The year is ending with plunging confidence, which is broadly through the community.
The Westpac McDermott Miller survey indicates consumer confidence has fallen sharply heading into the holiday season, dropping to its lowest level on record. (Update: The ANZ-Roy Morgan survey is now out and also records a record low in consumer sentiment. The chart below is now updated with their result too.)
They say mounting financial pressures are the major concern that is worrying households. Living costs have been skyrocketing. We’ve also seen sharp increases in borrowing costs.
The weakness in consumer confidence is weighing on household spending appetites, reinforcing expectations for a slowdown in overall economic growth.
A striking feature of this quarter’s survey is how widespread the drop in confidence has been. Confidence has now fallen to low levels across all age groups and income brackets. That highlights just how widespread the headwinds buffeting the economy are. Every household across the country is feeling the pinch from the large increases in the cost of living. And for those households with mortgages, those financial pressures are likely to be even more of a worry.
We are awaiting the similar ANZ-Roy Morgan consumer confidence survey due Wednesday. (Now updated). That one has been signaling a downside recently, but their November levels weren't all-time lows like today's Westpac one.
Separately, farmers are being squeezed by rising interest rates, with debt or other financial concerns eroding mental wellbeing, the latest Federated Farmers Banking Survey shows.
Farmer satisfaction with their bank relationship continues to slip. Although just on 60% of farmers said they were very satisfied or satisfied with their bank relationship, this was down 5 points from the survey six months earlier, and is the lowest since the biannual surveys began in 2015.
Tomorrow's business sentiment survey from ANZ isn't likely to show any uptick either. (Update: It didn't. see this.)
Consumer confidence
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65 Comments
You are not going to like this Brocky;
https://www.dailymail.co.uk/news/article-11551835/Channel-10-boss-tells…
Newmarket Business Association head , Mark Knoff-Thomas , says the tills of retail shops in Newmarket were clinking busily all weekend with Christmas shoppers ...
... this " recession " is a dream of Adrian Orr's ... the economy is still pumping strongly from all the cheap cash he flooded the system with ...
This is what I've noticed too, from a few mall and shopping centre visits to get the Xmas pressies and other essentials.
The malls aren't ghost-towns, but not as busy as I would have thought. Seems to be a lot of people wandering around for something to do, but not necessarily buying.
I don't have as much exposure to the 'business end' of retail as I once did (all my clients are shutting down for the year now, whereas in my retail salad days the fun was starting about now) but those I keep in contact with are reporting slower-than-expected activity as well.
Went to live theatre on Saturday night , Oxford Tce was positively humming , all the bars & restaurants full to overflowing ... and a full house to watch " Cancel Santa " ..
.... folks seem to be ignoring Adrian's plea to stay home & be grinchy ... what a surprise that is .... not !
I am going to join the "we don't need any more rate hikes" club. Let the current values play out and maybe just pretend rates are going higher. The wheels are starting to fall off everywhere and I think it would be at least the end of next year before house prices would be properly priced in with current rates.
The only advantage with going to 6% OCR or whatever would be it will look so far beyond saving with public debt, they might not try.
Will it? I don't see a strong correlation with the OBR and overseas rates, there are other factors in play. As long as we don't get an oil price peak at the same time I don't think a couple of months with a poor exchange rate before everyone else stop raising as well is worse than the extra mortgage stress. The imports wont be inflationary if the consumer can't afford them.
Curves are inverted almost everywhere in the West.
What, you mean our pollies and bureaucrats are all frauds? Surely not?
No current politicians talked to the protesters, or stood up for them when they were subjected to psyops torture methods.
It would appear they do not represent anyone but themselves and their foreign masters.
Is it a good time to buy a house? Aucklanders think so | Stuff.co.nz
https://i.stuff.co.nz/life-style/homed/real-estate/300766849/is-it-a-go…
Out today more data from the data guys
https://actuaries.asn.au/public-policy-and-media/thought-leadership/gre…
Worth a look, considering ASB are forecasting 25% of from peak
https://www.stuff.co.nz/life-style/homed/real-estate/300764255/asb-expe…
Don't worry HW2 the capital value of residential property is decreasing minute by minute .....while who knows where commercial property stands, with so many still working from home etc
IMHO I think we are in for a doozee of a recession ....all planned of course by the "powers that be".
I hope your friendly bank is dishing you out those mortgages, as we need people like you, to keep the "ponzi party" going !
So keep up the good work .....tally ho !!
I can see exactly where you are coming from, now that you are cashed up. Hoping to employ the same strategy you used in the US of A. Buy low sell high, good for you. Stressed out mortgagors, of which there are not many, need people like yourself, however careful not to gloat or you start looking like a greedy leech
PS don't presume anything.
