for the country as a whole.”

Moves to improve the supply of housing had been positive, he said.

Kiernan said Grimes was correct that productivity had gone sideways since 2020 but he was not convinced it had been as strong before 2019 as Grimes suggested.

“Across all the industries, the only ones to show better labour productivity growth for 2008-2024 than 1997-2008 are agriculture, forestry, and fishing; accommodation and food services; professional, scientific, and technical services; administrative and support services; and arts and recreation services.”

Eric Crampton, chief economist at the NZ Initiative, said New Zealand’ s minimum wage was very binding in the number of people affected by it.

“‘Bunching’ is a nearly automatic consequence of a binding minimum wage.”

He said the cost of hiring minimum wage workers could increase substantially if the National party proceeds with its plan to lift KiwiSaver contributions to a combined 12 percent.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Confidence in the New Zealand housing market has risen to its highest level in 15 years, with more people thinking it is a good time to buy.

The latest ASB Housing Confidence Survey indicates 28 percent of respondents believed it was a good time to buy a property, with recent cuts to the Reserve Bank’s official cash rate, dropping to 2.25 percent in November from a peak of 5.5 percent in July 2024.

ASB chief economist Nick Tuffley said the housing market was in a sweet spot, with lower interest rates and an increase in property listings, giving buyers more choice and confidence.

“It’s a good place to be for buyers. It’s very much a buyer’s market,” he said.

“We’re seeing a unique window of opportunity for buyers. Low borrowing costs and high housing supply are creating conditions we haven’t seen in over a decade.”

More than half of the survey respondents (54 percent) expected home loan rates to fall further, compared with 47 percent in the last quarter, with just one in 10 expecting interest rates to rise.

House price expectations remained subdued, with a net 17 percent of respondents expecting prices to rise over the next year as high inventory continued to weigh on the market.

“We expect house prices to lift gradually as the economy recovers, but the days of double-digit growth are behind us. For now, buyers have the advantage – and that’s a rare position in New Zealand’s housing market.”

But Tuffley said conditions were likely to change over 2026.

“I think it’s a case of a mild turnaround in the housing market, more than a dramatic one,” he said.

“There’ll be a greater level of sales turnover. The amount of stock on the market will start to reduce, and prices will start to edge up.”

He said it will be interesting to see how perceptions change in the next survey.

“Because in this last survey, which was in the months August through to October, we saw an increasing number of people expecting mortgage rates to fall over the next 12 months.

“So we’ve now just had the Reserve Bank signal that it thinks it’s done, and that could mean mortgage rates are at the bottom.

“Buyers who have been waiting on the sidelines may find now is the time to act.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Got questions? RNZ has launched a new podcast, ‘No Stupid Questions’, with Susan Edmunds.

We’d love to hear more of your questions about money and the economy. You can send through written questions, like these ones, but even better, you can drop us a voice memo to our email questions@rnz.co.nz.

You can also sign up to RNZ’s new money newsletter, ‘Money with Susan Edmunds’.

I started up a KiwiSaver for my daughter when it first came out. Through the years, I have contributed the minimum amount to gain the annual government top-up. Twelve years ago, my daughter moved to London and she has no future plans to come back to New Zealand. She and her partner are looking to purchase their first home in London. My question is, what happens to her KiwiSaver?

People who are moving to another country permanently can withdraw their money once they’ve been gone a year.

Your daughter can withdraw her contributions, employer contributions, the $1000 kickstart that she probably got when she signed up, the fee subsidies she might have got at the start, and any returns made by the fund.

She can’t take out the government contributions that she’s been getting thanks to the $1042 you’ve been putting in over the years. (Note that until this year, this was only available to people over 18 but is now paid to people aged 16 and up.)

Just wanting to know what happens to my daughter’s super in Australia if she came home to New Zealand and passed away. She lived and worked there for approximately 11 years and passed away four years ago but had been home for five years prior to passing.

I am sorry to hear about your daughter. I asked Ana-Marie Lockyer from Pie Funds about your question.

