Prices rose more than expected by the Reserve Bank (RBNZ) and most bank economists in the three months to December, according to new Statistics New Zealand figures.
The consumer price index (CPI) rose 0.5% between the September and December quarters, and 1.9% between the December 2018 and December 2019 quarters.
At 1.9%, inflation was nearly bang-on the midpoint of the 1% to 3% range the RBNZ targets using the Official Cash Rate (OCR).
The figures might therefore encourage the RBNZ to sit tight, keep the OCR on hold at 1%, and see how the economy tracks, before changing it.
Most bank economists had expected the RBNZ to cut interest rates by 25 basis points this year (to stimulate economic growth and inflation), although some have in recent weeks started commenting that this might not be necessary.
Rents rise at fastest pace in 11 years
Price rises in the December quarter came largely on the back of rising rents, petrol prices and airfares.
Rents rose 0.8% in the December quarter, and 3.1% year-on-year - the highest annual increase since the September 2008 quarter.
The North Island, excluding Auckland and Wellington, experienced the largest annual increase in rent prices, up 4.9%. In Wellington rents were up 4.5%, Auckland 1.9%, and Canterbury 1.3%.
Stats NZ put the hikes down to higher demand as well as the Government's Healthy Homes Standards, introduced in July. It expected some landlords would have passed on the cost of upgrading their properties in line with the standards to tenants.
Meanwhile transport costs rose 2.1% in the quarter.
Airlines made their usual end-of-year price hikes, with domestic airfares rising 12% in the quarter. Petrol prices rose 1.6%.
Food prices fell, but by less than would usually be the case during this time of the year.
The New Zealand dollar only rose very slightly on the release of the figures.
Let's not get ahead of ourselves...
ANZ economists said: "It’s not a strong, “inflation’s getting out of hand” story by any means, and it’s backward looking, but it certainly affords the RBNZ time to watch how things evolve from here.
"Looking forward, we think economic activity is poised to gradually accelerate over the year ahead and grow around trend over the medium term, with resurgence in the housing market, improving business sentiment and the promise of a little extra government spending on key infrastructure all supporting.
"Unless something untoward happens, we think the RBNZ will keep the OCR at its current, stimulatory, level of 1% for the foreseeable future."
Kiwibank economists said: "We will likely see a +2% run rate for inflation this year, but it is likely to be temporary.
"Tradables inflation was the key driver of December quarter inflation... But tradables inflation tends to be transitory in nature.
"A stronger New Zealand dollar and softening petrol prices should cause some retracement...
"In order to maintain momentum into 2021, we suspect the RBNZ will cut the cash rate once more. Let’s face it, the Kiwi economy hasn’t generated much inflation over the last decade, and may struggle over the next decade."
Consumer prices index
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142 Comments
So either it comes into your accoutn, and counts as income, or it gets paid directly to the landlord, and reduces your rent. Either way, you can't have rent exceed income for very long before everything goes tits up. Also need to pay utilitiues and food etc, so yeah, there is a hard limit rent must stay below income by some amount otherwise people can't live.
With rents rising at 3.1% and houses likely to rise by more, clearly FHB should not be procrastinating. Affordability makes it tough but the indicators are that sadly it is going to get tougher still. As yields are improving and capital gains now confirmed without a CGT one can expect greater competition from investors for those properties affordable to FHB.
This potential FHB who have been complacent as they listened to the unsubstantiated claims of waiting for the housing market to bottom need to seriously reconsider in light of what is eventuating.
Sounds like the advice of someone with a house to sell.
With rents and house prices continuing to rise, FHB should be looking overseas. Leave this basket case of a country to flip houses to each other perpetually. Go and earn a proper wage somewhere else, pay less for your every day expenses, more opportunities available.
My only advice is that FHB should avoid getting into a ridiculous mountain of debt with house prices now 8x incomes or more. New Zealand has very little to offer the young family these days. Low wages, overflowing schools and hospitals, gridlocked roads and motorways, expensive everything - and everyone with the power to change these facts is doing their utmost to maintain the status quo. I make no claims about whether prices will go up or down in the future, just that current prices are ridiculous and FHB should seriously consider leaving this country as the best move for their future.
