So, Stagflation, anyone?
It's a nasty thought. But it's becoming a possibility. Not tomorrow, but perhaps within the next 12 months to two years.
I've had a nagging feeling for a little while that the big house price bender we've been on in the past year, the all night house party, might just have been too much, even by New Zealand's house-crazy standards.
Right now the country's in the middle of a house building boom, driven by the hot market - exactly at a time when the global supply chain is broken, leading to delayed shipments, shortages, and price increases.
That therefore is one of the key reasons that our inflation's just hit a 10-year-high (and actually 13 years, if you exclude the post-GST increase surge in 2011).
The really significant thing though is that the New Zealand public, presumably flush with the perceived 30% windfall they've got from the rise in house prices over the past year, is for the first time in a long time accepting price rises. That means that these one-off shocks due to Covid WILL feed through into ongoing inflation and the expectation of pay rises (which of course is also inflationary).
Primed to move
So, what is the Reserve Bank (RBNZ) to do?
Well, raise the Official Cash Rate of course. And the amazingly hot inflation figures released on Friday virtually guarantee the first OCR move will come as soon as the next RBNZ Monetary Policy Statement (MPS) release on August 18.
It IS worth mentioning though that the country's banks are already doing the RBNZ's work and have already built a 25 basis point rise (and then some with some banks) into their newly hiked mortgage rates.
Notwithstanding that though, those inflation figures were so hot the RBNZ will have to move. Indeed, depending on how other data comes out between now and August 18, you wouldn't put it past RBNZ Governor Adrian 'Shock And' Orr to maybe even hike the OCR by 50 basis points, to 0.75%. He has previous form for pulling the rug out from under the markets.
The economists are now all hastily reworking their estimates of where the OCR is going to go.
I do feel absolutely honour bound at this stage to point at that it's not long ago we were talking about a NEGATIVE OCR and some economists were still saying there would be no OCR moves till 2024 not many weeks ago.
It's fluid out there
Things have changed very fast. They may change very fast again. Not least if we get a Covid outbreak here.
But, let's look at what the economists are now forecasting based on their best reading of a massively fluid situation. And let's apply that against some mortgage calculations using the ever-helpful interest.co.nz mortgage calculator.
In May, the latest month available, first home buyers in this country borrowed $1.757 billion in mortgages. This was distributed among 3205 mortgages, giving an average size of $548,000.
Okay, so assuming a one-year fixed rate of circa 2.2% for a 30-year mortgage our FHB would be paying $2081 a month.
Now, to flip to a projection here - the Westpac economists are now picking THREE OCR hikes before the end of THIS year, giving an OCR of 1% by Christmas.
If, they were proven to be right, and we applied that 75-basis-point rise fully to a rise in the one-year mortgage rate, it would increase it to 2.95%. In FOUR months time.
Our FHB would now be paying $2296 a month, an increase of $215 a month. In FOUR months time.
Some nasty numbers
Looking out a little further, economists at the country's biggest bank and largest mortgage lender ANZ now see the OCR being hiked to 1.75% by November 2022 - so only about 16 months away.
Again assuming it's all passed on to mortgage rate rises, it would give our FHB a mortgage rate of 3.7% (depending of course on when they fix).
Monthly payments would now be $2522 a month, some $441, or 17.5% more than they are now.
Expected interest costs and fees over the 30-year term of the loan would rise from $201,160 to $359,920 a stonking great $158,760, or 78.9% increase.
Something would have to give. And it would be discretionary spending. And that would slow the economy very rapidly.
Housing is a huge part of the NZ psyche. Rising house prices give everyone a feelgood rush. And you can see that around you at the moment, hence the preparedness to accept higher prices.
But it's a honey trap.
It could all turn ugly...
Why a honey trap? Because as the heat goes out of the housing market - as it most surely must if we get interest rate rises of such a magnitude - then the sugar rush high will give way to broodiness and an unwillingness to spend.
In the meantime though, the impact of those Covid disruptions and the inflationary behaviour we've had to date is likely to keep pushing prices up.
There is a risk then that our economy could rapidly lose heat and impetus, but prices would stay up. And that would be horrid. That would be Stagflation.
Won't happen, you say?
Every chance it won't.
But it might.
It's a risk.
And the risk grows more strongly by the day.
134 Comments
**It is worth mentioning though that the country's banks are already doing the RBNZ's work and have already built a 25 basis point rise **
This is the country where RBNZ follow banks not the opposite, may be because of incompetency but that's true. In financial term law of land decided by Banks not RBNZ. What a shame we have bunch of drumheads as our financial controllers.