HW2, I think this whole PPP (property ponzi party) in NZ, in this last decade or so, has been a total waste of time & money for all - except for the banks and some multiple properties owners.....like yourself ;)
If we had a capital gains tax for ALL house sales from the get go (like EVERY other country in the world) that could of helped with the much needed infrastructure etc.
FHB's net incomes would not be "pillaged" by "higher than market" rents, while the tax payer assists these "rents" with the Accommodation Supplement. While they can' t save a decent deposit.
For people who only wanted one home, the price increases don't matter one iota , as the only way to make any money is to "trade down"....big deal.
All those mortgage interest payments that went to the banks - not into R & D, specialised education, innovative industries, value added products, niche markets, new plant and machinery etc etc
And what are we left with ..... please answer that ?
I think this whole PPP (property ponzi party), in this last decade or so, has been a total waste of time & money for all - except for the banks and some multiple properties owners.....not into R & D, specialised education, innovative industries, value added products, niche markets, new plant and machinery etc etc
And what have you been doing since the '08 GFC other than speculating on USA residential property
This generic comment is designed to not give anything away.
HW2 ... I know you probably won't get to read this message, as you will be off on this site, berating some other poor soul on this forum, that didn't follow your "instructions".
While I have to say, what makes investing in another country's residential property market, that turns me into some kind of "leech", if I mention it (see your above post )
I think property investors (multiple) in New Zealand have "leeched" far more per person from the economy, than anyone in the USA ....while the USA, most of the money is in shares/bonds etc. anyway.
It's the "system" here in NZ I have a beef with - it has been one of legal tax saving and rebates, assisted rents for dumps, cheap mortgages, no capital gains tax etc .....while all through this time you had John Key saying "high house prices are a good thing" ! ...while Labour were no better and as I have said before, I never thought that I would see a reverse claiming against your mortgage interest, so that was a genuine surprise.
I have always "contrasted" how the residential property market works here vs. the USA (in my particular area) and I have to say the gross returns are far better for the capital input ie an example - $155,000 USD cash in (no mortgage from NZ, used my savings) to buy and renovate, then I had the property rented ($1,800 per month) to the same person for 9 years - NEVER raised the rent, and through great property manager, things were always repaired immediately. The tenants looked after the property really well and liked it - so much so, I sold it to them at reasonable price (not "overinflated" like here !) while his dad was a real estate agent, so I'm sure he knew the market.
So I had a happy tenant and purchaser, while most of the cash flow went back into the US economy, where it was created. So if you think my "strategy" was anywhere near "leeching" you may as well stay away from 80% of fast food joints in NZ !
So, as you said my comment was "generic" I hope the above I wrote, just gives you an insight into why I make "generic" comments about the NZ market, as when you compare the two, I know which one was the better one and where BOTH parties were satisfied and didn't feel "ripped off" or have all their disposable income drained by rent or mortgage/interest payments.
Anyway Merry Christmas HW2 and lets hope things get back on a more of an "even keel" in the future, for the NZ property market.
leeched is a term applicable to motel owners providing emergency housing.
HW2 will still be here Crazy, he may not answer though.
Crazy recession coming, I cannot even begin to establish where I would bid on NZ housing, and I love distressed asset buying. Anecdotal - Two Builders selling all tools in Orewa, going back home to China, Hilux out front with matching number plates. Just sayin
Yep IT GUY , HW2 is a classic case of pushing his own "narrative" to keep what has been going on, for much of the last decade in the NZ property market. Anything that goes against the narrative is trashed. However since covid, the market has definitely "turned" and who knows what 2023 will bring ??? While HW2 will be watching the value of his portfolio decreasing, interest rates rising, he will be thinking "now where can I raise those rents?" I don't give a toss whether my property dropped by 50% as one house is worth just that - one house and you have to live somewhere.
I was just trying in my post above to show HW2 my "reality" I experienced in an overseas market, where the numbers actually "stack up" - for both property owner and tenant. Which at the end of the day with HW2, is just pissing into the wind.
There is a crazy recession coming...while the only thing I don't know is the magnitude of it ? While the government might save the people financially when it suits them, the banks are running a business and there are no "free lunches" with that mob !
Thanks for your story about the 2 builders - it speaks volumes !
Cheers and merry Christmas
The removal of any addictive habit causes withdrawal problems.
The addictive nature of the last ten years of ever cheaper debt will see its removal be no different. Live within your means, pay off debt(s), don't lock up excessive debt on speculative stuff and leveraged tax avoidance schemes you will be fine.
Cold turkey time...
My commercial office landlord clearly hasn't read the signs. He bought the building 'half price' from the council a year or two ago and clearly thought he'd made a killing. He told us once the council lease expired he was going to hike our rent 50%. I laughed so hard tea came out of my nose. His justification was that was what they'd budgeted. Yeh, all our systems are online and we can work from anywhere. Meanwhile the building is emptying fast. As long as there is greed there is plenty of money to be lost by speculators.
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