She said when someone died in Australia, any superannuation savings they had including any life insurance benefits that might be attached to it, would become part of a superannuation death benefit.

“This money can usually be claimed by the next of kin or the estate.

“If your daughter had an Australian super fund, the balance would still be held there unless it became lost or inactive, in which case it may have been transferred to the ATO’s ‘unclaimed super’ register. Either way, it remains claimable.

“The normal process is to contact the super fund (or the ATO if the fund is unknown) and follow their requirements, which often include probate or letters of administration. So the best next step is to contact the ATO or use their online ‘lost super’ search to locate the account and begin the claim process.”

A while back I encountered an issue when I received a reminder that a website (MightyApe) subscription was due. The payment information for my Visa details were expired on the website by nearly a year and I did not wish to continue the subscription so made the assumption the payment would be rejected as the expiry date had past and the CVV was invalid.

I had also noticed MyLotto also didn’t care if the CVV were incorrect when purchasing online tickets …At the time as I wanted a lottery ticket it didn’t alarm me but when I received an email from MightyApe confirming the renewal of the subscription I was confused. The payment information was definitely outdated so how was payment processed?

MightyApe refunded the transaction and suggested they had ‘payment tokens’. Perplexed, I questioned the bank around how did they make customers aware the expiry date displayed on the card was meaningless, that Visa issued “tokens” to merchants so they could override customer payment information to whatever enabled payment.

The bank (ANZ) advised me they were powerless as they were subject to Visa terms and conditions at which point I reminded the bank that to take a direct debit from a customer that consent was required. So how were they actively alerting customers that merchants get tokens that enable money to be taken without clear consent. That a credit card number was enough as CVV and expiry detail became meaningless…because tokens made payments easy for the merchant. Why did banks print expiry information on a card if it held no meaning and if a CVV was able to change and be accepted? How are customers protected? The reply was customers can request refunds and request a new card with a different number, both clearly detached the bank from actually protecting the customer.

I am interested to know what has changed with regards to Visa and banks gaining customer consent for tokens to be issued.

What have banks done to clarify to their customers the risk of merchants not notifying expiry and CVV on credit cards can change without direct consent or tick box when using a credit card online because I know banks are aware they have process for direct debits but not for credit card tokens.

ANZ said when a customer signed up for a subscription, they agreed to create a recurring payment authority.

“This is often called a payment token. It allows the merchant to charge a card on a recurring basis in line with the subscription agreement.

“Visa offers a service to merchants called Visa Account Updater. If the customer’s card expires and is reissued, Visa can automatically update the customer’s card details for any merchants who have a valid recurring payment authority. This means your subscription may continue even if the expiry date printed on your card has passed.

“This is why it’s important for customers to regularly check their bank statements so they can cancel subscriptions they no longer want, or may have forgotten about.”

The ANZ spokesperson said an expiry date did not guarantee that a subscription would be cancelled.

“To ensure a subscription is cancelled you need to cancel it directly with the merchant. CVV is usually only needed when you first save your card. Later subscription charges use the stored token, not CVV.

“If a customer wants to cancel a subscription, they should contact the company directly to end the service and request removal of their card details. If the company doesn’t respond or continues charging, we recommend keeping proof of cancellation attempts – such as emails or screenshots. In certain circumstances we can support customers in disputing charges through a process called a chargeback.”

Visa said its tokenisation technology replaced sensitive card details with a unique, secure token and increased security for consumers and businesses.

“This reduces fraud risk because businesses never need to store raw card data, and tokens cannot be used outside their intended environment – for instance, the token for that consumer at MightyApe will not work anywhere else. The expiry date and CVV fields are only used for the initial authentication of a service. Once a token is in place, transactions rely on the token, not the original card details. There are different ways that card-issuing banks, like ANZ, inform their customers when tokens are in use.

“Visa’s Zero Liability policy ensures cardholders are not held responsible for unauthorised transactions. Customers retain full dispute rights and can request cancellation of tokens or replacement cards at any time. Finally, letting card details lapse does not automatically cancel the underlying commercial agreement and obligations between the cardholder and a business. And not updating card details isn’t suggested as a replacement for formally cancelling subscriptions.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

New Zealand Pork chief executive Brent Kleiss believes the country should be concerned about Spain’s confirmed cases of African swine fever (ASF).