Suggestion: We should reduce the staff in RBNZ and copy paste big 4 bank decision as there is not need for people who are wrong to the extent that didn't understand of impact of reducing interest rate, Or we should hire experts with more experience (may be from other countries) this also goes with our Govt but cannot do that because the elected person need to be Kiwi.
Are you sure kiwis don't like to spend if they don't have money? You are in dream world mate.
Kiwis like to spend like there is no tomorrow. It does matter they have the money or not.
They will borrow and spend, they will do partial payments and pay in installments but they will spend. Now a new generation of young kiwis have come into the market and they are looking to kick up a spending storm. They are not able to go in their long OE, so they are sending in the country. This inflation is not temporary and not going down any time soon. Unless somehow covid appears again and they want to lock us for 6 months. Can happen, you never know.
Yeah, I think also he would. Many would.
What Cindy has done is total BS, you are saving an island which is at the end of the world with no boundaries shared, with population of only 5 mill & solid economy, what big deal close the borders and it's done.
I would like to see how this turn up in 10 to 15 years when young generation looking to start the family, by then cindy will be all sorted and moved to UN, screwing Kiwi dream & future of lot of kiwis.
I am amazed to see how Orr & Cindy can sleep peacefully after making this debacle and not taking accountability.
We lost 26 lives of COVID & killed million dreams.
Yes. Let's come back then and see how things are. Because no one can predict it. The right would have had the border open, hospitals overrun and nz would have collapsed in a screaming heap. But hey, at least the economy's open right?
There are different ways of doing things. Labour isn't delivering on strategy for sure, but really the right needs to take a good hard look at themselves. There are intelligent people all around, it seems much easier and satisfying to be cynical and insulting.
Who said open the borders, closing border is right decision. But not acting or taking accountability of other debacles is also a question, someone need to answer which is always avoided and no action is being taken.
That's what I said "Labour isn't delivering on strategy for sure", you promise housing (one of the basic need) will be affordable and suddenly it doubled, if you take appreciation for saving country from Covid than at least show same face and take accountability and say we failed to fulfil the promise because of which we came to power period.
... closing the borders only works for so long .... witness the explosion of Covid-19 in Fiji .... we gotta vaccinate , or remain an isolated hermit kingdom ... forget the nonsense that others need it more than us ... Israel fully vaccinated their citizens , they're open for business , open to tourism ...
The talk should be to distribute the wealth in a decent manner. But our economists talk about making rich more richer and write sensational paid stories. Just bcos it's time when interest rates will be raised, we see all these with their opinions coming out. Or paid to come write these stories
Stagflation, a feature of the 1970s, was caused by two massive oil shocks and a collapse of the wool price. What we are experiencing today does not even remotely resemble that scenario. However, I understand that the study of economics is a history-free zone, by and large.
David, how could we have stagflation as in stagnation prices increase and economy growth falls but in NZ economy growth = House price growth as housing is the only economy in NZ and will always keep on growing - assurance from Jacinda with support from Mr Orr, so what stagflation are you talking or even thinking about.
So is Orr and Robertson not justify in supporting and promoting housing ponzi to keep economy growth alive.
... David , so long as we're so flush with excess money that we can shovel several $ millions to the Mongrel Mob to clean up a mess they created .... that's symbolic of a healthy economy in steady hands ... nothing to see here .... it's all good , trust us .... be kind !
Sure, and that's a debate worth having. Lying and saying the government is paying money to gangs when they aren't isn't helpful.
It's $2.75M over 3 years, for 8 week rehab courses for 10 people each + their families, meaning over 3 years it can accommodate up to 360 people, at a cost of $7,639 per person, which covers food, lodging, delivering the actual therapeutic programme + a further 6 weeks support afterwards and then the admin overheads to manage the whole thing. Sounds pretty cheap actually.
The funding is coming directly from the Proceeds of Crime account, not the government's core funding accounts. Support for the programme was recommended by the Ministry of Health and supported by Corrections, Police, MSD and the local Hawke’s Bay Police.
If the programme can prevent these people from going back to prison, which costs about $100k per year, then it can potentially save us a lot of money, which could then be spent on pharmac etc.
Yes, that's me actually. I want rehab programmes that are cheaper than keeping criminals in jail, so when they're out of jail they don't create more victims in the future. Saving us both money, and protecting the innocent. The money saved from this approach can then be used to help more innocent people in the future.