I definitely do not regret leaving. Wages are low and living expenses are incredibly high. Within 12 months of leaving NZ I am earning 77% more money doing the same job and over three times the superannuation. I pay 50% less to air condition a large 4 bedroom home in the tropics 24/7 than to heat a small unit in CHCH at night only, a new build is half the cost of NZ, food is cheaper etc etc. I can support a wife and kids and still save at least 25% of my income while maintaining a good life style. I'd say to the young look outside NZ if you dont have don't have parents who can help you get a foot in the market or want to own a home and still have money to save and live well.
Hi, please do not advice this crap to FHB. I am 32 came to NZ 2012, bought house 2016 (peak) 80% LVR, two incomes for repayments. 2017 getting consents for subdivision and new build within my section, consent fees, engineers paid from excess money after mortgage repayments. Tough times. 2018 house built using interest only construction loan and revaluated, moved to the new house and rent out the old one. My wife went on maternity leave so on one income plus rental income. 2019 subdivision using second construction loan finalization of project and revaluation. 2020 LVR 55% two houses and rental income. I need to pay just $270 weekly from my pocket(that's what people pay for one room with ensuite in Auckland) and will end up with 2 houses in Auckland in 26 years, which provides me with a roof over my head plus income for my retirement. All of that took 3 years of hard work. Everybody who can handle a little bit of pressure and calculated risk can do the same. If I listened to DGMs in 2016 I would have been still renting that room with ensuite.
More context please.
Where did you come from? The reason I ask is you might have had the benefit of getting lots of NZ dollars from.your foreign savings.
What is your combined household income? The reason I ask is if you are 150k then again it's easy to say 'it can be done' when the average household income is much less.
If you came here with little and your combined household income is less than 100k then I will take my hat off to you.
Hi Fritz, thanks for your reply. I am from the Czech Rep. Came here with 180k deposit(cashed out apartment I bought when I was 20, god bless the capital gains). Household income 140k when my wife worked, now around 90k plus rental income around 25k. It was not easy, believe me we got sweaty many times and as foreigner I was ripped of hard by tradies, ended up with one of them at court. When I arrived the only job I could find was gardener for 17$/hr so I know the struggle of low income earner but I wanted more. It required a lot of effort to improve my language skills, find a job where I can use my qualification and took me couple years to progres into highish paying job, but again I cannot see any reason why NZ born kiwis, with English as their first language cannot achieve the same level of income if they are committed to that like I was.
How did you buy at age 20? Are interest rates and lending super relaxed in Czech republic? Did you get help from parents?
And a high household income in NZ.
Not having a go at you, but most most young kiwis are leaving uni with loans of more than 30k and no savings.
Please don't call bullshit on the struggles of young kiwis, they are genuine.
Well done Deadcatbounce
A reality check for those who think that buying property is for mugs.
From my time as an property investor (now out for lifestyle reasons) it was commonly talked about that with 20% equity leveraged against one's own home, that with house price inflation (which during the period that I was involved was in some instances negative), rents increasing but the mortgage never increasing (but being down paid), that the usual time period to walk away with a mortgage free property was less than 15 years. That is in 15 years the tenant(s) paid off the house for you, paid the rates, paid the insurance, paid the maintenance and repaid the mortgage and you walked away with all the capital gain; the tenant walked away with nothing.
And I read comments how property is a Ponzi scheme - the reality is that it is a rout of tenants.
If some say have more than half mill cash, study from av age 18-45 by records and still study/research up until now, care for cancer patients been paid more than 400k combined couple incomes, no debt, no houses/often subsidies or paid by whomever hosting them, have kids. Just waiting for this end of contract before eyeing OZ. Are they losers for your guys property bulls on this site? - Some RE moguls do visited us, asking to change our stadium IV cancer calculation remaining life period for them, it's more exact than RE up/down timing, yet? it's usually also flowing to their offspring by 'genetic/inheritance'. But hey, don't take our word for it. Go on, argue about it - your Health is the most important, more than just RE.
ShoreThing
You give us far, far too much credit for being able to influence the market with our postings and totally ridiculous to think that a comment on the market is really likely to going to influence the sale of a house which we are selling (but don’t).
This site is about commenting on economic matters and comments on the future of the housing market and its implications are what it is about. Both Yvil and I post reasoned and appropriate comments.
