Here's our summary of key economic events over the weekend that affect New Zealand with news we are now in the final two weeks of the northern holiday season, and that is anchored by the central bank shindig at Jackson Hole, WY. starting at the end of the week.
This week, China will review its Loan Price Rates later tomorrow. No change is expected. Canada will report July CPI inflation. And there is a dairy auction on Wednesday. So it will be a light data calendar.
But first up today, more evidence that foreign direct investment has stalled into China. We marveled at the stall in both May and June and it has extended into July although it was now a positive ¥40.6 bln (NZ$9.3 bln) in the month. The net inflows are still very small for a country the size of China. In July 2023 the inflow was ¥140 bln so in July 2024 it is down -70% from then. China has been masking the stall by only referring to the 'year-to-date' results rather than the monthly outcome. But even that approach will catch up with them soon. Now YTD 2024 is down -50% on YTD 2023. That is massive.
And it is not just FDI. Beijing stops reporting equity flows starting today, a key sentiment indicator to track their NZ$14 tln equity market. The data to Friday showed the year-to-date flows turning negative. So the rush seems to be on to get out. From here on, we just won't know how fast it develops. Concerned about the negativity, China told fund houses to stop displaying real-time mutual fund products’ net value. The last time it was available it wasn't good. But if it does turn positive, Beijing will be the first to tell us.
And the Middle Kingdom has had its weather/climate challenges this year too, more so than other large countries. The impact of floods, while common in China in summer, has grown more pronounced this year, affecting over 7 million people nationwide in July, when Beijing was struck by the worst rains in 140 years, after the capital's hottest June on record. The dramatic swings between extreme heat and intense rainfall have stressed China’s power grids and shut factories, while risking the country’s water security and causing widespread crop damage. Nationally, direct economic losses from natural disasters surged in July to almost NZ$10 bln in that one month, more than in January to June combined. There will be food security consequences.
Meanwhile, Taiwan reported its Q2-2024 GDP expansion at +5.1%. But that was down from +6.6% on Q1-2024 even if it was up from +1.4% in the same quarter a year ago. Beijing is probably looking on in jealousy.
In Japan, profits topped analyst forecasts for 70% of surveyed Japanese companies in the April-June quarter, led by the vehicle and artificial intelligence fields. Many are benefiting from the tailwind of the weak yen.
In India, 19 or their 38 states are running 3%-to-GDP deficits or more in their bids to shine economically. That is raising the national public debt sharply. Delhi is concerned and tightening up what is permissible. And the central government is having to restrain itself to cover aggressive state deficit spending. The catchup of their infrastructure deficit is essentially driving the pressure.
In the US the University of Michigan consumer sentiment survey index rose more than expected with its first increase in five months. The expectations index improved (the highest in four months) while both the year-ahead and the five-year inflation expectations were unchanged at 2.9% and 3%, respectively.
But that rising sentiment doesn't include their housing market. Housing starts fell sharply in July to their lowest level since July 2019 (pandemic excepted). Residential building consents also fell and back to 2022 levels. The US economy is expanding at pace without the support of their housing markets.
But it is very much better north of the border where Canada reported a surge in housing starts, up +10% in July from the same month a year ago.
And tensions are rising in Canada over the railway/union bargaining that is going down to the wire. If there aren't strikes, they will likely be lockouts.
The EU said its trade surplus is rising. But that is because imports are falling faster (-8.6%) than their exports (-6.3%).
The UST 10yr yield is now at just on 3.88% and down -1 bps from Saturday and down -5 bps from a week ago. The key 2-10 yield curve inversion is little-changed at -17 bps. Their 1-5 curve inversion is also little-changed at -74 bps. But their 3 mth-10yr curve inversion is now at -148 bps and slightly deeper. The Australian 10 year bond yield starts today at 3.94% and and down another -3 bps. The China 10 year bond rate is down -1 bp at 2.19%. The NZ Government 10 year bond rate is still just on 4.16%. A week ago it was at 4.30% so a net -14 bps fall from then.