Spain has confirmed two wild boars found dead near Barcelona tested positive for the virus.

Among other countries, the United Kingdom quickly moved to temporarily ban imports from the country.

The Ministry for Primary Industries (MPI) was monitoring the situation in Spain and said New Zealand would not accept any pork from that region of the country.

Kleiss agreed measures like a temporary ban must be put in place.

“I guess the big concern for me is that now, along with Spain, 43 percent of pork coming to New Zealand does come from countries with African swine fever and these temporary bans don’t always stay, even when the ASF does.”

NZ Pork statistics showed Spain was the second-largest contributor to Aotearoa’s pork imports this year, 7211 tonnes until September.

Germany was the highest contributor with 9256 metric tonnes and the US was third with 6168 tonnes.

A total of 38,671 metric tonnes of pork had arrived into the country this , as of September.

Kleiss said the country should be taking other steps to stop the virus spreading here.

“I’d like to see a good review of our settings around allowing imports from countries of things like African swine fever, I think that would be a good step.

“Then things we can do here, keeping an eye out for the signs and symptoms in our animals, changing some of the rules around waste food feeding, and what you can and can’t feed to pigs in New Zealand.

“That would be a likely course of entry for a disease like this and for others, like foot and mouth disease.

“Certainly, some greater traceability of where our backyard pigs are in New Zealand, because we don’t really have too much of a picture of that.”

Biosecurity New Zealand import and export standards director Lisa Winthrop said the country’s measures against swine fever had proven successful in the past.

“Those measures include no live pigs are imported into New Zealand and personal consignments of pork from any country is not allowed.

“Unprocessed [fresh or frozen pork] can only be imported from ASF-free countries, zones or regions.

“Some commercial pork products can be imported into New Zealand, but only if they meet strict import conditions to ensure they are free from ASF, including undergoing a treatment that destroys the virus.”

Winthrop said Biosecurity NZ continually reviewed import conditions for pig products to ensure they were appropriate.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Air New Zealand cancelled multiple flights on Saturday, with all A320 aircraft grounded due to a global software problem.

Airbus said a recent incident involving an A320 family aircraft had revealed intense solar radiation could corrupt data critical to the functioning of flight controls.

The company has ordered an immediate change to a “significant number” of its best-selling A320 jets, which threatened to disrupt half the world’s airlines.

Air NZ chief safety and risk officer Nathan McGraw said “as a precaution” all A320neo aircraft in its fleet would receive a software update before operating their next passenger service.

“This will lead to disruption across a number of our A320neo flights on Saturday and we’re expecting a number of cancellations to services across that fleet.

“We will contact customers directly if their flight is affected. Customers can also check the latest updates on their flight through the Air NZ app or website. We will provide an update when we have more information on the impact to our services on Saturday.”

Airbus A320s were commonly used on Air NZ’s Australia and Pacific Island routes.

In a statement, the plane manufacturer said: “Airbus acknowledges these recommendations will lead to operational disruptions to passengers and customers.

“We apologise for the inconvenience caused and will work closely with operators, while keeping safety as our number one and overriding priority.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

The Warehouse Group’s shareholders have peppered the board and executives with pointed questions and criticism about several years of under-performance at this morning’s annual meeting.

Outgoing chair Dame Joan Withers said the past few years had been difficult for shareholders, but a refreshed executive team had hit the ground running with a sharpened focus on controlling costs and driving growth.

The first quarter of the current year ending in July saw a near 1 percent gain in sales, though group profit margins remained under pressure, dragged down by Red Sheds, while Noel Leeming and Stationery saw some improvement.

Chief executive Mark Stirton said trading conditions were still challenging, though customers were responding to new product ranges, with an increase in foot traffic.

“It is clear to me that our competitive advantage lies in our stores, footprint and in our footfall,” he said.