As I have said, your comments sound like those of one who is frustrated and angry. If that is the case for you, you need to think about what you can do.
If you seriously believe your advice that FHB should take off overseas, then why are you still here?
Hope you have a cheerful weekend.
You're right, I am frustrated and angry. I have already thought about what I will do - to answer your question, I am still here until my partner finishes her postgraduate study, then we are both leaving this country probably never to return. There are many other talented Kiwis doing the same.
Really? you really think that Printer8 and I tell FHB to buy now "to prop up the market" you really do believe that, don't you? How sad is it that you think so lowly of others. Actually we say that to help FHB because we know houses will be more expensive in the future and it will be even harder for FHB
Shore Thing
You have every reason to feel frustrated and angry.
As I have posted a number of times it concerns me that homeownership was one of our cultural norms but increasingly that is seemingly becoming unachievable. Homeownership for 18 to 35 year olds has fallen from 65% in 1988 to 35% currently. There are many reasons for this an it is not just about recent house price inflation.
As a boomer I know that a lot of my generation financial security has been a result of home ownership. I see a future “renting middle class poor” emerging.
The current situation really concerns me greatly as an important NZ value, and it seems that this is being over-shadowed by issues of homelessness.
I really wish that the government or one of the major parties would pick this up.
Yes I regularly post on this but it is not about a personal vested interest, rather a concern about the loss of a cultural norm.
I hope that someone reading this with connections or influence in one of the political parties picks it up as an issue needing to be pursued.
Your comment regarding moving overseas is not far fetched. Here in the Hawke’s Bay we have a number of young teachers and doctors who have moved as “house price” refugees from Auckland. They are probably a little more fortunate than many young in Auckland as there are employment opportunities for their skills here, and their salaries are tied to nation wide employment contracts.
What pisses me off is being pigeonholed as a 'frustrated renter', as if that's a choice. It's not a f*ing choice.
Yes, I want the housing market to fall, so I can buy a house. Yes, I'm envious. Because there is no chance of me buying a house unless someone close to me dies at a convenient time. And I'm not a wastrel, I'm an educated, married, 30-something in a full-time job. And my peers are in the same boat. Check out the average income. Yes, if you are in very highly paid job it's possible, but people on here seem to think that 100k is normal -- it's not, that makes you *extremely* well paid.
Yes we're angry and bitter, and being constantly told that we could buy a house if we stopped with the Uber Eats does not help. It's absolute nonsense. If I foresake fripperies like eating, maybe I could buy a house in Moerewa after a few years. The only reason *anyone* under 40 still lives in this shitty country is because they feel sorry for their parents.
Thanks for your honesty brisket and I agree your frustration is well founded and legitimate. The point Printer8 & I are making is that waiting will not get you closer to buying your own home but further, not because we we want it to be that way but just because it will be that way. Have you considered buying a townhouse or even an apartment, which admittedly is not your perfect dream home but as a start to at least no longer let the market get away from you? Then, in few years, you can sell and buy a place that is closer to your ideal home.
I'd just like to add -- I'm not actually that fussed about owning a home *for its own sake*. I'd be happy staying in my rental indefinitely if I had more security -- an 8-year lease such as is common in Germany, for instance. If I could plant some things, have a dog. Normal stuff...
Yes brisket; as well as not having to many freedoms to add personal touches to make the house your home just keep paying the landlord's mortgage off and eventually walk away with nothing to show for it. As a retired boomer, I see people in my cohort with homes comfortably off while those that don't are dependent on social housing and rent subsidies.
Now, that's the key - Aren't you worried how many percentage of this NZ little population to be ended up in social housing or rent subsidies? - How NZ as a nation could/should afford it? - stating the obvious and keep advising the same method of reactions to address it? - hmn, very odd advise, if we need to imply the same advise.. to the next generation, it's only getting tougher, buy now.. buy now. I've jokingly in supporting this buying now RE mantra, keep on advising our educational authorities to encourage economic literacy to children as younger as they can be.. to get a loan/borrow in order to fulfill their extra wants/needs, savings is for loser - we need to encourage debt/loan borrower from very young age. There's no two ways about it. Loan to borrow/purchase a bike, remember.. if they save to buy later? the bike could be gone/increase price as age more, bike size is more too. Study medicine is for the looser, freakin' 10yrs minimum, just to be a GP, why not buying a house started at 18/19? alas.. some of those magic stories online.. always had a catch... they savings first before age of 18. This Savings first is a bastard advise though.. Is Studying/Research/productive work important at all? is it investment/like savings.. or just complete one eyed bull?