The price of gold will start today up +US$1 from Saturday at US$2508/oz and a new all-time record high. A week ago this price was US$2427 so a +3.3% rise since then.
Oil prices are unchanged at just on US$75.50/bbl in the US while the international Brent price is now just on US$79/bbl and unchanged in a week.
The Kiwi dollar starts today unchanged from Saturday, still at 60.5 USc. A week ago (pre the OCR cut) it was at 60 USc so a +½c gain from then. Against the Aussie we are still at 90.8 AUc. Against the euro we are still at 54.9 euro cents. That all means our TWI-5 starts today at 68.8 and unchanged from Saturday.
The bitcoin price starts today at US$59,568 and up a mere +0.2% from this time Saturday. However it is down -1.2% from this time last week. Volatility over the past 24 hours has been low at just under +/- 0.9%.
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103 Comments
So the NZD is back at $0.605 USD.
The people on this chat who predicted our dollar tanking if we cut before the fed are overlooking one thing. The market has more information than you and is smarter than you give it credit for.
RBNZ keeping the banter hawkish and OCR high relative to the fed, would have only worked for so long. When large institutions start shorting the NZD based on bets against our tanking underlying economy it would be a much greater risk than the reserve bank correctly acting according to our economies needs and cutting rates! Our rates outlook is way lower than the RB even admits to now.
The fundamental underlying weakness of our economy is the greater risk to our dollar ;
- floating in and out of recessions
- massive lost wealth per capita.
- Losing productive workers to other countries and importing low skilled immigrants
- massive over dependence on housing
- lacklustre infrastructure requiring investment we don’t have
- political extremism. Think blocking motorways in protest straight after an election. That’s protesting democracy!
- hiring freezers (on nurses) at already understaffed hospitals because we can’t afford them (not because we don’t need them)
- extreme weather events and the impact on our small island nation relative to larger countries
- increasing population % of retirees. Decreasing population % of workers. And people heading off shore.
But as long as we hold our OCR at 5.5% until the fed cut, we will be all good? Yeah, nah.
Some of us stayed away from crystal-ball-gazing. The first poster is wrong; the 'market' is a bunch of lemmings in a dance which oscillates between fear and greed. You can write a prima facie programme, or a Boolean algebra one which second-guesses the number of second-guesses...
But at the end of the day, they're all parasitic on energy/resource flows. How much of the skimmed-off proxy will be how valid?
Funny to watch the fierce, myopic avoidance of reality, by so many who need reality to not exist.
You're an interesting mix.
Thank you for bothering - puts you in a completely different class from others (often with pen-names depicting self-elevation).
But the porn label, is pure shoot-the-message-by-denigration. You offer no rebuttal, no de-bunking. That was a pretty scientific exchange.... either it can, or it can't, be rebutted. Calling it names, doesn't cut it.
There's a field, about an hour or so outside of Phnom Penh. There's a tree in the corner, where the Khmer Rouge worked out the cheapest way to dispatch an infant, was to hold it by the legs, and swing it's head into a tree.
Every year, in Monsoon season, the rain washes mud away, and ribbons and pieces of clothing come to the surface.
Now, this possibly isn't the worst example of human behaviour people have heard, and me communicating it, probably doesn't change what people's views of the potential of human behaviour can be.
If I were to regularly post such information, what am I actually achieving or changing?
Everything ends, and most of the prophesies you seek wont be the cause, and you won't know which one might be the one.
Random irrelevant comment.
If the Kyhmer Rouge we're currently killing babies this way and we could do something about it I would say that it would be a good thing to hark on about.
PDK posts about how we are systematically doing the same to the planet as the Khmer Rouge was doing to those babies. He provides evidence to show how we are doing it. He shows how some parts of the country directly benefit from it and posts links that debunk the narratives that those that benefit from it use. You seem to criticise him because he doesn't have a silver bullet to fix everything.