“We have the highest number of stores of any New Zealand general retailer, with 1.7 million customers walking through our doors every week.

“It is within our gift to show up for these communities and customers better than we have to date.”

The company previously announced it would cut an undisclosed number of jobs in its head office, but not at the front line, where hundreds of jobs were shed in recent years.

Still, the value of its shares had dropped more than 25 percent over the past 52 weeks, with another 1 percent drop as the meeting dragged on.

Dame Joan spent a good part of the meeting acknowledging the failure of the business to deliver profit growth and shareholder value over her tenure.

“We’ve been through the history of what’s happened over the last few years a lot, and analysed what we did,” she said.

“We focused on an ecosystem strategy. We believed that with Amazon going into Australia, there was a massive threat, and we had to have a platform.

“We were told it was existentially important to us. If we’re honest, we took our eye off the ball a little bit in terms of the store environment.”

She said both incoming chair John Journee, who had acted as interim chief executive until Stirton was appointed in May, were focused on getting the fundamentals right.

“As Mark has said, it’s the gross profit margin that remains under pressure, and that we’re addressing, and that we obviously know that we need to improve our bottom line profitability, and we’re totally focused on doing that.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Westpac New Zealand has been penalised $3.64 million by the High Court for breaching lender responsibility rules.

It comes after Commerce Commission action for multiple failures leading to customers not receiving legally required information about their loans, and in some cases, agreed interest rate discounts.

The Commission’s director of credit Sarah Bartlett said it was due to a failure to invest in adequate systems and processes.

The breach was self-reported by Westpac, which agreed to admit the breaches prior to the Commission filing proceedings.

The Commission said it was the biggest pecuniary penalty imposed under the Credit Contracts and Consumer Finance Act (CCCFA) to date.

“The pecuniary penalty sends a strong message not only to Westpac but to the consumer credit industry that continued failings to adequately invest in robust systems and compliance practices will not be tolerated and there are serious consequences for not complying with the Act,” Bartlett said.

In a statement, Westpac said it worked “promptly to close the identified compliance gaps” and it was in final stages of completing remediation for affected customers.

“Westpac co-operated fully with the Commerce Commission’s investigation and we are pleased to have resolved the matter,” a spokesperson said.

Under the CCCFA, lenders must disclose specific key information to borrowers and in some cases, guarantors.

In the judgement, Justice Anderson found Westpac’s failures related to systems that were “set up in a way that was foreseeably deficient”.

“Multiple steps could have been taken to prevent the harm, including changes to the systems, adequate staff training, and mechanisms to identify and respond where disclosure was not provided, and discounts were not applied,” the judgement said.

It said the penalty reflected Westpac remediating up to 11,398 affected borrowers a total of $2.67m.

The conduct also affected more than 3000 guarantors.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Tenants are in the driving seat in the rental market at the moment – but there are still rules about what they can and cannot do when they rent a property.

RNZ reported earlier on the things that still catch landlords out.

Now, here are six things that tenants can’t avoid.

Pay the rent on time

Problems with rent payments are still the bulk of the Tenancy Tribunal’s work. Two-thirds of claims before the tribunal last year related, at least partly, to rent arrears.

Tenants have to continue to pay rent even if they are involved with a dispute with their landlord. You cannot withhold rent because you think the landlord has not kept up their side of the bargain.

In one case the tribunal dealt with in June, a tenant reduced her rent payment and then withheld it completely because she was not able to use her en suite bathroom.

The tribunal said that was not an appropriate response. “The tenant suffered a loss of enjoyment of the tenancy. But along with that loss there was a loss suffered by the landlord, which needs to be acknowledge.

“The tenant reduced her weekly rent payments by $80 for a period, and then simply stopped paying rent while still remaining in possession. Although the landlord did not give evidence of the tenant’s actions regarding rent payments resulting in financial hardship, the tenant was not entitled to unilaterally reduce how much rent she paid, nor to stop paying her rent entirely.”

The tribunal said a reduction in rent would have been an appropriate response for the parties to agree on.

