2023 was a second consecutive year where we have finished in better shape than when we started ... which must be something of a surprise to those with a DGM outlook.
This isn't something unique to New Zealand - apart from Europe, this is a worldwide thing.
But that is not to say, all is well. It clearly isn't.
But basic psychology teaches us that we generally prioritise risk aversion over risk taking. And that is more than a 2:1 aversion, more like 3:1. See Kahneman. Or Coates. Or a whole bunch of basic research. That is why those that see risk and reward in a balanced way end up with the spoils.
If you look ahead with 'fear' you are going to miss out in two years of three, or more likely three of four. And you will end up most years 'surprised' things turned out ok, happy to just accept the benefits built by risk-takers as 'normal'.
Sadly our tax system distorts this behaviour even more. It tends to push local risk-takers into chasing tax-free capital gains (like from houses) rather than into productive investment. It also pushes some of these risk-takers into high leverage situations, encouraging them to think they are 'smart investors' by using leverage (rather than from genuinely good ideas).
But this sector hasn't worked out so well this last year. Median house prices started the year at $790,000 after falling from $900,000 at the end of 2021. In 2023 those median house prices plateaued at $790,000 (November REINZ data). While they didn't fall, that was only because buyers pulled back sharply, and for a second consecutive year.
Despite that key corner of our economy being in a subdued state, there was progress in other areas. Inflation eased (although not as much as in other countries), the labour market stayed strong. Wages rose faster than inflation (ignored by most because that doesn't fit the "we are struggling" narrative).
Interest rates for savers took off.
Who would have thought? Certainly not most of those making predictions at the start of the year.
Internationally, globalisation reversed. China, 2021's big winner, stumbled in 2022 and rather surprising their command-led economy failed to fire in 2023. Only tight social control ensured there was no internal reaction. Meanwhile, the US rebuilt its strength.
Autocrats from Putin to Orban to Ergodan to Xi all seemed to make a mess of the empires they surveyed, all the while telling the world what a great job they are doing. They honed their skills further painting lipstick on a pig, locking up or eliminating their enemies.
We had a change of government, peaceful, orderly, a fair fight, and a messy result. But we will make it work.
How do you think our economy (housing, agriculture, tourism, education, to name the key sectors in decreasing size) will fare in 2024?
And don't forget your climate predictions. Pretend you are an insurer (or a lender).
Who will be the winners in 2024?
It is time to test your prediction skills and bravely record them here in the Comment stream below. (Sign up here.)
And of course there is the small matter of bragging rights on your 2023 predictions. How good were they? Here is a quick link to last year's set. More than 200 of you weighed in then.
This article is to encourage you to record your 2024 predictions.
Your predictions can be on any topic that has an impact on the New Zealand economy: anything, including property, interest rates, exchange rates, the RBNZ, insurance, rural issues, the dairy payout, our migration issues, our relationship with China, the big international economic influences, even the shifting international power balance, and the like. But please try to ground them in the economy. (For example fashion, sporting or celebrity comments are not relevant, but climate change issues certainly are.)
You will need to be logged in to comment and respect our commenting policies (and respond to others' differing views in a respectful and civil way).
Over to you.
241 Comments
If you think that BTC relies on the ETF for its price, then you don't really understand ratty. Not sure why people are so excited about the involvement of tradfi in spaces where they don't belong.
OGs don't really care about the fiat price (yes, I consider myself to be in this segment). But if price is your main reason to be interested, then I would stick my head out and suggest it should be closer to USD1 million right here and now.
Predict what you can:
- The probability of more people even owning a single Bitcoin will get lower.
- The diamond hands of the long-term HODLers will only get more irremovable.
Sadly our tax system…
Yep.
My loose prediction:
Recession as immigration drops, and unemployment rises.
OCR cut(s) about mid year, but this will take a while to get the economy going as this method uses the housing colander. Rates won’t be slashed (significantly, ala 2020)
The govt will backtrack on some (reduction in) spending and (reduction in) tax promises, the honeymoon will end and (increased) spending will be needed (more spending than projected)
Housing market flat-ish. Might drop and recover again.
Tourism will do mediocre, people closing their wallets means less trips to the bottom of the earth. Local tourism will pick up as fewer will go abroad.
Homelessness will rise.
I can’t pick our xrate. I thought we’d be lower by now, but the FED signalling cuts and actually acting on those may help us.
I think it’ll be a good year, but a tough one. Much harder than the last two, especially for retail, developers and the bloated RE industry.
Technology will advance with more/renewed interest in machine learning, and some business will invest here looking for productivity gains.
I hope everyone’s had a good 2023, we have. Looking forward to some (rare) opportunities next year.
A few inconsistencies there malamah, I don't think you need me to say which ones.
"Yep.
My loose prediction:
Recession as immigration drops, and unemployment rises.
OCR cut(s) about mid year, but this will take a while to get the economy going as this method uses the housing colander. Rates won’t be slashed.
The govt will backtrack on some spending and tax promises, the honeymoon will end and spending will be needed.
Housing market flat-ish. Might drop and recover again.
Tourism will do mediocre, people closing their wallets means less trips to the bottom of the earth. Local tourism will pick up as fewer will go abroad.
Homelessness will rise.
I can’t pick our xrate. I thought we’d be lower by now, but the FED signalling cuts and actually acting on those may help us.
I think it’ll be a good year, but a tough one. Much harder than the last two, especially for retail, developers and the bloated RE industry.
Technology will advance with more/renewed interest in machine learning, and some business will invest here looking for productivity gains.
I hope everyone’s had a good 2023, we have. Looking forward to some opportunities next year. "
It seems I don't do very well at these. Here are mine from last year and what was right and wrong:
1) National wins the election (with ACT). Ardern resigns after the election (but not before). Labour will poll as low as 23%. - Close but not quite. Polling low was about right though.
2) Inflation has peaked and will go downwards to around 3-4% by the end of the year. No rate cuts but a long pause. Close again - true in the USA.
3) 1 year fixed term mortgage will peak at around 6.5% (i.e. we are nearly there). TDs peak at 5.5%.
More like 7.5% / 6% so wrong here.
4) For global assets, bottom takes place in a few months. Rising gradually from there but not easy.
Nailed this one. SNP500 bottom was in March this year.
5) By end of 2023, Ukraine is the clear victor in the war, but some pockets remain. Putin is gone one way or the other.
Sadly not even close
6) ETH continues to outpace Bitcoin - it won't flip it this year but there will be talk of that.
Completely wrong - BTC trumped ETH. But other coins like SOL easily outperformed BTC
7) Coin base and Tesla will be up this year.
Yep - 400% and 103% respectively
8) 2023 will be (again) a cooler year than the one before.
Doesn't look like this will be the case
9) Crypto markets struggle but manage to erase the "FTX" fall and then a bit more. That puts bitcoin at around the $25k level. ETH to $1.5 to $2k.
Ha! Miles off (very happy with this one). I can't believe the current price but that was triggered by the ETF narrative and blackrock. But if ETFs are denied these prices are on the cards
10) Prediction markets will predict Trump as next President by end of year.
Yes - its amazing how each time they try to imprison or impeach him his popularity goes up
11) NZ property market bottoms and starts to recover. A bit down in price (0-5% fall before inflation) - but bolstered at the end of the year by the National victory.
Looks about right
12) Defi continues to grow with a substantial increase in TVL. I am thinking 50B plus TVL.
Going up indeed. Although only 15 billion.
13) The "monkey pictures" NFT market remains dead-ish. But large companies are going to be using NFTs for all types of things - loyalty points, collectibles etc. The key will be cheap or free NFTs. Nobody is paying $300k for a picture of a rock!