I suppose you think that back in 1977 if someone witnesses the Kyhmer Rouge systematically killing those babies they should have kept it to themselves instead of being a DGM and being a bit of a downer.
You seem to criticise him because he doesn't have a silver bullet to fix everything.
No, I just don't see the point in being constantly fixated on seeking out, and then relaying every hypothesis on what exact sticky end we're in for.
Once you reach a conclusion (we're all screwed), adding more does nothing, or actually the inverse. We are now so desensitized to this sort of stuff, most everyone is apathetic to anything that's not their pet interest (hence the Khmer Rouge anecdote).
Everyone has to have a hobby I guess.
Human nature really doesn't change does it. Thousands of babies have died in Gaza and are still dying but nobody is doing anything about it in 2024. There are currently conflicts all over the world and it will only get worse as resources deplete and are fought over. We are just part of the lucky few living in New Zealand.
Physics is fixed and immutable (sort of).
Psychology can be leveraged in many ways and human behaviour is malleable and based on social construct. The same motivations that allowed a person to smash a baby against a tree can be used to stop us burning the planet. The first step is to acknowledge that smashing a baby against a tree is wrong and if you're doing it the narrative that you rely on to justify it is bogus. Same with destroying the planet (exponential growth).
Saying it's pointless because psychology is lazy, defeatist, and wrong.
"From a psychological perspective, almost all of your behavior is shaped by your environment"
- Dr Benjamin Hardy, organisational psychologist
Fun podcast for blowing up fixed mindsets about the role of willpower in behaviour change
Benjamin Hardy | What to Do When Willpower Doesn't Work (jordanharbinger.com)
PDK - what you communicate is valued because it is industrial strength science, broken down for resource decision maker audiences. It implicitly and explicitly calls on and challenges the reader to figure out ways to adapt personally, encourage others to do so and use their own influence.
Keep going. It's absolutely essential that we understand this, as we consider the obligation to adapt our economic models in light of the energy and resource allocation problems that drive the exchanges and relationships that will make up the economy of tomorrow.
Some read your work and throw their hands up in despondency and acquiescence to existing systems, because they see so much of the problem as being outside of their personal locus of control and they feel anxious by their perceptions of lack of personal agency and influence, and terrified of being ostracised from the herd. Not profitable enough, too big, too complex, too little imagination, too lonely a road to walk down. But ignoring it doesn't make it true, it just brings cognitive dissonance.
Others see these calls as a message to get to work, bringing people together to figure out what a transitioned future needs to look like, and working to bring it forth.
Both choices are bloody hard. At least with your contribution, we can make that choice consciously.
Seems to me that the NZD was up in the 0.6170 area when the market start pricing cuts and dropped to 0.5927. Smells sell the rumour buy the fact. 2 big figures is gd money these days. Good place to get short here based on the strength of US over NZ, if there is anything risk off you will probably benefit as well. Just be careful of the 17/18th Sept, and major US stats that will impact the FED decision. NZD does not seem to be riding to the rescue of our smaller industries like dairy or meat export these days.
Anyways todays focus is on HPI, they have had a lot of time to polish the turd.
You might well be right, depending on the size of their exposure to NZD. I know the big IB’s and HF’s pay for this type of information and get it regularly.
I would think if you had big exposure in your portfolio to a currency, equity, swap rate or commodity, you would make it your business to know what you consider to be relevant factors. Not just headline news and central bank rates.
Many of those figures, aren't relevant.
Why would anyone care what GDP/capita is when appraising a currency?
Or whether the public sector is or isn't hiring nurses? Our government has relatively low debt, so can take on more nurses, if it wanted to. If anything you could argue that an austere government increases the value, in the same way shares can go up if a company announces it is axing workers.
