Westpac Weekly Commentary 16.05.2016
On the sidelines
Last week’s Financial Stability Report put the run-up in debt (both households and dairy sectors) firmly front and centre. While no new lending restrictions were announced, the RBNZ is clearly mulling over its options. That’s no surprise given rampant credit growth and ongoing broad-based strength in the housing market. We think the RBNZ will feel compelled to leave the sidelines and impose further lending restrictions on banks before the year is out. Read more.…
Mortgage wars: Banks prune interest rates
Sharper offers reflect expectations OCR will stay put this year, say economists.
Banks have started cutting interest rates as the busy house-hunting season heats up.
From today, mortgage holders and prospective home buyers with at least 20 per cent deposit are being offered a three-year fixed home loan rate of 5.59 per cent at BNZ, down from the bank’s previous three-year rate of 5.99 per cent. Kiwibank also cut its two-year rate by 20 basis points to 5.55 per cent. According to industry experts, consumers should expect better deals from other major banks soon.
The lower rates could cut years off some mortgages, saving homeowners thousands of dollars in interest repayments.
BNZ Weekly Overview – Tony Alexander
This will be the last Weekly Overview for 2014.
The next one will appear in late-January. Merry Christmas everyone and have a Happy New Year.
The biggest piece of news in the field of economics this week was the 321,000 rise in employment in the
United States during November. This strong gain was well above expectations of a 220,000 rise and
means jobs growth for the whole year could end up being the best in 13 years. There were also signs of
good improvement in hours worked and wages and this means it is reasonable to have an outlook for good
growth in consumer spending in the coming year and on the back of that enhanced willingness of
businesses to undertake investment – and hire even more people.