What a tragedy it is when our kids feel they have to leave NZ to be able to afford a house and a life.
How many boomers would swap all the house price rises that have just fallen in our lap for the opportunity to have our kids and grandkids grow up here where we can enjoy them. Skype is marvelous, but a poor substitute really.
And yet we are perceived by others as the least corrupt country in the world, apparently.
Note the words 'perceived by others.' Those that live here know the truth.
Obviously shafting future generations through ignorance and incompetence doesn't count as a 'bad thing.'
Perhaps.
I’m a young FHB (late 20’s) and in the military so it’s kind of hard to tell where I’ll end up in terms of location, but at present, I am at home with my parents currently saving and doing some due diligence.
I think FHB shouldn’t succumb to FOMO and panic but everything. Yes it’s tough, and will probably continue to do so, but rushing into things without considering circumstances is probably ill advised also?
Of course, and I appreciate the advice.
But as I said, the location where I may end up is an unknown and I don’t feel particularly rushed to purchase a first home. My comment was more a general that FHB shouldn’t panic and run in blind.
Btw - is your name a misnomer?
You sound like a good level headed guy, of course don't rush into buying just any house, have a really good look around but also don't wait for house prices to come down as many advised last year (it's a looser's game), I hope you find a great house that will suit you perfectly.
Oh no don’t misunderstand me, I’m not saying waiting for prices to come down at all.
My comment was more along the lines that I don’t think FHB shouldn’t panic at the news. Yes it’s becoming more unaffordable, but I’ve seen people try to attain their first house without really looking too much into it and getting hit with some terribly eye watering mortgages and a sense of self-loathing.
Personally I wouldn't buy a house until I thought I knew where I was going to be for the next 5 years or so - lots of time, stress and expense involved in house transactions. If you're dead keen on housing as an investment class you could look at a rental, but I would just save and invest elsewhere to keep life simple. The more money you have saved up the more options you'll have.
Hmmmm. We're in a low interest environment right now and I have no reason to believe it will stay that way forever AND we've yet to feel the effects of the bank capital obligations which will be phased in. Add in that NZ is a relatively low income economy in OECD terms, with some hefty consumer debt, I'm interested in seeing how this all pans out.
Meanwhile, ask the average renter in Wellington or Auckland if it feels like 1.9% inflation to them. The CPI calculation is only one of convenience to the government - and RBNZ's inflation target.
If you say house price will likely rise by more if rents are rising at 3.1% then you completely ignored the correlation between rents and interest rate. This article has already told you that if rents are rising, the CPI will go up as well. What happens when CPI goes up? RBNZ likely will increase OCR. Then the mortgage interest rate would go up too. So with interest rate rising, do you think house pirce will continue to go up? I dont think so...
agree with you there,
they can not afford to
growth is weak only held up by importing people
house prices are 8+ times income so any increase bites into spending which again slows down the economy
they will have to let inflation go to 3.5-4% before they even look at an increase
and how will they bring it back to 2% without sending NZ into a recession?
why are they pushing for the banks to hold a lot more capital
why are they pushing the government to increase spending
why are the government pushing for deposit insurance
the reason is NZ has a massive debt problem, at the moment of very low interest rates its fine, serviceable
the problems will come when and if they start to raise interest rates
Increasing interest rate doesn't cause recession. Business investment, demand, export's poorly performance will cause our economy ressesion. Lower interest rate can stimulate our economy's growth but without good business investment, demand and export, the growth wont last long.
Dont fully agree with you. They might be able to hold it for a bit but it wont be forever. OCR is a tool and simulation to boost economy, it's also a tool to fight inflation. If inflation is not a concern, why US federal reserve bank raises its interest rate from time to time? They could've just kept it low all the time, couldn't they?
Price rises in the December quarter came largely on the back of rising rents, petrol prices and airfares.