More or less correct as far as I can see., but it seems to be making a comeback already
14) A big election issue will be the plight of first home owners underwater as mortgagee sales will ramp up.
Not really - but I imagine this did influence the vote
15) The biggest theme of new technology and everything will be AI. Expect this to be the case for the next decade. Hard to tell how this works for an investor (maybe Chat-GBT can tell me?)
Definitely this one - look at AI adjacent stocks
16) Best investment "class" will be commodities. Bolstered as the economy starts to come online and gold and silver have a surge towards the end of the year. Energy stocks too.
Gold did well, but crypto came in front by miles.
17) NZ First makes it back (just) but sits on the sidelines. TOP has a surprise surge getting to around 3.5%. This is all at the expense of Labour.
Back in but obviously not on the sidelines.
Last year predicted the Greens would have a palace revolution. Came close. Next year it will recur and resultantly, the exit of Mr Shaw which will lurch the Greens even more far out, in left field. If the government can keep the coalition together this year it will prosper but if cracking starts appearing over policy and personalities, its chances of a full term will be thin.
Human affairs are generally too complex for making predictions, although I enjoy attempting to understand the larger trends of human history to interpret today.
Such trends include the repeating theme of human greed, the consistent boom/bust cycles of financial bubbles, the dangers of authoritarian regimes (and the consistent difficulties of them to give up power.)
One repeating trend that is of special interest is our difficulties in managing resources.
I think that our exceptionally heavy civilisational dependence on non-renewable energy sources (and how little of substance and long-term resilience we have to show for it) is quite possibly the most stupid action we’ve ever collectively taken.
The consequences could take years to play out, difficult to say anything specific to 2024. So apologies, it’s more a long-ish term concern than a prediction.
They're Hiding the Silent Depression That Did Happen
What we’ve instead seen is the public sector getting larger and larger at the expense of the private sector which cannot flourish in the post-2009 environment. There are simply too many constant “headwinds” starting with a monetary system and credit capacity that was never fixed from “subprime mortgages.”
The government takes on a larger share of economic activity and greater responsibility for redistribution. Both of those only make things worse. The poorest and those most negatively affected by the disastrous economy get hooked and can never come off. They often vote accordingly.
Bitcoin will reach and new alltime high on or just after Jan 9th 2024. (Some profit taking will will stay at the new rate all year)
The usual commentators will double down here on entrenched views re crypto
Black swan event mid year (probably a new War to add to existing wars - funded by more money printing to infinity)
NZ will meander along selling meat/milk and tourism with not much else to offer
Auckland inner city beaches will not be safe for swimming all year
The Auckland inner city beach prediction is a safe one. The gigantic $1.5 bln Central Interceptor project won't be fully completed until 2027, mainly because it is being extended at the north end. It is a project that started in 2019. Only when that is completed will those beaches become 'safe'.
The project was stalled when the contractors accidentally put concrete grout in the wrong hole. Only 2million kilos of it
Contractors accidentally pour 2000 tonnes of cement-like grout into Auckland water main https://www.nzherald.co.nz/nz/contractors-accidentally-pour-2000-tonnes…
My prediction is that my general boredom with predictions will continue. Yes, I know - I have made many in the past. But better to think of scenarios and plan accordingly. The world is an uncertain and volatile place. I thought more than ever, but I read a good piece recently refuting that - the world has always been uncertain and volatile.
Happy new year.
True too. History is not short on what are our current affairs. What is different is the coverage, ever since TV took the Vietnam conflict into sitting rooms. From there and with the internet the media has exploded onto our lives with all the twists and turns, from every point of the compass, as attachments to many posts on here, worthy & wortless alike, confirm.
1. Inflation will remain sticky at around 4% for much of 2024.
2. In turn , mortgage interest rates will fall but only to about 6%.
3. House prices will recover only moderately. 0-5%.
4. Rents increase by 10%. Homelessness and social housing waitlist increase.
5. Despite all the talk of fiscal responsibility, the government deficit will increase. Tax cuts to be reversed in 2025.
Labour, having become even more frustrated and perplexed as to why things would not work as per the theory of their ideology, even when they had a total majority for the last three years, and along with the Greens and Te Pati Maori, will become more extreme(more illogical) in their rhetoric, before one/some of their supporters will translate that into a physical response and then claim as their defense that it was the words of the opposition that they are responding to.
Labour, having become even more frustrated and perplexed as to why things would not work as per the theory of their ideology, even when they had a total majority for the last three years,
6 years. They will never accept that they may be wrong or they failed. In fact, they're still patting themselves on the back for what they believe they have achieved.
If they accept any responsibility, they will point to Covid and 'external' forces that were beyond their control.
Russia will mount an all out spring offensive to secure the east bank of the Dnieper as far northwards as able . If they can’t or it fails, hard to predict what happens next except that the spectre of the previous failed military adventures of Khrushchev and Brezhnev will certainly start to shadow Putin.
Bitcoin and other cryptos will continue to be something to run a mile from
PDK (Chicken Little) will not change his tune (note to self: continue to avoid reading his comments)
House prices up 10%
OCR to be cut 75 points, but will be too little, too late
Exchange rate 65-70c
Rents up up up
House building to start to recover late 2024, but not enough supply to meet demand
Govt stumbles here and there, but overall do a good job, Luxon is a strong, disciplined leader
"Bitcoin and other cryptos will continue to be something to run a mile from"
I would say the increases this year show it is anything but (+170%, others are up thousands of percent). Best performing asset class for 11 out of 14 years ain't too bad. If the ETF comes in next week or two, I think you'll see a good year for 2024 also
1) BTC ETF approved next week. Price skyrockets into the low 50s, then retreats, then back up again once they go live. New ATH towards mid year - but crash going into the end of the year (say into the 30s?)
2) ETH ETF is next. ETH finally outpaces BTC this year, new ATH and to around 7k at peak (again mid year)
3) Labour will poll in the teens, Hipkins is out, Kieran takes over
4) Trump wins the election - he starts planning his revenge pretty soon after.
5) NZX actually has a good year.
6) Argentina has one of the best returns in terms of its sharemarket (and economy generally). Only beaten by El Salvadore in the region
7) We get a couple of interest rate cuts. USA ends the year with inflation down to 2%. We are closer to 3.5%
8) House prices are back up - say around 8 percent. But investors are not that interested, as such rents go up another 10%
9) In the markets tech stocks are the winner. Great year for COIN and the magnificent seven. QQQ is up 30-40%
10) There will be a major AI concern or danger, sparking talk of regulation. Deep fakes / fake nudes are a concern but this one is more dangerous
11) Expect some tax raises (or pull backs of tax promises) in NZ has we rapidly realise the cupboards are bare. I am guessing excise tax on vaping for one
12) Towards the end of the year there will be some kind of resolution / settlement in Ukraine - not sure to whose favor
13) Hamas are mostly wiped out and Israel takes control. Many of the hostages (mainly female) are never found.
14) Cost of owning a host goes up dramatic, except interest rates which back down to just below 5% end of year
15) Gold and silver have a great year
6) Argentina has one of the best returns in terms of its sharemarket (and economy generally). Only beaten by El Salvadore in the region
If Milei pulls off dollarisation I expect Argentina will do very well indeed in coming years. Probably time to register Interés.co.ar
However I think the fastest grower will be Guyana because of the recent sweet oil finds. It will become the UAE of South America assuming it can keep the Venezuelans from invading. Per capita their oil reserves now are colossal.