Just depends what your priorities are.
The recent Herald article talks about how it would be possible to fund the Sallies who have a good rehab programme instead. There's plenty of rehab programmes out there which could have been funded. What gives you a more messed up childhood? A meth addict parent, or a gang parent? An even split I'd say. Even if the meth disappears growing up in a gang family is bad news.
So for faar far more than the price of entire annual courses of guided tertiary study, with mental health and wellbeing support with housing combined, which this project does not do any of that, unfortunately these people will come out with less skills than basic NCEA, their whanau still struggling with housing and no basic health and wellbeing skills. Congrats on the most expensive and least useful program yet. Not to mention the attachments to existing gang members who are more than likely to have caused physical harm to the whanau and congrats you have a program of great harm, revictimisation, delivered at great cost. Ever thought that perhaps the existing services going unfunded who are not run by those with violent and fraudulent present behaviour should get at least a cent in funding by the government before the ones directly linked to causing great local harm to local families. You know to be fair and kind. Or at least do no evil for starters. The entire project is repeated and gaping ethics violations and direct harmful practice run by those who are not trained or registered for managing support work or therapy. But you cannot collect a large admin salary and funnel money to private assets with the trained therapists already charitably provided in the community.
It’s a fact, all right. Too many government initiatives of the past few months have been poorly thought out, and don’t pass the front page test. Mob gets millions for meth, $1billion dollar cycle bridge for yuppies, Tradies slammed with Ute tax, Govt locks up private farmland, Ardern backs end to free speech, Parker hints at taxing the dead.
You do know the money is not being paid to the gang, right?
You actually know the facts of the situation right, and aren't just repeating lies told by National party MPs?
Because you sound awfully like an uniformed useful idiot, repeating the lies of the National party. And they are lies.
Btw, one of the reasons the government signed the present deal is because National themselves pioneered a similar scheme when they were in government. It turned out to be successful, hence why the new scheme is in place. Of course you won't hear that from a National party MP either, since there like to lie by omission as well as by commission. Treat their voters like mushrooms - in the dark and shovel them shit.
Because adding $$ to the asset value to a gang pad owned privately by high level gang members is for the benefit of the community. Pull the other one it has bells on. They did not even have the bare minimum to hide the asset ownership they will be spending large $$ on under a trust or company name.
It would have gone far further to fund literacy and basic stem for prisoners to be empowered when they rejoin society to a better path rather than encourage gang drugs trade and gang violence. https://www.newshub.co.nz/home/new-zealand/2021/07/prisoner-educator-jo…
If you really believe all of that, I’ve got 100,000 affordable homes and a Skypath to sell you. Because police officers, through their
union no less, are disgusted and are calling it out for what it is: State sanctioned money laundering for the Mongrel Mob.
https://www.policeassn.org.nz/news/mongrel-mob-drug-rehab-funding-liken…
The programme is backed by the police.
https://www.rnz.co.nz/news/political/446977/is-labour-funding-the-mongr…
The police union holds many right-wing views and are generally 'tough on crime', so no, I don't really respect their opinion.
We can do a lot more to support and rehabilitate criminals so they cost us less monetarily and commit less crime, but the police union isn't interested in that approach.
Yes and the Ministry’s job is to simply enact the Government’s policy, which could be left or right, rehabilitative or punitive. Their views are no more objective than the Union. I do not disagree with your sentiment, but with great respect you are extremely naive if you think that gardening at the Mongrel Mob president’s house will reduce offending and/or drug addiction.
you are extremely naive if you think that gardening at the Mongrel Mob president’s house will reduce offending and/or drug addiction.
Sure, if you're going to characterise it like that, then psychologists just sit you on a couch and talk at you for an hour, clearly not going to help anyone's mental health.
And yet we know that's not what psychologists do, and the evidence is that the pilot scheme was successful, and so was the similar programme that National set up that ran for 8 years.
“ then psychologists just sit you on a couch and talk at you for an hour, clearly not going to help anyone's mental health.”
I’d much rather that - a common practice with trained professionals that works - than involve vulnerable people in fishing trips and walks with a Mongrel Mob president with active weapons charges and a former member with recent domestic abuse and alcohol abuse allegations. I don’t dispute we need creative solutions in this area, but I honestly don’t believe this will work out well. We will see.
https://www.newshub.co.nz/home/politics/2021/07/jacinda-ardern-points-t…
National had previously funded the Hauora rehab programme, developed by the Salvation Army and the Notorious chapter of the Mongrel Mob. It ran for eight years, but the Ministry of Health cut funding in 2017.