I think its the way the US is increasing debt so fast under Bidenomics that's holding the kiwi up, its no wonder there economy is as strong as it is with that kind of borrow and spend. History shows us that NZD under 60c is a bit like a balloon under water. Sure it travels that path in crisis and crashes, but when the reality settles we never look that bad in comparison to others.
Food for thought on the 'hiring freeze' on nurses:
Think of the number of nurses nationally who have multiple contracts for multiple role is in different hospital departments, with different shifts etc. They have a constant revolving door of HR work to be done with contracts, reappointments, nurses wishing to amend their hours to less or more which requires contract changes, it is insanity. So when they say freeze, they aren't freezing hiring at all, they are just making it harder to manage the contract changes by needing excessive levels of approval for any hiring that needs to go multiple levels up the chain to get signed of, and this is going to those at exec level who already have a full schedule. Speaking from knowing the goings on within this system, it is hilarious that they say there's a freeze, as many swap form FTE contracts to casual so they can come and go with shifts as they wish. The work still needs to be done, but it is struggling to get done in the contracts space as they have added too much approvals needed for it to keep up and function with any efficiency.
You'd be 100% right. I've worked on them in an ICT role for some sizable finance houses.
I'd say they know as much, probably more, about NZ Inc. than the RBNZ, Treasury, etc. do.
Their analysis largely ignores the headline numbers and goes to the core data which is then aggregated while stripping out 'fluff' and weighting some data more heavily or lightly. To gain further insights, there are a set (200+ for many economies) of constantly re-weighted 'what if' scenarios that are run to gain further insights. (This was over 20 years ago. God only knows what they do now.)
Definitely on a local scale emotion plays a part. When I think market relating to a currency I mean bigger than the emotional guys… institutional investors typically shouldn’t let emotion rule their decisions... although it is human nature to doubt yourself and second guess decisions. So fair point
Great to have a new knowledgable commenter RMN, welcome to Interest, and thanks for your great first post.
Also I certainly share your view that "Our rates outlook is way lower than the RB even admits to now." Personally, I expect the OCR to be 2.5 - 3.0% at the end of August 2025.
...following & raising your 2.5-3% with a prediction of subsequent ~ a third reduction mortgage costs (7+ to <5%) & resulting house price escalation to match ?
We've recently been there before so it's unlikely to happen, if for no other reason than 2026 is election year & NACT will not want to campaign on massively increasing house prices
I'm predicting a big interest rate reduction over the next 12 - 18 months. I have not made any prediction for house prices, not up, neither down.
"We've recently been there before, so it's unlikely to happen" Why do you think this time is different? My take is definitely "We've recently been there before, so it's very likely to happen again"
"What you forgot to add or don't understand is that a significant component of the 'market' is emotion and is thus largely irrational."
By value (sums traded) lots of 'emotion' gets removed.
For example, 'emotion' might be the reason some now decide buying a rental is a good idea but the banks will process any mortgage application without emotion. At the $100s million level, e.g. buying govt debt, emotions don't play a big part, but spreadsheets and quality analysis do.
Or perhaps put another way, ordinary people, making ordinary decisions are affected by emotion. But the bigger the sum being spent, even by ordinary people, the less part emotion plays, and the more the emotion gets filtered by 3rd parties (who focus on their own emotionless goals).
"....the rush seems to be on to get out. From here on, we just won't know how fast it develops."
The same as any market. Selling whilst there are buyers is all that matters. I know, I know. "But if you hold on, it will be higher in the future!". Which is fine until one day that doesn't happen.
I am surprised the market is not more negative on kiwi given our major trading partner seems a bit stuffed and we mainly export premium food to them, they have beef meat price deflation in China. Global diary trade auctions start to move kiwi soon IMHO next auction is tomorrow 20th.
Hard to see China massive buyers given their current situation.
