Balance sheet recession lengthening

The new forecasts imply house prices won’t recover to their previous peaks until 2030, suggesting a near-decade gap between peaks and extending what is in effect a Japanese-style balance sheet recession. Photo: Lynn Grieveson / The Kākā

Briefly in the news from Aotearoa’s political economy around housing, poverty and climate on Wednesday, June 25:

1. BNZ & ANZ economists lowered their house price inflation forecasts for 2025 and beyond yesterday, extending the ‘fallow’ period of house prices being below their peaks to as long as a decade, much longer than the 2008-2010 balance sheet recession. See more in The Lead below the paywall fold.

2. Seek reports this morning job advertisements fell 2% in May from April, extending the fall from a year ago to 8%. The slide after two months of growth, is consistent with other leading indicators that the economy hit a brick wall in the middle of the year, with consumers and businesses keeping their wallets shut, thanks in part to the wealth effect for home owners of an extended ‘balance sheet recession’. See more in The Sidebar below.

3. Prominent Demographer Paul Spoonley has joined those protesting against the end of the Census. See more in Quote of the day below.

4. Fuel companies will soon be required to have 28 days supply of diesel stored in case of disruptions to refined fuel from Asian refineries, which are overwhelmingly supplied from the Persian Gulf. See more in Number of the day below.

5. Reserve Bank credit card spending figures published yesterday showed spending per capita is stuck back at levels last seen in 2012. See more in Chart of the day below.

6. Today’s Must-Read is from Jonathan Milne via Newsroom on Kainga Ora’s defenestration. See more in Picks ‘n’ Mixes below.

There’s more detail and analysis for paying subscribers below the fold and in the podcast above. If we get over 100 likes I will open it up in full for public reading, listening and sharing.

The Lead: A decade-long balance sheet recession