On hold for a change of Government
Phone is off the hook for Labour as election year starts; Housing market settling in to wait for National to win; Standoff extends as sellers hope to outwait buyers; BoJ refuses to blink & stays loose
TLDR: Waits to sell homes have blown out to mid-lockdown levels and the number of houses waiting to be sold has risen 53% in the last year. Most sellers are not under pressure and are now content to wait out the buyers and bet on a National victory later this year to turn around sentiment in the housing market.
That means those sales that are happening are more likely to be ‘distressed’ ones from relationship breakdowns and deceased estates, which in turn exaggerates the scale of the continued falls in reported house price sales.
REINZ data out yesterday for December showed the fall in house prices nationally from the peak in November 2021 has extended to 15% and remains on track for a 20-25% peak-to-trough fall. Deflation at the bleeding edge markets in Auckland and Lower Hutt is slowing, while deflation in other provincial cities with limited expansions in housing supply, such as New Plymouth, Invercargill and Queenstown, remains below 10% for the year.
I include more detail and analysis on the REINZ data and retail sales figures yesterday for paying subscribers below the paywall fold and in the podcast above.
Elsewhere in the news this morning:
PM Jacinda Ardern and Opposition Leader Christopher Luxon will make their first comments of this election year later today in Napier, where both the Labour and National caucuses are holding their respective ‘summer retreat’ strategy sessions;
they could both shake up their front benches and there’s an expectation Ardern will announce an election date and a clearing of the decks of big policies in the next week or two;
the Bank of Japan surprised markets overnight by refusing to blink in its battle with traders expecting a loosening of monetary policy; and,
Figures out this morning showed US retail sales were weaker than expected in December and US producer price inflation fell, which bolstered market expectations the US Federal Reserve will have to ease off its rate hikes when it next decides on February 1, which drove wholesale interest rates lower.
A standoff develops in the housing market
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