"Pretty safe prediction"
That was kinda my point.
I may be wrong but aren't cyclones less likely in an el nino period? To do with where the highs sit
Likely El Nino peaked already? So will be a stretch to be warmer next year?
http://www.bom.gov.au/climate/enso/indices.shtml
My prediction is global greening will continue; the Arctic ice won't disappear; we will have record cereal crops again plus record oil, coal and natural gas consumption and production. Air pollution will continue to fall. Price of Uranium will go up and NZ's record excess deaths won't drop below 10% but will hopefully drop below the current 14.5%(!).
Chicken Littles will continue to wring hands and lecture people in the comments threat. Hopefully there will be no lynchings at the Profile house.
https://ocean.dmi.dk/arctic/meant80n.uk.php
https://www.fao.org/worldfoodsituation/csdb/en/
https://www.miragenews.com/foulden-maar-research-points-to-a-future-glo…
https://ourworldindata.org/explorers/air-pollution?uniformYAxis=0&count…
https://stats.oecd.org/index.aspx?queryid=104676
There's a chance you could be hit by a bus every day you cross or walk next to a road. Chance you'll have a heart attack as a fit person at the age of 45. Numbers can be useful, but if you pay too much attention to every statistic you will never leave the house. Life is a cycle and death be a part of it.
You mean this? https://ourworldindata.org/excess-mortality-covid
profile,
For instance, a greener world is consistent with, although it does not fully explain, the fact that land plants have been removing more CO₂ from the atmosphere, therefore slowing down the pace of global warming.
But don’t get your hopes up. We don’t know how far into the future the greening trend will continue as the CO₂ concentration ultimately peaks while delayed global warming continues for decades after. Regardless, it is clear that the benefits of a greening Earth fall well short compared to the estimated negative impacts of extreme weather events (such as droughts, heat waves, and floods), sea level rise, and ocean acidification.
Humans have shown their capacity to (inadvertently) affect the word’s entire biosphere, it is now time to (advertently) use this knowledge to mitigate climate change and ameliorate its impacts.
Pep Canadell, CSIRO Scientist, and Executive Director of the Global Carbon Project, CSIRO and Yingping Wang, Chief research scientist, CSIRO
This article is republished from The Conversation under a Creative Commons license. Read the original article.
So, here I agree with you; the world is greening and with ever increasing CO2 in the atmosphere, that is not entirely surprising. Whether or not 2024 brings record global temperatures is irrelevant, the trend however is all too clear. Of course Arctic sea ice will not disappear this year, but again the trend, now decades old, is clear.
On fossil fuel production, like you I expect this year to see record figures despite all the COP 'promises'.
Domestically, I expect the first interest rate cut to be in the autumn.
Pollyanna Profiles predictions are pretty safe. Totally lacking any depth of intellectual rigour. I predict Pollys predictions will be recycled next year and so on, until TSHTF, then his job will be done and Polly will disappear like the mirage of his alternative universe.
Not sure I will be able to beat the accuracy of my 2023 prediction (will post in reply) but here we go:
OCR: I still think the first OCR cut will be 10 April 2024, with bigger cuts as shocking data continues to pour out (more below). Outside chance of a reduction on 28 Feb 2024.
Economy: Unemployment has cut loose and we are in the job losses > reduced local demand > job losses doom loop in many areas of NZ. The data through Feb and March will be awful and Govt will be forced into higher welfare spending - opening up a bigger gap between forecast revenue and expenditure (accom supplement is already busting out above forecasts).
CPI: 4.5% for Q4 - dragged down by petrol, international holidays, food etc. CPI will come down quickly through 2024 as imported goods are already back to 2019 prices and lower interest rates will reduce business costs (and might stop as many going bust).
Govt Spending: The new Govt are small state ideologues and they will respond to the growing recession by cutting spending - the absolute worse response imaginable. As it becomes clear that the NZ economy is an outlying poor performer, the Govt will have an existential crisis in mid-2024. Their response will be to go hunting for expensive private finance to invest in infrastructure (in ways that avoid the debt going on the Govt books). This will take too long to set up, which is why I think 2024 will be an absolute shocker.
Politics: Govt will rush through major cuts to the public service (billions) in the next 6 months as they try to deliver their budget promises and deliver against the Act / National coalition agreement. Willis basically announced this in the few days before Christmas but the media was asleep. Regardless of whether you celebrate or commiserate the loss of services a, b or c, the cuts will add fuel to the recessionary flames.
Housing market: Minor OCR drops will have a muted effect on house prices, which will continue to bump along at around 5% year-on-year growth. But as the end of the year nears, with mortgage rates back down in the late 4s, investors might push prices back up more than that.
2023 predictions...
- Oil prices: The oil price is the key driver of prices throughout our economy - petrol, diesel, fertilisers and plastics (and therefore food, transport etc). In fact, there is no better leading indicator of inflation in NZ than oil price (WTI Crude particularly). I suspect that the Saudis will hold the price between $70 and $85 (low enough to stifle non-OPEC development, high enough to coin it in), but we will see a fair few destabilising swings in and outside this range depending on what happens in Ukraine. [correct]
- CPI: My view is that NZ CPI will come down from 7% this quarter to around 5% in mid 2023 and be around 4% by year end [correct].
- Rent will come down to just over 3% by year end [spectacularly wrong - didn't think immigration would boom or that landlords would be able to pass on cost increases so quickly]
- Shock and Orr - What RBNZ do with interest rates will have almost zero impact on inflation. Our central bank is just trying to maintain its credibility amongst other people who place their faith in the false gods of reckonomics. I suspect that RBNZ will just keep our interest rates above the US Fed's given that we have a huge trade deficit and we are relying more and more on relatively attractive bond yields to support the NZD [correct]
- Recession: Govt net spending is dropping, and I think we will see more loans paid off then are taken out in Q1 2023. Tourist spend is about halfway back to normal, which is giving us a small bump, but we are stuffed here. If Govt is not spending more than it is taxing back, and banks are creating less credit money than loan payments are destroying, then this inevitably leads to a contraction. Recession in 2023 is locked in unless Govt decide to go serious on green investment (they won't because they are all mouth and no trousers) [correct]
Saudi isn’t controlling the oil price, it’s shale oil producers in the US that determine the price.
I agree with your inflation predictions of 4%. Now that the govt has pointed the reserve bank only at inflation they will be forced to keep interest rates higher for longer. At some point the National Government will recognise this isn’t great for them as New Zealand slips further into recession.
Shale definitely has more of an impact now - but these predictions were at end of 2022 when Saudis were firmly in control. I still think they will have majority of control this year too - they are the marginal producer and they can make money at prices that Shale bleeds out at.
I agree with most of your predictions although barring an unforeseen event I doubt there will be any rate cuts until August. The way Orr is still a posturing at the moment it's going to take some persistent negative data for him to change his tune.
I'm hopeful the government will deliver on their promises of spending cuts to help lower inflation so home owners and renters alike can enjoy a reprieve on rising housing costs. I would rather see lower economic growth and an all out attack on inflation at this point.
Spending cuts will lower demand in the economy, and lead to job losses across the public and private sectors, but it is dangerous to assume that reduced demand will slow inflation.
If a town has two shops and one closes, do the prices go down? If more people are desperate for crap work, will that reduce the minimum wage? Won't businesses with market power just protect their margins, reduce costs, and settle for lower sales volumes?
The great deflationary crash of the 21st century as 1.4 quadrillion USD of global credit derivatives unwind. It will happen quick and probably after big misses on U.S earnings for the 1st quarter of 2024. The silent generation are the only ones alive who would have experienced what 2024 to 2030 is about to dish up. I hope everyone has planned accordingly.