Interesting that none of these have anything to do with the rates at which the RBNZ lends to retail banks. The whole monetary system is a farce, the RBNZ should be disestablished.
Stats NZ new methodology which started to be published in January 2019 where actual rather than fairy rental data is collated from MBIE, seems to have shown a marked increase in rental inflation, coincidence or a quirk of timing. Remarkably the MBIE data for average petrol at pump, for the past quarter comes in substantially higher than that stated by Stats NZ for the quarter. RBNZ will still cut the OCR this year as GDP growth will be insufficient.
How are young FHBs going to find their first home and climb out of the rent trap? I recommend they get together and buy a distressed farm ( of which there are plenty ) and form their own community completely isolated from the community which has shafted them. They will by doing this be withdrawing their useful skills from society but will at the same time be able to claim benefits.
As Australia is now virtually an incinerated wasteland, and will be more so in the future, it will not now be a viable destination.
Channeling Mark Manson, eh? "One day, you and everyone you love will die. And beyond a small group of people, for an extremely brief period of time, little of what you say or do will ever matter. This is The Uncomfortable Truth". One sees a lot of distraction from this very point, on Interest comment threads.....but rural silence is a form of meditation, after all...
What the hell did they expect ???????????
Everyone warned Labour about its open declaration of war on the providers of rental stock , EVERYTHING was done by the COL to make investors run for the hills , discourage new investment , and stop all forms of residential property investment ............. who did they think would fill the gap ?
Housing New Zealand ?
Do me a favour .............they embarked on an ideologically driven crusade against a whole investment class of so-called rich pricks ..........AND THEY WERE WARNED NOT TO
These extreme measures included :-
-Banning ALL foreign investment in rental stock
-Threatening the introduction of CGT
-Ring fencing actual losses ........... normal tax-deductable expenses in the production of income
-Unbelievably onerous standards for rental homes , higher than the standards of even my own $2,000,000 home in Greenhithe
Now rents have shot up because many investors have sold up and moved on ..........leaving a worse problem than we already had
Fools !
Thats a stupid thing to say. It was National way back in 2012 or so that started the ball rolling with Healthy Homes as even that shortsighted lot could see how big of a cost to the health system poor housing was. All the coalition has done is finish what National started. Good performance from my mixed class equities this week and I haven't had to pay for an extractor fan or tidy up a messy section to acheive any of it...
But the increase on those on benefits, those waiting for a Social House, those requiring emergency cash etc (and all funded by some mixture of taxes on Everyone Else, and of borrowing), why, that cannot be laid at the feet of the Previous Lot. Taking responsibility would be the adult way of handling all of this....Perhaps a Year of Delivery could have tackled at least some of it, but apparently not. Promises, promises.
I think thats incorrect, the increase in demand is simply latent demand from the preceding decade of gross social negligence in this country. The people who couldn't get help during the Key years because WINZ at his instruction was openly hostile to them, they are coming out of the shadows and asking for help after living in god only knows what kind of third world conditions. Also there will be a lot of people who were living in sheds, garages, unpermitted sleepouts and generally decrepit homes who are no longer able to use them as shelter because they have been rightly banned and well its not even fit for animals that sort of living. You talk about taking responsibility? Then I think a public beheading of Key, English, Collins and Bennett in front of the Beehive would be a good start in sheeting home responsibility to their generally disastrous and treasonous government. Chop chop!
At a guess I’d say the decrease in power bills and doctors bills for those who’s house has just been insulated is probably more than any rent increase.
Not sure what condition your 2 million dollar home is in bit I guess if it affects your health that’s your own problem. But if you have a rental (a business) that is affecting someone else’s health that is a completely different kettle of fish.
Rates went up $20 p.a. in the first year, and $80 p.a. in the second year. Insurance on the other hand went from $110 to $180 per month in that same time frame but the drop in mortgage rates have more than compensated for the increase in insurance and rates costs.
Ouch yup you got me there. I think we spent $50 on a Hot Water Cylinder element a year ago. Fences are good (25mm thick palings so not going to disintegrate any time soon), mowing lawns is often a task expected of tenants and yes whiteware is all in good order.
I could always put my 20% + savings on household expenses versus equivalent market rent into a bank account in the event that something in the house breaks, but houses tend to be sturdy, robust things that don't require too much upkeep.
