I spoke to Core Logic Head of Research Nick Goodall & REINZ CEO Jen Baird last night after the RBNZ cut the OCR 50 bps cut & projected another 75 bps of cuts, plus REINZ's January figures
Very interesting charts showing the economy was stabilising and turning a corner before the new government came in. I wonder when NZ business and the party of business will learn the lesson that you can't cut your way to growth
Unemployment 😭 forecast for higher and longer. That will please the coalition. I wonder if unemployed people use the hospital health system more than employed people? They can't afford going to doctor or get prescriptions.
So, great news for rich landlord investors, banks or should I say mortgage lenders because that's all they are these days, and realtors.
Meanwhile in the real world, cost of living is still rising way more than wages. Unemployment is higher helping to keep wages down. Investment in infrastructure, the one way of getting growth in the economy is stagnating or cancelled. And what is the response from the government? WE know best and the policies that failed 40, 30 and 20 years ago are the way to go today!
Is it little wonder young people are voting with their feet and leaving?
Our local Dunedin hospital is desperate to recruit new consultants as the current ones age, leave or retire. BUT, NZ's wages are so much lower than elsewhere and the negative way this government is treating health in NZ, the recruiters are failing to attract even inquiries, never mind actual interviews from people overseas who have the right qualifications and experieance.
The governments response? Blah, blah, blah - its not our problem etc etc.
The one thing which will limit large landlord investors is the debt-to-income restrictions. We've noted the increase in activity from investors over the last year has mostly been small timers.
I am sensing a high level of cognitive dissonance in New Zealand re: what normal now means. The high level of uncertainty noted by the RBNZ is the main takeaway here.
Thank you Bernard, and to your guest contributors.
The Problems that have affected standards of living over the last half century can be related to the rapid escalation of the land component of housing, relative to occupier incomes.
Building new houses and their connections to Water sewage and roads, at least contribute to GDP.
Land price escalation is essentially a payment for transferring ownership, and makes no contribution to GDP.
The RBNZ decline in Interest rates in response to Covid-19 resulted in a huge spike in property price as your graph so elegantly illustrates. In 1969 when we bought our first family home we borrowed from an Insurance company, rather than a bank, because the banks were not then allowed to borrow short and lend long. Max loan 3 times male income and ability to service loan on max of one third of income!
Very interesting charts showing the economy was stabilising and turning a corner before the new government came in. I wonder when NZ business and the party of business will learn the lesson that you can't cut your way to growth
Unemployment 😭 forecast for higher and longer. That will please the coalition. I wonder if unemployed people use the hospital health system more than employed people? They can't afford going to doctor or get prescriptions.
Ah, but an unemployed person has the spare time to spend waiting at ED with their slower speed.
So, great news for rich landlord investors, banks or should I say mortgage lenders because that's all they are these days, and realtors.
Meanwhile in the real world, cost of living is still rising way more than wages. Unemployment is higher helping to keep wages down. Investment in infrastructure, the one way of getting growth in the economy is stagnating or cancelled. And what is the response from the government? WE know best and the policies that failed 40, 30 and 20 years ago are the way to go today!
Is it little wonder young people are voting with their feet and leaving?
Our local Dunedin hospital is desperate to recruit new consultants as the current ones age, leave or retire. BUT, NZ's wages are so much lower than elsewhere and the negative way this government is treating health in NZ, the recruiters are failing to attract even inquiries, never mind actual interviews from people overseas who have the right qualifications and experieance.
The governments response? Blah, blah, blah - its not our problem etc etc.
The one thing which will limit large landlord investors is the debt-to-income restrictions. We've noted the increase in activity from investors over the last year has mostly been small timers.
Will these restrictions apply to overseas investors?
I wouldn't expect so as these are NZ banking restrictions.
Yup, that's what I thought.
Looking at the charts a less diplomatic interpretation of the cuts projected by the RBNZ is that they see an economy in trouble.
It's probably time to sack the board and replace the Governor so that they say the prescribed message.
I was surprised at the comments about low unemployment. I wonder if this takes into account the kiwis who are fleeing the country.
The various notifications and the tech worked perfectly for the pop-up. Thanks for persevering Bernard!
I am sensing a high level of cognitive dissonance in New Zealand re: what normal now means. The high level of uncertainty noted by the RBNZ is the main takeaway here.
Thank you Bernard, and to your guest contributors.
The Problems that have affected standards of living over the last half century can be related to the rapid escalation of the land component of housing, relative to occupier incomes.
Building new houses and their connections to Water sewage and roads, at least contribute to GDP.
Land price escalation is essentially a payment for transferring ownership, and makes no contribution to GDP.
The RBNZ decline in Interest rates in response to Covid-19 resulted in a huge spike in property price as your graph so elegantly illustrates. In 1969 when we bought our first family home we borrowed from an Insurance company, rather than a bank, because the banks were not then allowed to borrow short and lend long. Max loan 3 times male income and ability to service loan on max of one third of income!