Trumps dementia will become more and more obvious. He thinks that in 1776 the US militia soldiers closed the airports... "Trump praised the Americans’ military efforts in the war against Great Britain. “Our army manned the air, it rammed the ramparts, it took over the airports, it did everything it had to do, and at Fort McHenry, under the rockets’ red glare, it had nothing but victory,”
He will be forced to pay E Jean Carroll tens on millions for defaming her, will be severely penalised in NY for committing fraud. Be found criminally guilty for his J6 actions and be sent to sing sing
His supporters, mainly old folk will continue to go to rallies for the next twenty years
Trump will appeal all cases and/or convictions to the SCOTUS and thus his handpicked conservatives. That will leave him technically unencumbered, free to stand for the GOP so as to fill all the troughs, for their snouts at the ready, on assuming the presidency once more and whereupon, Trump will pardon himself for everything in sight, past, present and future. Can’t say the man doesn’t have a plan. Coming ready or not!
Didnt the Colorado supreme court made up of 4 republican appointed judges all vote in favour of upholding the Colorado district court decision to take trump off the ballot
Alot of Americans think its a witch hunt but isnt that because trump says so. Ask them some questions and you'll find they swallow whatever the Don says
Trump will likely be elected president again by a handy margin. He has a plan, and he ain’t Biden, and those are two things Americans will vote for. Colorado and Maine don’t matter, they are heavily democratic states. If safe republican states were banning him then that would be an issue. This ban trump is just another way of cheating. It’s not going to work and most likely will be thrown out by the SCOTUS so he will be on the ticket in thise two states anyway.
Didnt the Colorado supreme court made up of 4 republican appointed judges all vote in favour of upholding the Colorado district court decision to take trump off the ballot
Don't know the political affiliations of the Colorado Supreme Court members or who voted what, but the result was 4-3 so not unanimous
Ironically it was the 4 republican appointees that voted in favour. The 3 democrat appointees voted against, I dont know why. Apparently all agreed it was insurrection
The US is steeped in democracy since the days of the pilgrims 400 years ago, I would be amazed if Trump gets away with what he's done. The backgrounds of prosecutors Jack Smith and Fani Willis are impressive. Fani was sworn in as DA on 1 Jan 2021 and Trump made his famous "beautiful" phone call on 2 Jan 2021. Someone said she is born for this time
OMG. I had to fact check that one it was so out there! But yes, he said it back in 2019 in his 4th of July speech while President. He explained later, "the teleprompter went out". OMG.
https://www.youtube.com/watch?v=PejFLQ1ZxNA
Trump needs someone or something to blame lol. I first heard about it because of joe rogan claiming that Joe Biden is a blithering idiot. Then rogan realised that it was actually his revered trump so he dismissed it and moved on.
American politics is weird that one party wants to be able to kill innocent babies before they leave the womb. The republicans, want to retain their guns and kill innocent humans later.
Here is a prediction or two from me;
House price falls by way of (HPI) measure will once again resume during April and be reported in early May. Aided by the restoration of Brightline to two years, rising unemployment, the continued intensification of financial stress and more financial nightmares reported in the media, sellers will feel more motivated and therefore realistic in their expectations and buyers ever more cautious. Selling pressure will be somewhat more intense and endure well into the following Summer.
Oil price will rise to USD 100-110 PB by June on clearer evidence there is a widening middle eastern conflict (disruption to shipping lanes). This will assist inflation to remain frustratingly elevated along with wholesale interest rates. A credit rating downgrade by years end will also be supportive of higher for longer interest rates, if indeed it (a downgrade) happens. Then there is our bloated Current Account Deficit we rely on the rest of the World to fund. Knowing how housing centric our economy has become, this could be the year foreigners tolerance of such is tested.
Immigration will start tracking down along with a steadily rising both public and private sector joblessness. Rents will start tracking down in Q3 2024. The contraction of Government spending (debt prudence) may prove temporary as the recession intensifies causing further borrowing just to keep the lights on.
The RBNZ makes the first OCR cut in Q3 resulting in serious selling of our currency and therefore intervention to support it - (and I think they are already preparing for it). This will provide little relief to the many mortgage holders who are mostly on fixed.
Let's hope I'm proven wrong.
I wish everyone a prosperous 2024 :)
In summary then:
House prices, interest rates, nz dollar, immigration all down (though also says that interest rates are higher for longer)
Unemployment, Oil price up
Wishes everyone a prosperous 2024
Im not sure that makes sense Mr Poppy.
"by Retired-Poppy | 31st Dec 23, 11:48am 1703976537
Here is a prediction or two from me;
House price falls by way of (HPI) measure will once again resume during April and be reported in early May. Aided by the restoration of Brightline to two years, rising unemployment, the continued intensification of financial stress and more financial nightmares reported in the media, sellers will feel more motivated and therefore realistic in their expectations and buyers ever more cautious. Selling pressure will be somewhat more intense and endure well into the following Summer.
Oil price will rise to USD 100-110 PB by June on clearer evidence there is a widening middle eastern conflict (disruption to shipping lanes). This will assist inflation to remain frustratingly elevated along with wholesale interest rates. A credit rating downgrade by years end will also be supportive of higher for longer interest rates, if indeed it (a downgrade) happens. Then there is our bloated Current Account Deficit we rely on the rest of the World to fund. Knowing how housing centric our economy has become, this could be the year foreigners tolerance of such is tested.
Immigration will start tracking down along with a steadily rising both public and private sector joblessness. Rents will start tracking down in Q3 2024. The contraction of Government spending (debt prudence) may prove temporary as the recession intensifies causing further borrowing just to keep the lights on.
The RBNZ makes the first OCR cut in Q3 resulting in serious selling of our currency and therefore intervention to support it - (and I think they are already preparing for it). This will provide little relief to the many mortgage holders who are mostly on fixed.
Let's hope I'm proven wrong.
I wish everyone a prosperous 2024 :) "
1. Precision Fermentation really gets going in the dairy protein segment for the dairy ingredients industry and the price of fermented dairy protein becomes cheaper than cow protein. This business has nothing to do with consumer perceptions and is driven purely by cost of production of processed foods. This makes up about 30% of Fonterra sales. It finally dawns on NZ that our dairy industry is toast, vastly overvalued and farm prices will plummet.
2. NZ will continue to fail to reduce CO2 emissions at the needed pace and as a result offsetting will be our only option. Vast areas of sheep and beef hill country (and unprofitable dairy farms) will continue (at an accelerating pace) to be converted to plantation forestry - with all the resulting bad side effects. Natives are just too slow at absorbing carbon.
3. Trump is reelected.
My talk of precision fermentation has been falling on deaf ears the last 2 years. It is difficult for me to fathom how something that is going to affect us so structurally goes unnoticed, by farmers, the banks that support them and our entire government. If anticipated surely opportunity opens up elsewhere that isn't just a tree, or at least a pine tree.
No argument around sheep and beef. But if you can brew milk at little impact to the environment it will have to be seriously considered, it is apparently genetically identical. Fish however might be a different story, micro plastics and Japan dumping water from Fukushima could change peoples minds, we can't all live on Alpine Salmon.
Here are my predictions:
Sticky inflation requiring elevated interest rates (edit clarifying I mean NZ here - US inflation rates will continue to fall).
And economic recession.
Net migration down to 50k.
Fractures in the coalition as it becomes surplus in 2027 or tax cuts.
Cuts to front line public services - particularly health funded below the rate of inflation.
