Hello. I'm Bernard Hickey with the daily briefing from interest.co.nz...
Today, we'll look at the latest signs of a slowing property market and some ominous signals coming out of Auckland in particular.
We'll dig behind Kiwibank's announcement on Friday of a one year term deposit rate at 9%
And finally we'll find out more about a rare thing. A finance company coming out of receivership.

Story 1
Firstly, we start with news on house prices, both in Auckland and nationally.
Firstly the freshest data from the biggest market and the biggest real estate agent in that market. Barfoot and Thompson has reported its sales volumes fell 40% to 600 in January and prices fell 7.5% in January from December.
Barfoot and Thompson are not ready yet to call a crash in the market, but the signs don't look good. Remember Barfoot and Thompson are responsible for handling about 40% of house sales in Auckland and Auckland is the leading indicator for house prices nationally.
Speaking of national house prices, we received the results of the Quoteable Value survey of house prices nationally. It showed house price growth in the three months to January slowed to 8.9% from a year ago. That annual growth rate is down from 10% in the three months to December.
But the ominous sign was in the commentary from Quoteable Value, who see a lot more detail behind each sale. They warned they are starting to see mortgagee sales.
This will be one of those canaries in the mine that show the housing market in trouble. This is one of the key signs of stress in the US market right now, where prices have fallen sharply in the last year.
Story 2
Now some news on the Term deposit front.
Kiwibank has increased its 1 year special term deposit rate to 9% from 8.8%. This ups the ante in its battle with the big four banks for share in the term deposit market. It also makes even more uncomfortable for finance companies trying to attract some money.
This special rate is for a term deposit means interest on the term deposit is paid on maturity. This move official makes Kiwibank the "Best Bank" in this category.
You can find a full comparison of one year term deposit rates is available.
It shows Kiwibank has jumped ahead of its rivals in this particular niche in the market for term deposits that pay out on maturity. ANZ and National's special rate is at 8.75%. BNZ is right out of the market at 7.9%, while ASB is the best of the rest at 8.8%. Westpac has a 15 month special at 8.5% and also offers a 12 month rate at 8.5%.


A move to 9% will also put finance companies under increasing pressure, given that many have their rates sandwiched between 9% and the psychologically key 10% level. That's because many finance companies are reluctant to push their rates over 10% for fear of appearing risky.

As the chart shows, the average rate advantage for Finance companies is around 87 basis points. That's near its lows over the last 5 years and well below the 200 plus basis points it stood at before the bulk of the finance company boom started in 2003 and the bust started in mid-2006.
But finance companies are now starting to realize they will simply have to offer higher rates to get depositers' money.
Hanover Finance increased its main rates on Friday. Hanover lifted its 2 year debenture rate for more than $5,000 to 10.4% from 9.9% and increased its 3 year rate to 10.8% from 9.85%.
Story 3
And now for a piece of rare news. On Friday we had a finance company announce it had clawed its way out of receivership.
The Christchurch based propertyfinance securities announced it had found the cash it needed from shareholders to carry through on a plan to get out of receivership. Propertyfinance securities is listed through its parent on the NZX.
The chief executive of Property Finance Darryl Queen told interest.co.nz the plan is now to run down the book of 1st mortgages on residential and investment properties and pay out the proceeds to debenture holders.
Propertyfinance owes NZ$79.5 million to almost 3,000 investors holding debentures. Queen said propertyfinance aims to pay back $15 milion of the capital in the first year, $15 million in the second year and the rest in the third year.
The interest will compound and be paid out after all the capital has been refunded.
Queen says he expects the first payment will be made to investors midway through next week.
A rare occurrence, although others, including Geneva Finance are hoping they can dig themselves out too.
I'm Bernard Hickey from interest.co.nz with the Daily Briefing. Catch you on Monday.