Leakers are helping to keep the market afloat. They keep builders and inspectors busy instead of working on additional buildings and they have added to the myriad of regulations and increased the cost of new housing. In turn the value of existing homes goes UP. So don't knock leakers 4thE
House price rises seem not to take inflation into account: ie when stated they do not say "nominal or real"
Agree that Central Banks dare not raise interest rates whatever inflation does.
However, inflation means higher cost of living, affecting what banks are supposed to treat as expenses in calculating loans. So, deposits and what banks allow as loans will be affected.
Age of non inflation is coming to and end but as usual economists are not stating it or minimising.
China has pig problem and USA has crops devastated by flooding last year. They supply world with grain.
Finally, when banks economists cast their rhetoric about they never define it: "housing market take off"
MEANING? Higher prices (where) or more sales (where, at what price)
Prices will only rise on median if banks allow more lending. This is unlikely
At top end there is little borrowing needed.
Immigration is falling and interest rates will not fall further.
Hence, on logic we are constantly fed, prices will not rise as these two factors (when strong) are always cited as causing price rises. Plus GDP is shrining and being revised down and world growth slipping.
Plus debt markets are a charge where counterparts risk and over-reach and lack of knowledge of risk is a constant threat. Stock markets are ridiculously over valued and when they drop 20% general confidence will take a hit. Landlord class may want prices to rise but every time they rise more than 3% pa, sales will all (hardly a "take off therefore)
Prices will only rise on median if banks allow more lending. This is unlikely
We will see.
Anyway, for a bit of comparative anchoring, an interview from ex-RBA governer Ian MacFarlane this week. He came out with the following:
"I think we've reached the limit of the household sector's capacity to service mortgages."
"If you're lucky enough to buy right at the bottom and sell at the top, yes, you will make money. But that's only a minority of people who do that"
"The majority, I think, either make not much more money than they would've in the bank or, in many cases, they lose money."
https://www.abc.net.au/news/2020-01-20/bigger-house-price-fall-would-ha…
Price rises in the December quarter came largely on the back of rising rents, petrol prices and airfares.
Rents rose 0.8% in the December quarter, and 3.1% year-on-year - the highest annual increase since the September 2008 quarter.?
The cruel hoax caused by interest rate cuts:
Wealth effect or wealth illusion? The other therapeutic effect of lower-for-longer interest rates is the wealth effect. By driving up the value of future cash flows with lower rates of interest, all manner of assets – stock, bonds, and houses – increase in value and, thereby, can stimulate our marginal propensity to consume. More simply put, the imperative was to make rich people richer so as to encourage their consumption. It is not so hard to imagine negative side effects.
There are the obvious distributional effects between those who have assets and those who do not. Returning house prices in California to their 2005 levels may be good for those who own them, but what of those who don’t?
There are also harder-to-observe distributional consequences that flow from the impact of lower-for-longer interest rates on the value of our liabilities. This is most easily observed in pension funds.
Consider two pension funds, one with a positive funding ratio and one with a negative funding ratio. When we create a wealth effect on the asset side of their balance sheets we also drive up the value of their liabilities. Lower long-term interest rates increase the value of all future cash flows – both positive and negative. Other things being equal, each pension fund will end up approximately where they started, only more so.
The same is true for households but is much more ominous, given the inequality of wealth with which we began the experiment. Consider two households: one with savings and one without savings. Consider also not just their legally-defined liabilities, like mortgages and auto-loans, but also their future consumption expenditures, their liability to feed and clothe themselves in the future.
When the Fed engineered its experiment to promote the wealth effect, the family with savings experienced an increase in the present value of their assets and also an increase in the present value of their liabilities. Because our financial assets are traded in markets and because we receive mutual fund and retirement account statements, we promptly saw the change in the value of our assets. We are much slower to appreciate the change in the present value of our liabilities, particularly the value of our future consumption expenditures.
But just because we don’t trade our future consumption expenditures on the stock exchange does not mean that the conventions of finance do not apply. The family with savings likely ends up where they started, once we consider the necessity of revaluing their liabilities. They may more readily perceive a wealth effect but, ultimately, there is only a wealth illusion.