Electric cars and renewable energy go from strength to strength while New Zealand looks backwards.
Oil prices continue to languish as OPEC has lost control of supply.
Stock prices hit new record highs.
AI underperforms expectations as the limits of LLMs become apparent.
Sadly the Ukraine war drags on with minimal change into 2025.
India, Mexico, and Vietnam continue to do well as supply chains de-risk from China.
1. Luxon will take a trip to turkey and come back with a pony tail and a six pack. Press will haul him over the coals as it will be tax payer funded.
2. Nicola Willis will buy a fleet of Toyota Corrola ferries. One will sink, and the rest will prove to be unreliable.
3. David Seymour will come out of the closet.
4. John Key will take a job working for the Chinese government.
1. I predict the backlash against 'woke' ideology will continue to rage across the English-speaking nations. The Democrats will struggle to retain power and quite possibly lose. In the lead-up to the election, more corruption and malfeasance of the govt and 'deep state' will emerge. People on the inside will be terrified of being made a sacrificial lamb to protect the ruling elite (includes NZ). Hunter Biden will not be held to account in any meaningful way. Details from Epstein's black book may emerge but nothing will be done.
2. The NZ wingnut govt will disappoint and Team Cindy's loyal followers will lap it up. Most of the political arguments will be inane, shallow, and short-sighted. Those inside the public sector will be paranoid about losing power and their personal fiefdoms (or position in those fiefdoms).
3. Official data may show inflation easing, even though the general population's purchasing power will be worse than it has been for 2022-23 (in fact, worse than it has ever been). The only retail businesses that will be able to grow or increase profits will be those who can maintain volume / value share. No new grocery retailers such as Aldi will consider entering the NZ market.
4. Gold demand will remain high in Asia and the Western financial institutions will be tested in their ability to manipulate gold markets and prices. Asians will continue to value gold as a store of value and as a form of money. The Anglosphere sheeple will continue to ignore it and continue to hurtle down the road to destruction in their bubble economy paradigms.
5. The Fed will pivot and end quantitative tightening. This will depend on the health and strength of the labor market - lagging indicator.
6. Of the FTX client money lost (USD8 bio), USD100 mio was stolen to give to US politicians. The US Govt will likely not clawback the politicians for the victims.
Some of this seems pretty simplistic.
Interest rate cuts by mid year
Unemployment up, Immigration much lower as a result.
Oil lower, petrol prices stay much the same.
Housing stable, small rise on average with the odd surge followed by an ebb (saw this last year when Orr said no more rises)
Tourists return in numbers.
NZX has a stellar year on mediocre company results as people see TD rates starting to head south with the expectation 2025 will be a winner for all.
I'll start with my predictions of last year:
For 2023 I believe there will be a stronger slowdown than many think and that the "soft landing" will be much harder than anticipated but this will not happen until the second half of 2023, I think most underestimate the lag between policies (such as interest rate hikes) and their effect on the economy.
Maybe I underestimated the lag between interest rate hikes and their effect on the economy myself, as I thought that NZ would be suffering more by the end of 2023, although we don't have Q4 data yet.
For 2024, sadly, I see more pain than in 2023. I think business failures will increase, unemployment is also going to increase, so is homelessness and I certainly see a negative GDP per capita for several quarters, so a technical recession. This will lead to the RBNZ lowering the OCR, probably in May. Inflation will keep coming down but will fail to reach 2% and will at best, in my opinion, drop to 3%. I have long said that I think central banks worldwide will have to accept to live with higher inflation rates of perhaps 3-4%
Housing is more difficult to predict, because huge immigration and more property friendly laws by the new government should normally provide a lift in sales and prices, but there are huge unaffordability issues because of the high interest rates, so I think prices will be mostly flat but rents will continue to increase.
Best wishes to all Interest readers for 2024.
My 2022 prediction was:
The S&P500 index will be lower at the end of 2022 than where it starts.
Obviously it did end lower.
My 2023 prediction was:
The unemployment rate in New Zealand will not exceed 4.2% in 2023.
As we are currently at 3.9% unemployment we have navigated that hurdle.
My 2024 prediction is:
The S&P500 index will underperform US inflation + 2%.
1. Crime won’t improve. Expect more violence.
2. NZ weather remains crap.
3. Equities flatish.
4. TDs somewhat attractive
5. inflation drops but stays over 3% 12-months from now.
6. Good bye Chippy.
7. Ardern relocates.
8. Winston has a heart attack.
9. I’ll struggle to run a sub 6:10 mile
Predictions 24.
1. Interest rates and OCR will stay more or less where they are. Spec crowd rolling off 5 yr fixes make lots of noise.
2. The carnage left by the left is worse than expected. Tax cuts are delayed as a result.
3. China accelerates it launch of alt currency #notUS$
4. Biden is clearly identified as medically unfit to do the big job.
5. Unemoyment picks up. Middle gets further squeezed by inflation as they can't hold employer's hostage as they last two years.
6. Construction sectors slows big time. Another generation of young tradies flees westward. Just like the GFC.
7. Young Drs and educated mobile people also continue to flee west. If you need hospitalization hope your drs medical skills are better than their english.
8. Cash outflows from major US banks continue. More banks fail in the US. Still no one cares.
Leaving this comment largely for myself:
- China's woes will become more apparent. There won't be panic yet but its economy will surely struggle and you'll hear more talks of their real estate businesses
- Middle East war will affect supply chains which will ring 2021 all back again. Inflation staying higher internationally due to this
- Oil prices up driven by Middle Eastern interests, esp. Iran
- Ukraine war will stall due to increase use of drones. No end in sight, Western supply still dismal but not enough for Putin's army to break through
- Worldwide: "recession" will become word of the year, happening in most of advanced economies, albeit by slight margins
- Back home inflation will persist
- House prices won't matter as much as the gaping hole between supply and demand, with lower and lower sales rates. Tapered by government intervention the market will maintain a semblance of resilience, i.e. there will be two or three bumps touted as return to stability
- If AI will gain adoption due to more perceived reliability it'll be via an Open Source model or via Google, but not OpenAI; most likely looking at 2025 for this one
- Flying taxis or the like will make a timid commercial appearance somewhere in the world (looking at Paris or Dubai). Some will shrug them off but talks of disruption will accelerate towards the next year and following
- Yes, climate will get crazier. Northern hemisphere will see some unusual deadly climate events and weather here will be unsettled as well
Auckland property prices will continue to rise. Lots of immigration, inflation, more red tape than ever after the floods and expensive building materials. Not exactly brain surgery this one. I'll make a killing.
The gold price will suffer as the new generation find more interesting investments.
Cryptos crash.
Global warming will finally be revealed as a scam and thousands of environmental scientists will be made redundant.
The Russian economy implodes and Putin comes to a sticky end.
The uranium price will continue climbing.
The gold price will suffer as the new generation find more interesting investments.
Young people are not interested in gold. Neither are old people in NZ.
In fact, I would say less than 10% of people at your water cooler / neighborhood BBQ have any exposure to gold.
Gold demand mainly comes from Asia; the global South; and Western 1%ers.
'Getting rich' is completely different to owning gold as a store of value with no counterparty risk. You cannot state that the objective of owning any asset is about 'getting rich.'
And Buffet's opinions on gold are just that - opinions. Naturally gold has no place in BRK, even though it has an indirect stake in gold through Barrick.
XAUJPY is up approx 100%+ in the past 5 years. It will have likely surpassed most property funds or most property investments in Japan over the same time period. For ex, Nippon Building Fund (largest property fund in Japan) is down -12% over the same time period. As an aside, Smartshares NZ Property ETF is as bad as the Nippon Building Fund.