"It does look pretty obviously like a political manoeuvre when you have a programme from 2010 of a very similar nature funded and supported and now we see National in Opposition taking a very different view," Ardern said.
"Our position is, fund what works - fund what makes a difference. We know we have to address methamphetamine as a scourge in New Zealand."
There was also a pilot of the current scheme done in 2020 that was showing good outcomes, hence the full funding of the programme now.
Who shut down the superannuation fund? If it hadn't been shut down it's estimated to have been worth $500B today, and NZ would be one of the richest countries in the world: https://www.stuff.co.nz/business/money/300327451/the-worst-decision-by-…
Who ceased contributions to the superannuation fund after the GFC? If they had been continued, we would have made $12.6B more in investment returns as at June 2020 https://www.nzsuperfund.nz/nz-super-fund-explained/purpose-and-mandate/…
So in a nutshell, the bank economists forecast path for the OCR should see mortgage rates, sometime in the future, back to levels last seen as recently as October 19, when they were at historical lows. The average 35 year old first home buyer, will look at the average nationwide rent of 25000 per annum and make a choice of averages..
The party's over for NZ...the RBNZ can take rates negative (which they may be forced to do further down the line) but the reality is that too large a proportion of the spending public already have little or no discretionary spend and that will drive wage inflation, emigration and defaults.
Credit, cheap or not, has to be paid back and sooner or later ceases to be an option when you can no longer gain or service it.....we've passed that point.
Interest rate rises have been inevitable for a while, the whole world has been printing money and hoping.
Amazing that in NZ we were told the government couldn't afford anything then all of a sudden last year they decided we could borrow an extra $100b. Now they can't afford anything again..
Paying half the country to stay home for three months last year has to be paid back some how.
So interest rate rises are just the start. That will put the squeeze on mortgages and of course rents will have to go up. We know how over-extended people are, especially in Auckland. It will only take a couple of percent to see the shit hit the fan.
Wait til taxes start being pushed up. You think the "ute tax" is just an environmental carrot and stick? Like I said, government has to pay that money back some how.
NZ's economy is all out of whack. The continual push to lift minimum wages in a low productivity environment and covid labour shortages mean every employer is getting less bang for their buck. That is the fault of not producing enough high value goods and being overly reliant on cheap foreign labour for the past few decades. Anyway, prices have to go up or businesses will close. Pretty simple.
So what do we do? Batten down the hatches? Downsizing baby boomers probably the winners through all this, the ones who made a big profit on their Auckland homes and moved into the provinces, with leftover cash to be put in term deposits that will finally be worth putting money in again. So be it. It's all a game isn't it?
Not sure that will cut it - if we are relying on inflation to pay down government debt then you can be sure more and more salary and wage workers will wake up to the con job that is tax brackets that don't move for a decade at a time. I'm sure many of us would like our living costs to be what they were when they were last changed, but that's not the case - and given that wages in NZ haven't got the best track record at keeping track with living costs, it's likely more and more Kiwis will just fall further behind. Not just blue collar workers, but white collar salaried workers too. They're not going to just cop that forever, eventually someone will have to come up with something else or risk being voted out - not that National can coherently argue the point at the moment, but still.
https://nz.finance.yahoo.com/news/zealand-inflation-surges-reinforcing-…
"We expect annual headline inflation to approach 4% plus by the end of the year, with the risk that high inflation outcomes persist well into 2022,” said Nick Tuffley, chief economist at ASB Bank in Auckland."
Many were raising question on defination / timeframe of TRANSITARY / TEMPERORY inflation ( should actually be one quarter or two or three or max four quarter to be transitory / temporary) - now we know that definately timeline of temperarory inflation as per Mr Orr for sure is more than 3 years, if high inflation persist even in 2022.
Now the question : Is the defination / timeframe restricted to three years or Mr Orr thinks bigger in larger perspective.....as it can be relative, if comparing with a century even decade will be transitory.
Come on, we've been on the bender much longer than a year. This is no all-night house party, this is the party that started off innocently enough amongst close friends while the flatties were away for the week. That was Friday - it's now Tuesday, you've been up for four days. Thanks to the super low Official Coke Rate, stimulation is abundant and freely floating around, by now your whole neighbourhood has crashed the party. You know it should stop, but you're hopelessly addicted and can't bring yourself to kick everyone out. Just. One. More. Night.