I remember when China, Russia etc were going to implement a basket of currencies to replace the USD underpinning global trade. It was on the front page of business sections around the world. BRICS. Now a decade later, information about China's own international markets is blocked, they've managed to turn Hong Kong into a shell of it's former self, and Russia is a laughing stock. What a joke.
China told fund houses to stop displaying real-time mutual fund products’ net value. The last time it was available it wasn't good.
As a sidenote, based on average Treasury yields at the various points that the Fed has expanded its balance sheet, we estimate that the Federal Reserve’s $9 trillion balance sheet is now underwater. If the Fed was an actual bank, and if banks marked their assets to market value, the Fed would be insolvent. Of course, the Fed doesn’t mark to market, nor have banks done so since the early-2009 market low, when the Financial Accounting Standards Board relaxed FAS Rule 157 (which is actually what ended the global financial crisis – by making bank insolvency opaque). In effect, the Fed has created liabilities for which there is now no corresponding asset, and now finds itself wandering into fiscal policy, which is the sole domain of Congress. Needless to say, nobody cares.
Even without capital losses (which can be recovered by holding the bonds to maturity), the Fed will also go underwater if the interest it pays on reserve balances exceeds the interest it earns on the bonds it purchased. In this case, the Fed can be expected to book any loss as a “deferred asset.” As Ben Bernanke explained before Congress years ago, when the Fed books a loss as an asset, “it is an asset in the sense that embodies a future economic benefit that will be realized as a reduction of future cash outflows.”
What Bernanke meant with that hand-waving gibberish is this: Fed normally returns the interest received on its asset holdings back to the Treasury, for the benefit of the public. If the Fed’s bond purchases lose money, that interest will instead be used to cover losses. See, “it is an asset in the sense that it embodies a future economic benefit [to the Fed] that will be realized as a reduction of future cash outflows [to the public].” Yay. Link -Hussman
For those heading to Aussie for better....well, everything... it's good to see sense returning to their markets (sarc/off)
"Sydney home undershoots reserve, shows ‘level-headedness’ is back.
A two-bedroom house in Sydney’s eastern suburbs sold for $550,000 below reserve on Saturday.... as more homes come on the market. A young family bidding for the (property) that passed in at $4.8 million, secured it at a negotiated price of $4.95 million, well below the $5.5 million reserve" (AFR)
Sydney is mental. Some friends of us were ecstatic with the deal they got of a mere $3.5 million for a decent, but nothing remarkable 3 bedder in a nice part of town.
They've done well for themselves income-wise by moving there from NZ, but I can't see how they are any better off overall than my wife and I living in a nicer place here in Chch for about $750k, albeit on a smaller income.
I like Aus as a country, great place to visit and I'm the first to admit that it's a path for Kiwis to "better themselves" but Sydney seems absurd if you actually want to live anywhere half decent.
Yep, Sydney makes Auckland look very cheap if you compare like for like, as do many other big cities. The average property in London may be cheaper than Auckland, but it is probably a 2 bed basement flat on leasehold land or something (and yes I know Auckland is not London).
Pa1nter is sort of correct.
But the Full stop bit is wrong. In the beginning it is pure debt, but overtime that debt, through payment of it, is translated into increasing ownership of an asset which to all intents is then an effective saving scheme. It is an effective means for ordinary people to achieve significant asset ownership when they otherwise would not have the means.
The complications are the type of payments; it it is interest only the ownership share may or may not change depending on the asset value, and that is the second point. The asset value can change over the duration of the debt. It may increase (which is what most are banking on) or it may decrease (which would ultimately reduce the ownership share of the debt holder).
Market capitalization isn’t “wealth.” It’s the latest price, times shares outstanding. Blotches of ink on paper. Flashing pixels on a screen. If a dentist in Poughkeepsie buys a single share of Apple at a price that’s 10 cents higher than the previous trade, $1.6 billion in market capitalization emerges from thin air. If a single share trades 10 cents lower, $1.6 billion evaporates just as quickly. Whatever happens, every security in existence has to be held by someone until it is retired. Ultimately, the wealth inherent in a security is the future stream of cash flows it will deliver to its holder(s) over time. Price fluctuations don’t change those underlying cash flows. They just provide opportunities for the transfer of savings between investors. High valuations favor the sellers. Low valuations favor the buyers. Investors have never paid higher prices for those future cash flows, or accepted prospective returns so low.