Therefore that debunks your claim about gold being inferior to property for the reasons you give.
Gold has no dividend which makes it a terrible investment for a start. More is being dug up each year, and new technology makes it easier to locate and excavate with massive diggers and trucks, satellites, aircraft, GPS etc.
Property has a dividend, property REITS are big business, the Aussie XGD gold index is down 26% since 2020...don't get me started or I'll write something akin to the Encyclopaedia Britannica about what an awful bet it is and the scamsters who promote it. Gold isn't consumed, it's 'stacked'.
Something 'stackers' never do is account for inflation....for very good reason.
the Aussie XGD gold index is down 26% since 2020
So what? XAUAUD is up 7-30% over same time period.
Property has a dividend, property REITS are big business,
Irrelevant. As I showed, gold has outperformed broad property funds over a time period. Therefore, to say property is a better investment than gold is subjective and not factually correct.
Gold has not outperformed property otherwise we'd all be renting houses and 'stacking' gold bars. Whether gold is up against a particular currency is irrelevant, anything could outperform the Russian ruble which is effectively worthless. Since 1915, gold is up 10,299%, the DJIA is up 62,793% and that doesn't include re-invested dividends.
Most countries don't own any gold. Canada sold all theirs after it was determined they could get better returns elsewhere, and the USA uses some of theirs as a very popular tourist attraction in downtown NY. The 8,000 or so tons the USA has might buy 3 or 4 warships.
Scoundrels like Peter Schiff and Jim Rickards make all kinds of extravagant predictions about gold, but none of them ever happen. Ask yourself why gold gets to about US$2,100 and stalls. Inflation-adjusted, (which goldbugs NEVER discuss) gold is declining. And of course. it has no return, unlike property or shares.
https://www.macrotrends.net/2608/gold-price-vs-stock-market-100-year-ch…
Inflation-adjusted, (which goldbugs NEVER discuss) gold is declining.
Well this is debatable. If you don't understand the declining purchasing power of fiat currency over time, then you don't really understand gold.
And one of the problems here is that I have the feeling you don't really understand what inflation is. It isn't the headline metric spoon-fed to you by officials and Granny Herald. That's just a price level construct.
Goldbugs ALWAYS refer to the decline in value of fiat currency. Who cares?
People should care. Because the decline in the value of fiat means the destruction of the value of people's labor. Sure you can argue that the boomers' assets are protected (and you can argue that the value of their assets hasn't really changed but the money supply has been distorted) and that they're at the end of their working lives, but you're looking at socio-economic decay for a good swath of other demographics and wider society.
I do agree that the hoi polloi should not own gold if they don't understand it or see any value in it. As for younger people, they may see the ol' rat poison as better suited to their need for a store of value.
The "destruction of people's labour"? How?
What socio-economic decay? Every generation says there's been economic decay. If you believe goldbugs from 30 years ago there'd be hyperinflation, economic ruin, gold would be US$100,000 and the USD would be worthless. Which just goes to show how badly informed they've been.
But as I always say, "there's one born every minute".
The "destruction of people's labour"? How?
Through the debasement of the fiat currency that labor is exchanged for. Good place to understand currency debasement and the destruction of the value people's labor is at the end of the Roman Empire. The Denarius was a gold/silver backed currency that the soldiers were rewarded with and was a means of exchange / store of value. The emperors minted millions of coins to cover expenditures by replacing gold / silver with worthless pieces of copper alloy with a thin layer of silver. By the mid third century, the Denarius had lost nearly all its intrinsic value. Inflation had sucked the wealth out of 99% of society and concentrated it in the hands of a few elites.
If you believe that currency retains its store of value property by perpetual monetary expansion, that's entirely up to you. But by any mathematical proof or historical observation, it's not reality.
Goldbugs love living in the past, if it isn't some nonsense about the Greeks in Lydia in 700BC, it's the Great Depression, which incidentally was greatly exacerbated by the gold standard. The Great Depression signalled the beginning of the end of the gold standard.
Gold bugs are always banging on about monetary expansion and money printing, but there's no hyperinflation which has been predicted many times by Peter Schiff. Living standards are higher than they've ever been in history, so we must be doing something right. They'd be even higher if wasn't for tyrants like dictators Hitler and Putin. And if a meltdown was to occur, why on Earth would I need a gold bar? I'd need shelter, food, land, transport, clean water, firearms and ammunition, not a piece of metal.
Gold bugs are always banging on about monetary expansion and money printing, but there's no hyperinflation which has been predicted many times by Peter Schiff.
Correct but that all depends on how you define 'hyperinflation'. Turkey, Lebanon, Argentina all probably have a different outlook on the destructive nature of monetary expansion.
Living standards are higher than they've ever been in history, so we must be doing something right.
Subjective. Depends how you define 'living standards'. Housing is a good example of this as it is the direct result / pure expression of monetary expansion / money printing and shelter is the lowest rung on the hierarchy of needs. People allocating more of their labor for shelter is not an example of higher living standards.
Turkey, Lebanon, and Argentina.....not exactly paragons of virtue when it comes to monetary discipline.
The USA is printing heaps of money...where's the hyperinflation? Proportionately, Japan prints more than any other nation on the planet, but inflation has only just recently nudged into positive numbers. The EU also prints proportionately more than the USA.
In 1820 over 89% of people lived in extreme poverty, today it's less than 10%.
Proportionately, Japan prints more than any other nation on the plane
Actually they don't. You have to understand the difference between base and broad money. The annualized rates of broad money supply increase per capita from 2000:
- United States: 6.2%
- Euro Area: 5.5%
- Japan: 2.9%
It may first pay to understand the concept of ledger 'money'.
When things are 'good', or operating without restriction, 'money' is almost infinite...but when things are not well (or perceived so), 'money' becomes restricted.
Which is problematic, especially when that 'money' is theoretically backed by assets.
And ultimately, 'money' is meaningless if the system(s) that surround it collapse....then the ability to seize and hold assets become somewhat more base.
It was the denarius (silver) that was debased.
The gold equivalent (Aureus) was relatively stable. In the Byzantine era it became IIRC the solidus. The poor were affected disproportionately as they may have received denarii but never the gold coins as the value was too high. The rich were immune……until inflation struck courtesy of one Emperor who I have forgotten upping production.
".......Indians love gold...why are they so poor?......"
Because their very valid view and necessity, determined by the history, is to have assets that are not under the control of anybody or any thing else, and very portable.
There are more things than strict investment returns wingman.
Being poor is good? Sorry, I don't get that. Gold isn't portable......try moving it from one country to another with X-ray machines scanning your bags, including checked luggage. Dogs can also be trained to sniff out out gold.
Gold certainly is under control, Indian customs and government are trying to check the Indian obsession with gold. It costs the Indian economy billions...and tens of millions of Indians are poor because of it.
The Indian govt. has tried to wean rural peasants off 'stacking' gold for decades....mostly without success
The ruling elite of India are big fans of gold. Nevertheless, India is a great example of how the great unwashed are oppressed through dirty fiat. But Indian people are not stupid. Not sure I could say the same about the suburban hillbillies of Nu Zillun.
There's no alternative to fiat money, and actually it's worked very well once the gold standard was rubbed out. Who could possibly believe that the world's monetary system could be based on a piece of metal...which most countries don't own.... it's absurd. 2/3% inflation is optimal.
Ever noticed that the sharpies that promote gold delete their previous predictions, and post new ones when the old ones fail?