In another case, a tenant racked up $6335 in rent arrears because he withheld rent in lieu of money he claimed the landlords owed him for work done on the property. The tribunal said he was unable to prove he was owed this.

Keep the property reasonably clean and tidy, and leave it that way

The tribunal regularly deals with claims from landlords seeking compensation for clean-up costs incurred after a tenancy is finished.

In one case, an adjudicator said a tenant left a “huge” amount of rubbish – “including household refuse, dog toys and faeces, broken furniture, mattresses, wood, rocks, bedding, and old bath, two large drums, a number of broken plastic and containers and much other rubbish”.

That landlord was awarded $1572 for rubbish removal.

Tenants also have to leave all the items that were supplied with a tenancy.

Let a landlord know about damage or repairs straight away

In a case currently being dealt wiht by the tribunal, landlords are seeking exemplary damage from a tenant who failed to advise them of damage.

There was damage to the bedroom door, holes in walls and French doors – but the tribunal said in that case it was not satisfied there was a breach to justify exemplary damages.

Use the property mainly for residential purposes, not business activities

If tenants are running businesses from their homes, things can get tricky.

In another case, there was a dispute about tenants operating a plant business from a spare bedroom.

The tenants said their property manager had no problem with it as long as the premises were clean and tidy.

The property owner argued he had no knowledge of that agreement and wanted compensation for professional carpet cleaning in the rooms used for cultivating plants.

The tribunal said the landlord’s claim for compensation was withdrawn by the landlord during the hearing when the tenant confirmed that they had professionally cleaned the carpets when they vacated the tenancy.

Not have more than the agreed maximum number of occupants

Tenancy agreements usually specify a maximum number of occupants. The tribunal said going above that could be a problem because it could put a landlord’s insurance in jeopardy.

There could also be health and safety or security concerns.

In one case, a tenant’s partner urinated in a communal pathway in view of a neighbour, approached another elderly neighbour to ask her for cigarettes and meth, and asked another woman whether she wanted company and whether she smoked cannabis.

The tenant had her tenancy terminated on the basis of the anti-social behaviour and because she had breached a term of her tenancy agreement by having him live with her when she was allowed only one occupant.

Make alterations without consent

In a case heard in 2023 for a Halcombe property, tenants who were described as “in many ways excellent” were in dispute with their landlords after they “exceeded their rights and obligations as tenants”, the tribunal said.

It noted that they seemed to have treated the property as their own. They painted the kitchen green, maroon and gold, the master bedroom a couple of shades of blue, removed carpet in the hallway and second bedroom, put beading along the lower part of a bedroom wall and painted it maroon, put a dog door in French doors and painted another room blue, put beading on the lounge walls, painted the laundry multiple colours, installed ponds and erected a carport.

The landlords wanted compensation including $8500 to repaint the property.

The tribunal adjudicator said the tenants needed to pay $2550 for painting, $2754 to replace the carpet and other smaller amounts for carpet cleaning and glass replacement.

In addition, tenants have to leave all the keys with their landlord when they move out, and pay their own bills for things such as power and water.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

New Zealanders generally like to lock in for the cheapest home loan rates on offer.

But some commentators say it could pay off to try something different now.

When the Reserve Bank cut the official cash rate this week, to 2.25 percent, it made it clear that it thinks it is likely that may be as low as the OCR goes this cycle.

Wholesale interest rates lifted a little in response, and some market commentators have already turned their attention to when rates might start to rise again.

Economists at the country’s biggest bank, ANZ, said it was worth borrowers considering whether a longer-term fix might be sensible at present.

Six-month fixes are priced from 4.75 percent, one and two-year at about 4.49 percent, three years from 4.75 percent, and four and five-year terms from 4.99 percent.

ANZ’s economists said it was too soon to say with confidence when rates might start increasing.

“The key point for now is that wholesale rates have stopped falling. Competition is clearly hotting up, with banks offering cash incentives to switch and that will be welcome news to borrowers.