Put simply, the bubble hasn’t changed the wealth, and a collapse won’t change the wealth. What will change is the market cap. I suspect that the erasure of market cap in the coming years, and possibly the coming quarters, may be brutal. Still, no forecasts are required, and our own attention will remain on observable valuations, market internals, and other factors. Meanwhile, even if an investor sells at these extremes, the only thing that will change is who holds the bag. Link
“Ultimately there’s no natural income streams to be able to service and repay loans. What you have is capital gains which are contingent on the game continuing. So it’s a Ponzi scheme. says Werner. - https://wire.insiderfinance.io/richard-werner-qe-infinity-707e2c627e03
That is fundamentally incorrect too. I paid off a mortgage over a period of around 30 years. so i now own a significant asset with no debt. The value of that asset fluctuates somewhat while the level of debt did not. I went through periods where technically the bank's share of the asset ownership increased despite my payments towards the mortgage, and then the 'market' changed again and my share increased over and above my payments. But that is the nature of what a mortgage is. If I were one to measure my 'wealth' (which I'm not) I suggest it could be shown that currently my wealth is declining as the housing market slides backwards, but home ownership costs are increasing everywhere. Still I can't afford to retire.
It is numbers on a screen until it is a real resource that is of some value. That $10,000 in the bank is simply the bank giving you the promise that they will give you that $10k on request should you ask for it. Silicon Valley bank customers, as well as many in history have found out that said promise is not always able to be fulfilled. Money is debt, it is a promise to pay, hence why on Bank of England notes it has 'I promise to pay the bearer on demand the sum of [5,10,20,50] pounds'. Said bank notes mean nothing if the world upends itself, but a large food stash means something, or a physical good that others need and would trade/barter.
Yes I agree with your synopsis. My mistake was to say the money was in a bank account. I should have said in your wallet.
I think that old promise was to pay the bearer in gold wasn't it?
But yes today any cash we hold is dependent on the government's ability to maintain the economy. Any form of catastrophic collapse undermines the value of the common trading currency.
No, you're locked into a paradigm that at it's most base core is wrong. It doesn't matter what the trading medium is, it is not debt unless it is borrowed from somewhere else. I own the cash in my pocket and owe no one else for it. The cash is there because it is the commonly accepted trading medium for day to day transactions. There is an obligation on the government though to responsibly manage the economy to support the value of that trading medium, but that is not 'debt'.
I suggest you break your understanding down to what 'moeny' is. If you need to get that understanding by going back in history for up to 2 -3000 years so be it. But you will also realise how the banks have hijacked it as a means of power to control governments, business's and people.
Hmmm You might want to watch the link
Sounds like you believe you have an Asset, but there is no Debt involved. I wonder where it derives its value?
Can I make an offer for your house in pretty coloured shells? How about in pretty coloured shells digital credit?
Let me know and I will talk to my pretty coloured shell manager.
I assume when you sell, you will convert the shells to concrete cash, just to be sure.
The value is derived from common consensus. It does take a barter component from transactions, but it remains none the less.
Collapse the government and everything changes. But societies are strongest through collectivity (not 'communism'), but then we get cliques within society like banks who manipulate to suit their own ends. Hence we end up with 'inflation' and interest and so on.
A collapse or a very poor/bad government which doesn't understand the link of it's work to the value of its currency is needed. Any currency in the world is primarily backed by the actions and support of the government that 'owns' it. there are other factors that come into play (The US$ being the reserve currency) but basically that's it.