There's no alternative to fiat money
Fiat is fiat. It is what it is. Gold is still money and obviously Bitcoin is too. Just a different form of money. Most people will only ever own fiat.
Most of the price predictions re gold are quite sober IMO. Gold 25x'd in the 70s - approx 9 years. No guarantee it will happen again.
F'more, gold has outperformed USD (cash) and US total bonds since 2011, even though the current bull market only started between 2014-16.
Gold is not 'money'.....it may have been hundreds of years ago but not now. Money is what you buy things with and carry in your pocket. Goldbugs always refer to 2011, the only time in history gold has beaten the DJIA, but that's fading as well.
Since QE gold can't break above US$2,200, absurd predictions by gold salesmen have proven unfounded, the USD has climbed, no hyperinflation, and claims of crashes, financial implosions and gold 'mooning' have proven to be nonsense.
'Money' is what's in your pocket to buy things with, or in your bank account.
That is fiat currency - one form of money.
People can buy things with gold and Bitcoin - medium of exchange is a property of money. Because you personally don't is irrelevant. In some jurisdictions, it may be illegal to use gold as a medium of exchange. But that does not mean it is not "money." You can argue that fiat is an inferior store of value compared to gold. SoV is also a property of money.
If anyone wanted to buy anything from me with gold I'd tell them to go away. Fraud, gold-plated lead, there's all kinds of scams, in fact I was stopped in London a few years back and offered some 'cheap gold', because the owner wanted the money for an airfare back to italy...a likely story. If gold is 'money', go to your local dairy and buy an ice cream with it.
wingman,
Global warming will finally be revealed as a scam and thousands of environmental scientists will be made redundant.
It is extraordinary what you can believe if you are determined to ignore the facts. It's called called confirmation bias and it can affect highly intelligent people. The basic science of global warming was established well over a century ago by such as Fourier, Tyndall, Clausius and Clapeyron and Arhennius. it's really very straightforward. The earth has a very thin blanket of greenhouse gases without which the average temperature would be not around 15C, but minus 18C. When carbon sinks like coal, gas and oil are burned, the blanket thickens.
'Experts' and scientists have made all kinds of absurd predictions over the decades, and I'll bet global warming's one of them. Tell us what happened to acid rain, running out of water and oil.
The climate is quite normal here, except last year was colder and there was more rain than usual.
Fundamentals could suggest that happens but while Govt. policy is to increase more supply, they can't do it and cause a drop, especially if the worldwide market fundamentals which they have no control over could cause it anyway, but leave a 'smoking gun' in the coalitions hands to make it look like it was totally their fault.
What they want to do is introduce policy that prevents any decrease or increase, ie stabilizes the price and allows wage inflation to devalue property prices in nominal terms and return property prices to more acceptable median multiple ratios..
I’m not sure it really matters what they want. We’re a small country in the middle of nowhere with no real industry to speak of. House prices have no business being this high here. It’s all just a tacit agreement to prop up the market via restrictive (and arbitrary) land use regulation. If the liberal wing of the Nats and ACT implement their supply focussed policies, there’s no way prices won’t fall
I've looked at all the coalitions housing policies and there are two issues still.
1) They are still wrong on some of their supply side theory definitions which means, inspite of what they say, it does not increase supply relative to demand.
And 2), some of their implementation wording is too loose and will allow some council, iwi, and landbanker and other bad faith actors to stime the implementation to always have more demand than supply.
Remembering if THEY cause house prices to fall in real terms, there goes a good portion of many home owners equity ie retirement savings, even bank equity risk margin for small business etc.
What they should be aiming for first is cross party support on the need to stabilise house prices.
Even Labour agreed to that, its just their understanding on how to achieve was wrong.
By mid-year it will become evident how bad this three way coalition’s performing in terms of the stated objectives. The economy will languish, unemployment to increase along with crime and homelessness. Despite these domestic setbacks NZ will be viewed as a safe destination and remain attractive to families relocating from overseas. A wave of defaults will panic the global economy but US government bail-outs will restore order as usual. Gold to briefly peak around 3300 US then back to 2000 US. China will threaten its neighbours but back down in the face of international strategic pressure. Who knows what will happen with the Middle East, it’s becoming an extreme humanitarian crisis needing urgent attention.
Good ole Tony A. , can’t help himself can he, haha
https://www.nzherald.co.nz/nz/nz-and-auckland-house-prices-what-can-we-…
2024 Happenings:
1: Major weather event in H1 in NZ - causing insurers to price premiums out of the reach of many. Under-insurance crises accelerates. This prompts banks to issue many borrowers with warnings, to fully insure or pay off the debt.
2: Inflation staying high in NZ during 2024, well above 3.5%.
3: Interest rates in NZ remain stubbornly above 5% through the year.
4: Another bad year for property (all borrowing/holding costs to become extreme) with another 10 to 20% decline. Thousands of distressed sellers exit at any price available.
5: Oil shoots well above US$110.00 as MidEast warring ratchets up.
6: Uranium/Gold will go further nuts, to the upside.
6: Trump wins US election in landslide and vows war on his enemies, domestic and foreign.
7: Putin will meet a highspeed concrete demise, not of his choosing.
We will certainly live in interesting times!
______________________________________
I love the other predictions sofar!
Banks will step up the war on cash by decommissioning more hole in the wall cash machines.
Road tolling /speed ticket efforts will ramp up aggressively
Food prices will continue to climb
Maori protests will become more prolific
China will make move on Taiwan
NZTA will reach the road to Zero when the planet explodes....lol
2024 will be the year of the bond market. Interest rates will continue to normalise, quicker than most have expected. Fear of 'sticky' inflation will give way to a realisation that long-run fundamental drivers haven't changed all that much. Neutral interest rate estimates will be revised lower, close to where they were in the before-times.
I hope (although don't necessarily expect) that our housing market doesn't get too far ahead of itself.
In terms of investment - the multi-year slide in bond prices looks set to revert quickly. I'm overweight fixed interest, but all new investment will be going into global stocks. My target for NZD/USD is 0.67 by end of year.
Predictions are like A...holes everyone has one. And with the way the world is you would be a fool to try and predict the day after tomorrow than for the whole year. The only predictions I make that I can't control is that the sun will come up tomorrow. And that Israel along with the US will take on Iran after Israel wipes out Gaza. Apart from that everything else is open to debate
The world is such a mess it gets more crazy every year. It seems we are spiraling to some sort of world wide catastrophe. The largest that we have ever witnessed. That could be any or all of the following
World war 3?
Climate catastrophe?
Disintegration of western democratic structures and violent uprisings in response?
But on a lighter note. The US elections. How can you pick an outcome. Anything could happen.
Liz Cheny decides the outcome????
Biden wins, the Republican senate refuse to ratify the result????
The Army stage a coup???
Trump is assassinated and die hard Republicans stage a violent civil war. Putin may even consider that is worth pursing??
Anything could happen???
You never read about in the media or hear these kind of predictions at the water cooler in Nu' Zillun. Just as well. It is the U.S., and of course, we're diffrunt in NZ and Australia, so it can happen there and here. This is DGM porn for commercial property and the banks.
"As we think about the office market, and maybe as a microcosm for the overall commercial real estate market, we think valuations are only 50% of the way through their declines,
Earlier this month, Capital Economics said office buildings still have another 20% price plunge ahead, adding that the overall peak-to-trough decline for US office values will reach 43% and that it will likely take two decades or more before they regain their early-2020 peak.
https://finance.yahoo.com/news/office-values-only-partly-decline-020359…
I predict multiple articles on this site about how it is harder than ever for FHBs to buy a home.