Will RBNZ raise rates soon? They seemed to indicate they had a tolerance for an expected temporary inflation overshoot this year. They have already taken away the QE punch bowl and could also call last orders on LSAP before moving the OCR. Also we aren't actually back at full employment yet.
In their position I'd wait until December when the vaccine is scheduled to have been fully rolled out mitigating the economic risk of Covid-19. After all that was the whole point of this tsunami of liquidity unleashed upon markets.
Housing policy has meant to be mainly about making housing more affordable.
Many comments have been made about how interest rates are a key component to making that happen.
Lower interest rates have been promoted as the 'way' to make this happen but these have only happened for a relatively short period of time and these same lower rates have helped forced up the price of housing, negating any lower interest rate benefit.
However, If higher interest rates cause house prices to fall, then if this also makes housing more affordable (in the cost of purchase), then the same benefit can be claimed.
The logic would then follow that we should raise interest rates just high enough to cause the biggest fall in house prices, to get the best affordability payment ratio between the higher interest rate and lower house purchase price.
Aoeteoroa Economics 101 : " Staglation " .
" Stag " the housing market by buying & borrowing to the hilt .... to the hilt & beyond ... take borrowing into the hilterland ...
" Flation " ... wait , just wait a weekend or two & you'll flip those houses for gains of many hundreds of $ thousands .... flated yourself into a fortune: You're rich ! .... easy freaking peasy , bro .
" Westpac economists are now picking THREE OCR hikes before the end of THIS year, giving an OCR of 1% by Christmas."
If this has any resemblance to reality then RBNZ should not follow the Don Brash recipe of lifting by 0.25% at a time. Don Brash agonised and rung his hands over these 0.25% increases and when nothing really happened increased another 0.25% and went over the same agony and hand wringing again until the final increase over months reached 0.75%. It might have even been a 1% increase over time. If you need to whack a big problem don't fiddle around the edges.
The OCR being hiked to 1.75% by November 2022 is way too optimistic.
If Orr does not act aggressively now to raise rates (and he will not do it, given his incompetence), he will be forced to raise the OCR to at least 2.5% by end of next year, if inflation takes hold. I hope I am wrong, but any analysis of the recent inflation data points out to inflation not being transitory nor limited to only some sectors.
Which will then put the brakes on the economy and force him to lower rates again.
I can see in the future the typical seesawing caused by an incompetent and reactive central bank - Orr should have never pursued this over-reckless ultra-loose monetary policy in the first place, and now NZ will have to pay the price for the RBNZ mistakes. One of the main reasons why we are now in this almighty mess, why we have a totally unbalanced economy with an over-inflated and fragile housing Ponzi, with growing inflation and increasing social disparities, is the short-sighted conduct of the RBNZ.
It is time to sack Orr and put in charge somebody who is competent and strong-willed enough to take stock of reality and take the appropriate actions, such as immediately raising the OCR to 1% next month, which would after all only represent a reversal of the Covid-related loosening, reversal whose excuse is becoming increasingly impossible to justify.
RBNZ independence does not mean RBNZ lack of accountability.
"NZ will have to pay the price for the RBNZ mistakes."
WRONG
NZ will have to pay the price for Mr Orr's mistakes. When decession taken by Mr Orr effects the life of so many individual and families their should be some personal accountability and not just resignation or been kicked out.
The music is stopping and the hangover from the massive printed bender is upon us. David is right. Any increase in rates from today's level is almost logarithmic.
Options. Stagflation and the over leveraged will be very vulnerable. Hyperinflation and the leveraged are bailed out at everyone else's expense, especially that of the retired saver and wage based worker, which last time I looked was Labours core voting block.
It is amazing to me that Labour appear to be favouring the risky speculator over its wage based voting base. Clearly our chardonnay socialists are National lite....very "Rose".
Most wage based workers either have a mortgage (in which case hyperinflation could be great!) or have very little in savings (generalisation of course).
I’m keen for a bit of hyperinflation, but maybe I should have fixed my mortgage for longer first.
Out of interest why do you think Labour are the cause of inflation? Last time I looked they instructed the independent reserve bank to keep inflation between 1 and 3%. And they also seem to be creating it in the US, that’s impressive.
All good but reliant on one assumption...your employer increases your wage to keep up.