But what happened to the family without savings? There were no assets to go up in the value, so there is no wealth effect – real or perceived. But the value of their future consumption expenditures did go up in value. The present value of their current and expected standard of living went up but without a corresponding and offsetting increase in assets, because they don’t have any. There was no wealth effect, not even a wealth illusion, just a cruel hoax. Link-pdf
One idiotic commentator has just proposed a RENT FREEZE ............ now that's a recipe for total disaster if I ever saw one .
As soon as Government intervenes in a perfectly working free market its bound to make populist decisions or refuse to make hard decisions , the consequential distortions wreak havoc .
And a RENT FREEZE will be the final straw for any provider of rental stock , ............. even those not of full mental capacity will leave the market as soon as possible, making the problem worse for low earners and renters .
Imagine if the Government tried to place a PRICE FREEZE on the price of oil , or God forbid........ .milk?
We live in a functioning free market economy and current rents are simply a function of supply and demand ........if you dont like it , move elsewhere or cut your cloth
NZ is rapidly becoming a society defined by property ownership, it's not a good thing and should rightly clash with our collective values. However, the game is the game and you don't play it at your peril. No one is going to give you a medal for not buying an investment property and I see it as more ethical than most Corporate's these days (banks billing dead clients).
I hear you TK, I don't think there is anything wrong with owning property as such but it is the neoliberal framework that is our mutual enemy because it turns a corporation against an individual and who is going to come out on top in that one? Just check your bank statement as proof of my argument...follow your spending trail, who's getting it all? I think collective property ownership with ethics and accountability of the holding entity is the way forward... korero mai...
If the declining ownership trend continues, as I fear it will, we will reach a tipping point where the majority may have nothing to lose anymore. I had enough foresight to accumulate property, but I know I'll have to leave them to the kids - so there is little real wealth effect (I'm not even a boomer). It's pretty clear all western economies are addicted to immigration for nominal growth. We have outsourced all our manufacturing to China and now import people as our growth industry. Interest rates will be stuck at zero forever. Who benefits from immigration? The Govt and industry - that's it. Ka kite.
Ka pai, ehoa, its a discussion to have, I think that the real issue is lack of a korero around what exactly is the type of country we seek to have here in Aotearoa. I want Interest.co.nz to seize the opportunity to have this conversation and drag it out into the inconvenient daylight because I do not think all is well in these islands. Do you want rampant unchecked corporations or do you want a hapori where everyone can have a fair go? I think there is a dramatic imbalance which needs addressing. Perhaps there may need to be a mighty hikoi to paint the picture...emea ana?
Well that's the question, how does such rapid immigration take place in such a short space of time? In a somewhat dysfunctional world, NZ is a safe and secure harbour. English law, temperate climate, low taxes and business friendly with good secondary and tertiary education. I don't begrudge anyone from moving here, but it is transforming NZ and mostly for the benefit of the few. Never has the percentage of GDP going to capital been higher nor to labour been lower. Wages are kept low with immigration and cheap foreign labour. We aren't alone, look at the UK where this created Brexit. Anyway that's too heavy for friday night! Tiaki i a koe ake
Another prediction spot on by that rat BuyLowSellHigh
by BuyLowSellHigh | 31st Dec 18, 10:36am
GDP Growth: 2.75%
Unemployment: 4.5%
Inflation: 1.9% for the year...
https://www.interest.co.nz/news/97512/will-current-prosperity-last-will…
The Clark gov't, much like the Key gov't, really just coasted for three terms. Hence the slow-moving catastrophe we're now in, with two decades of infrastructure (including housing) to catch up on.
The only thing I'll say in defence of the Clark gov't, in this context, is that there's a big practical difference between a 10% p.a. rise on a $200k property and a 10% p.a. rise on a 700k property (given we haven't seen drastic wage inflation for a long, long time).
And so did the Bolger govt before. Neoliberalism is all about light handed government with little or no intervention in the economy, much like taking your hands off the steering wheel when you are driving...yet we are all suprised and appalled when the economy loses control of itself and crashes!
Not only that, the benefit of hindsight is a wonderful thing. At what point during the Clark government should action have been taken? Given the stats/figures can often have a lagging factor about them.
Seeing what happened under Clark, with all the benefit of hindsight and seeing the trend...hell even campaigning on it and doing nothing....?
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