It is an expectation that there will be $10,000 'worth' of stuff on the shelves, in the future. It was conjured up on a bank computer, with nary a glance outside the building. At some point, there was obviously going to be more held digits, than remining planet (check out World3, Standard Run; the resources trajectory - note where we are on that). So today, you'll get away with swapping your proxy for something real. Tomorrow too, on balance.
But 2030? I wouldn't be putting money on it :)
The trick is to turn what you can of it, into non-perishables you know you'll need ahead.
A mortgage is a debt AND a compulsory saving scheme, Audaxes. From a pure financial viewpoint, yes you are correct, but the quote specifically referred to "behavioural economics" and you seem to be missing that important part. It's easier to save when we have to, and the saving is taken out of one's account automatically and regularly than through the best intentions in the world.
Complete agree. I am naturally a poor saver, having a house with a mortgage is indeed like a forced form of savings. I wish I had bought earlier in life. A combination of bad financial management on my part and bad luck (my wife’s health issues, mainly) conspired to get in the way of that. But we have fought our way to an Ok position
That's a very honest post HM, thanks for sharing.
You say "having a house with a mortgage is indeed like a forced form of savings. I wish I had bought earlier in life". That is precisely why I often post that FHB's should buy as soon as they can. I am then often called a "spruiker" (and worse) with people pointing out that house prices will continue to fall. Over the term of the loan, you are certain to experience 2 or 3 house price falls, they end up making very little difference in the end. You end up with a mortgage free house, the renters, like my parents, end up with nothing.
I hope your wife's health issues have been resolved.
I 100% agree, and like any investment it needs active management.
Queenstown has done better the Gore etc..
HPI today will show that last month was not a great month for asset, yet interest costs where at almost record levels.
Since Oct 2021 its been better to be renting. Core logic says average down $9k every month this year
This chart from Strategas shows why many Americans are unsatisfied w/their economy. Inflation for the avg American – Common Man CPI consists of Food, Energy, Shelter, Clothing, Utilities & Insurance – has risen faster than wages, resulting in a perceived loss of purchasing power. Link
Now YTD 2024 is down -50% on YTD 2023. That is massive.
This is a brilliant explanation by physicist @hsu_steve of the enormous mistake the US made with its semiconductor sanctions on China, basically sanctioning its own firms and creating a huge market opportunity for Chinese companies. Link
Misleading advert to ponder while you wait for the HPI ....lol .... Says $350 a week rent but the math adds up to $370.... click on 'show more' in the advert...lol
https://www.trademe.co.nz/a/property/residential/rent/waikato/south-wai…
DGM. Doom & Gloom.
Always a such a subjective label.
Is the price of petrol Falling, Doom? No
Is the prices of a second hand car falling, Doom? No.
Unless, perhaps, you are a holder, or a seller, of either of those items.
The same with all things property. It's only Gloom for those on the potential, or actual, selling side of the equation, that then term it Doom.
Wellington valuations are due to be set at next month. I expect ours to be down by 20-25% on the ridiculous 2021 RV. Not selling, so not bothered. FWIW if that proves to be correct it'll be up 17% on the 2018 RV, which was also a bit high for the time but much closer to sanity.
The conspiracy theorist in me suggests the council will delay releasing them though, pending a "review of valuation processes" because it's politically unpalatable to charge ~20% more rates for something that's worth ~20% less.
The 20%+ rate hikes are needed sadly. They build a city on a bunch of reclaimed land and steep hills which have not been replaced or maintained, and are subject to damage by earthquake. Someone has to pay for it and the general public outside of WLG won't have a bar of paying for their councils poor management in comparison to their own.
One wonder whether China is that bothered about the current levels of foreign direct investment. They issue their own currency, produce (or can produce) most what they need and their economy is significantly larger than back in the days foreign direct investment was desperately needed. They may decide they're completely happy with normal growth for many years to come. The saying they're an inscrutable bunch isn't without substance.
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