If they cant its stagflation. Most employers wont be able to keep up so jobs go when they try, and then companies go broke resulting in loss of jobs. Wage earners end up getting crushed in the transition of rising everything but their wages which is why it's the worst outcome.
Hard for the debt reliant to survive in that environment.
Be careful what you wish for. Hyperinflation is not something only causing higher living cost but also something would bankrupt companies, which result in a crash for our economy. Many people would lose their jobs, mortgage sale could be everywhere, banks might go bankrupt. I dont think you want that happen.
The leveraged will be bailed out, at any cost. I am as certain of that as it’s possible to be in human affairs. Rates will not be higher a year from now. If they are at some point, and the housing market falls say 10%, the response will be ‘we’ve gone too far!’ and they’ll immediately be cut again.
"Again assuming it's all passed on to mortgage rate rises, it would give our FHB a mortgage rate of 3.7% (depending of course on when they fix).
Monthly payments would now be $2522 a month, some $441, or 17.5% more than they are now."
SUrely this is not a problem, after all the FHB will be stress tested to 6%?
Should be able to handle the mortgage payments doubling surely.
Unless of course there's a few porkies in the documents, nah that couldn't happen.
Is it a theory or reality :
Disco Inferno: The U.S. Could Be Headed Back to ’70s-Style Stagflation: https://bit.ly/3BfEqOG
Is it a theory or reality :
Disco Inferno: The U.S. Could Be Headed Back to ’70s-Style Stagflation: https://bit.ly/3BfEqOG
Is it a theory or reality :
Disco Inferno: The U.S. Could Be Headed Back to ’70s-Style Stagflation: https://bit.ly/3BfEqOG
Now experts have started to feel the effects of QE and monetary policy...adverse effect..
We should 'Freely Give" all Gangs, Non-Savers. poorly paid Spend Thrift Politicians and Public Servants, who think Money is printed into being and the more the merrier brigade to Finance Huge Debt to compete with the Bankers so we can keep the Party going, indefinitely so we have no Bankrupties other than those stupid Savers who thnk they are Saving us all from Total Anihilation in Total Exchange with Foreign Currency.
We may be able to Con-vince whatever is his name in Billion Dollar Tesla, Mirrofofti, Virgin on the Ridiculous that all our so Called Rich People that Space is the answer for ex-ponential "Growth"
A mere 5 minute trip for tons and tons of Oil, Gas, and making us Rocket into the Eternal Universe to fix our Debt for ever and ever...Amen.
Jacinda can Leas us all into Temptation by Financing the reform of a drug induced and reformative drug cartel and accompany The Mob into a :Free-for-all Debt induced delusional Blast into oblivion. These addicts can lead the Charge. and fly to the Far End of Humanity and all on Social Welfare. Why put them in Motels, Free Money should be used to Aid The Nations. Small time Savers are a waste of Time, Effort and Past endeavours. We should think Big, not rely on the Past.
Plus this would fix all ills, and we would never have to vote for an OCR as a matter of Interest will never be needed.....Ever and Ever Again.. And Cash can remain.....
.King Alter Ego....2021 July until I pass Muster........and true to my Word.
https://www.msn.com/en-nz/news/national/2-75m-for-the-mob-collins-takes…
It is Debaatable However...Ya thunk.
Meanwhile the PM threatens to block UK trade deal
https://www.express.co.uk/news/politics/1463270/brexit-news-New-Zealand…
Makes you want to become a digital nomad and work from anywhere in the world. Portugal and Mexico are 2 examples established in attracting nomads. What do we do? Everything we do and have done for decades has been around increasing house prices because quite frankly it’s all we know how to do. Can we attract the 20 and 30 year olds here? Probably not? Standard of housing too poor and far too expensive so they will continue to look elsewhere because there are much, much better places to go. Madiera, for example, has much lower cost of living, similar climate and looks like New Zealands little baby. Wake up New Zealand, we need to be attracting young people rather than pricing them out so that permanent OE is their only alternative away from their place of birth. The world financial system has been completely bug*ered following decades of deliberate debt fuelled unsustainable growth. The line has now become exponential! There is no going back. Individuals and governments have too much debt….. the system will break and WE will be left to pick up whatever is left. Young people are opting out with the nomad lifestyle and stocking up on gold silver and crypto. They know the system is broken. Meanwhile, we are distracted by all time highs in the worlds stockmarkes, real estate markets and a general belief that the FED/RBNZ has our back….. nothing will be allowed to fail……. Reverse Repo’s nothing to see here! The system is near breaking point but few seem to realise.
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