“But when it comes to which term to select, our broad thinking remains as it was a month ago: we believe mortgage rates are likely at or near their lows, and that it is thus worth considering longer terms. With very little separating rates spanning from one to five years, borrowers with differing levels of risk appetite should be able to find a term that satisfies their own cost/certainty trade-off sensitivities.

“Fixing for five years may suit some borrowers, but it may be too long for others, for whom two to three years might be the happy middle ground.”

They said wholesale rates had put a floor under fixed terms. The two-year swap rate was 2.65 percent before the October OCR cut, and then fell to 2.44 percent. It was 2.59 percent before the November decision, and is now back at more than 2.8 percent.

ANZ expected home loan rates to rise gradually through next year.

They calculated that the six-month rate would only work out to be the cheapest option if the one-year rate fell to 4.19 percent over the next six months. “That seems unlikely if the Reserve Bank doesn’t cut the OCR again.

” If we are at the bottom of the cycle, 18-month and two-year look good compared to one-year, and three years isn’t much higher, and rates in that vicinity likely offer a happy middle ground.”

Based on a market average rate of 4.79 percent for three years, they said fixing for a year for 4.49 percent would only be cheaper if it was still possible to fix for two years at 4.94 percent next year, or 18 months at 4.45 percent and then another 18 months at 5.13 percent.

Over two years, fixing for a year now would only be cheaper if the one-year rate remained at 4.49 percent in a year’s time.

David Cunningham, chief executive at Squirrel, said borrowers were not moving to longer fixes yet.

He said the propensity to fix a the cheapest rate possible was strong. When five-year rates were 2.99 percent, more people fixed for that price, “But still the bulk went to 2.25 percent for a year”.

He said interest rates could stay on hold for a year or a year-and-a-half. “It could be a year of nothing happening while wholesale rates bubble up and down.”

Cotality chief property economist Kelvin Davidson said he was starting to think about a longer-term fix. “That experience in 2021 is still sort of fresh in mind…people who fixed for five years in the middle of 2021, they’re still on those rates.

“It’s not necessarily something I will do but it’s definitely worth giving a thought to.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Motorists are being warned to expect 40-minute queues when IKEA opens its first New Zealand store in Auckland next week, along with potential hour-long waits for carparks.

IKEA will open its doors at Sylvia Park on 4 December and Auckland Transport along with NZTA Waka Kotahi are encouraging road users to paln ahead and allow plenty of extra time for their jounreys.

“We expect the opening day, and subsequent weeks or even months to draw big crowds to the Sylvia Park area, and for this to have a substantial effect on the transport network both locally and across Auckland,” Auckland Transport Operations Centre (ATOC) Manager Claire Howard said.

Travel times across the wider Auckland transport network are likely to be “substantially longer” than usual, Howard warns.

Traffic modelling shows that in a “worst-case scenario” there could be 40-minute-plus queues to get off the motorway at Mt Wellington and wait times of up to an hour to get into carparks at IKEA, she said.

“Surrounding streets in Mt Wellington will also be busy, with forecast delays of up to 40 minutes on Mt Wellington Highway in peak traffic.”

ATOC – a joint Auckland Transport and NZTA venture for managign the network in real time – has been working with the retail giant to ensure their traffic management plan minimises the traffic impacta s much as possible. It will be actively managing light signals and diverting traffic where possible as congestion levels increase.

“Like any popular event or destination that attracts a large crowd, it’s going to put pressure on the transport network,” Howard says.

Drivers are encouraged to allow extra time, check route and travel times and travel outside of peak hours if possible.

Congestion is expected to be at its worst during peak hour during the week and on Saturdays between 1 and 4pm – particularly heading northbound from South Auckland toward Mt Wellington.

For IKEA shoppers who aren’t planning on purchasing large furniture, taking the train might be your best bet.

“It’s a 19-minute train ride from Waitematā Station to Sylvia Park Station compared with expected travel times of more than an hour for the same journey by car, especially if you’re just window shopping or able to get your purchases delivered.” Howard says.

Staff will be on the ground at Sylvia Park Station to help direct people to the store who are travelling by train.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand