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Australia plays catch-up to NZ on credit reporting

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News earlier this month that the Australian government will make it compulsory for the larger banks to share how their customers are performing with the credit reference agencies comes as no surprise to industry experts, given that so few of them have voluntarily done so.

Positive Credit Reporting was introduced in Australia in March 2014, almost two years after it was introduced in New Zealand, but unlike New Zealand’s banks, who are reported to be sharing approximately half of all available consumer loan data, the Australians are currently sharing less than 2%.

What is Positive Credit Reporting?

Prior to April 2012, credit reports in New Zealand were very light on information compared to those .....

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30 Nov 2017 by Barry Stamp Credit Reports
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Unintended consequences of NZ ban on foreign home buyers

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On the face of it, Jacinda Arden’s announcement that overseas buyers will no longer be permitted to buy homes in NZ seems to hit the spot in terms of tackling the problem of soaring house prices. The underlying cause of house price inflation is high demand from buyers from China, the US and Australia, which in turn is claimed to have denied NZ citizens from home ownership.

But let’s look at the facts in closer detail. Currently only 3% of residential property sales are made to overseas buyers. It is hard to see how demand from such a small proportion could have driven up prices by 10.4% in the year to June 2017.

Nor can this be the reason why the proportion of Kiwis owning their own homes has halved from 50% in 1991 to 25 .....

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26 Oct 2017 by Barry Stamp Personal Finance
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PRICES RISE BY 0.2% IN SEPTEMBER QUARTER

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According to Statistics New Zealand, the consumer price index (CPI) inflation rate was 0.2% in the quarter leading up to September 2016, following on from a 0.4% rise in the corresponding June quarter. The CPI measures the rate of price change of goods and services purchased by New Zealand households.

However, not all industry sectors exhibited a uniform rise. Housing and utility prices increased by 1.1% in the quarter leading up to September 2016 with the rising cost of new housing and local authority rates having a considerable influence.

Conversely, transport prices reduced by 3.0%, representing the largest downward contribution for the latest quarter. In addition to the reducing cost of both new and used cars, petrol pric .....

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31 Oct 2016 by Tom Magor Economy
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Card retail spending sees biggest increase in over a decade

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Retail spending on credit and debit cards saw a 1.9% increase in September, according to figures provided by Statistics New Zealand, the highest month-on-month increase since May 2006 – this comes on the back of a 1.2% drop in August. The 1.9% beats the 0.8% increase predicted for that month.

When compared to September 2015, sales increased by 6.1% to $4.7billion, the largest increase coming from the hospitality industry – this was up 16%. Statistics NZ put the increase down to an influx of tourists around this time of year fuelled by the start of the summer season.

Neil Kelly from Statistics NZ explains that “The hospitality spending increase coincides with an increasing number of international visitors to New Zealand” – thi .....

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20 Oct 2016 by Ben Tumilty Personal Finance
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Ratings Agency downgrades seven NZ banks

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One of the biggest global rating agencies, Standard & Poor’s, has lowered the stand-alone credit ratings of seven NZ financial institutions, including each of the big four banks.

The agency says that it believes that NZ financial institutions ‘face increased risks stemming largely from rising house prices in Auckland……accentuated by the structural external weakness in the New Zealand economy’.

ANZ, Bank of New Zealand and Westpac NZ each has had its stand-alone credit rating reduced from a- to bbb+. The smaller ASB has had its cut from a- to a. Ostensibly, in the view of Standard & Poor’s, ASB has a capital and earnings than its larger rivals.

The stand-alone rating is given by Standard & Poor’s as a measure of the i .....

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25 Aug 2016 by Barry Stamp Banking
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