Here's my list from last year. I still think a lot of the bad stuff is coming.
2023 predictions
Q1 & 2 story will be builders going broke, moving to Australia, and leaving half-finished homes and financially devastated homeowners in their wake.
Q3 will be social housing waiting lists heading to the moon as investors give up and sell. Interest rates flatline and start to retreat, but only a little.
Q4 will be rents catching up with inflation, buoyed by increases in welfare and student allowances out by whoever won the election. Unless Luxon says something silly about abortion I think National will win and at some point Labour are going to fully realize the gig is up and go into some form of ideological meltdown.
Other:
1. I think National will reverse the interest deductibility changes and it will do absolutely nothing to house prices. The next property boom is 5 years of deleveraging away.
2. ComCom will continue to do nothing useful.
3. What excess rental supply there is will get hoovered up by mid year through a mix of housing being lost to AirBNB and social providers, building plummeting, people coming back etc. Prices wont change but rents will as they become the last to surf the inflation wave, supported by increased election bribes by a desperate Labour party. Risk to this is a surge in net departures.
4. Putin won't survive the year. I think he will be either assassinated or executed.
5. There will be another oil shock (death throes of the war) but it will be brief
6. We are going to see some big bankruptcies.
7. Flight costs will trend downwards overall as capacity returns.
8. Population will increase by more than planned as more Chinese opt out of central control.
9. Interest rates level off by winter, come back a bit but not much. This is based on the yield curves. I'm in the inflation growth has peaked camp.
1. 2024 to be the hottest year on record
2. Global emissions continue to rise
3. Oil demand increases at the same time as shale oil production volumes drop off leading to an increase in oil price.
4. The US dollar value drops leading the Fed to increase its debt ceiling to pay its bills
5. The price of gold will increase because of 3 and 4. Leading to more citizens to buy physical gold to preserve their wealth and beat inflation.
6. The Labour Party to add a wealth/land/Capital gains tax to its policies to win back popular support
Not sure what your driving at. Everyone's point of view has some personal perspective.
A wealth tax is majoritively a land tax as thats were most inflationary gains are. Labour leaders have choaked down the dead rat of a vote loser that is a wealth tax several times. The TOP land tax is a similar angle and its been a deat duck as well. Personally I'm in favour of the TOP policy but democracy again show it to be unwanted.
Accordingly regardless of ideology, why would the future be any different?
Happy to see how you see this differently...?
My predictions for 2024
1. The price of Bitcoin will peak between Jan-March 2024 then plateau after that.
2. The NZ sharemarket will peak (there may be two similar peaks) between March-May 2024 then plateau.
3. The average price for New Zealand real estate will peak around Jan 2025 then plateau.
4. General economic activity in New Zealand will be subdued in the first half of the year then may lift somewhat in the second part of the year with the rise in house prices but this increase will be limited by tighter fiscal controls by the national govt and a RBNZ fighting inflation when it should be fighting deflation.
5. Lack of decisive action by the US govt will mean conflict in Ukraine will continue and the Middle East political temperature will rise as resentment builds towards the US as it's one-sided policy favouring Israel continues.
I believe bitcoin to be a comment about fiat inflation and central bank bank behaviour. It is finite by design. According clearly shows the erosion of fiat thru printing. More less the same game as land speculation.
Is bitcoins price going up, or is fiat currency being eroded...?
"Go back 12 months and consensus at the water coolers was that it was going to zero."
Yes, and remember a couple of years ago that the consensus of many of the Bitcoin fans on this site was that it was going to $US100k by the year's end. Yeah, $64k was a great buy.
Yes, and remember a couple of years ago that the consensus of many of the Bitcoin fans on this site was that it was going to $US100k by the year's end. Yeah, $64k was a great buy.
USD0 and USD100K more or less share the same probability given that the market hasn't traded at either at those price points.
Therefore, the savvy BTC owner will consider both in their risk management.
USD64K was not necessarily a bad price point to start accumulating ratty on a weekly / daily basis. Those who did will be ahead. Normies can't understand why this is.
Pessimistic outlook this year.
Domestic
- Net migration decreases due to increasing emmigration.
- Unemployment increases faster than expected.
- Cost of living/lack of income starts to show wider impact across society.
- Inflation to decrease but still remain above target band, but,
- Rates drop anyway as they attempt to stave off the inevitable economic collapse.
- Decline of CBD's nationwide to speed up, Wellington in particular.
Global
- Russia continues to wage war in Ukraine until Putin's reign becomes untennable internally.
- Isreal continue war with Hamas, unlikely to escalate.
- Biden's experiences significant decline in health, possibly passes before election.
- Trump's health also starts to give
- Neither will see out a full term if elected.
- China become less relevant in global affairs as their internal issues become too big for Xi.
A couple of guesses - (uninformed)
Tiwai point hydrogen production kicks off and quickly found to be viable. Mainstream media starts reporting on atrocious outcomes, slave conditions and primary ownership related to lithium battery production. Hydrogen injection becomes a primary method of reducing NZ fleet emissions. NZ becomes a world leading Hydrogen producer.
A couple of hopes -
NZ fixes its atrocious mental health and domestic violence statistics having a knock on effect to huge reductions in violence, drugs, gangs, and organised crime (sorry a bit off topic but does effect money laundering and related economies).
The global economy generally realises the whole system matters and offshoring dirty processes to third world countries doesnt help green up anything.
The formation or recognition of an NZ politically centrist environment party not otherwise captured by ideologies, takes NZ politics by storm. Quickly isolates greens from a place on the main stage. Hopefully survives the related ankle-tapping by groups ultimately in agreement with policies but already compromised. NZ becomes a mecca for all things outdoors.
Maybe a bit cynical -
Fusion power and AI look to be right on the horizon of viability and ready to break everything, and as a result are exploited as a pump and dump scam ripping off inattentive investors globally.
The real Crypto bubble will begin.
’Mainstream bankers’ i.e. those similar to the ones that created the GFC through subprime mortgages will get to work as crypto enters the legitimate economy. Bankers will start to get greedy and think of clever ways to use crypto to access more credit and then sink that credit into more crypto!
the price of BTC will start to rise by the end of 2024 and hit new highs, over $100k. This will continue well into 2025 as mum and dad investors gain access to crypto through new easily accessible crypto investment products provided by banks (the same products used by banks to borrow more and double down). BTC will continue to rise, faster now and reach insane ‘value’ $200k, $300k, $400k!
crypto enthusiasts start to think this the moment that crypto becomes legit and also borrow more and throw it on the fire! People start to sell houses to buy crypto, crashing house prices as supply booms from the mad rush to BTC!
BTC values are surging ever faster now and head towards $1,000k! But before it can reach $1,000k something strange happens. It stalls… it struggles to push past the $1,000k barrier.
At the same time russia, funded by massive BTC gains as it sells all its crypto assets uses its cash to make big gains in the war.
The west suddenly becomes more risk adverse - right at the end of the year (2025) when investors look to realise their gains. The mass exit from crypto has begun.
before anyone can withdraw any substantial fiat from exchanges the first exchanges start to freeze transactions. They claim it’s because of massive server load but the real issue is there simply isn’t enough USD held to pay out. As smaller exchanges start to fall over the pressure mounts on the larger ones. pressure starts to mount on banks too as investors get spooked and start pulling out of their crypto investment products before term.
now banks are in trouble, not even a day after the first crypto exchanges start to topple the banks start falling too. The stock market is now is complete free-fall. nothing is safe at this point.
Dec 15th, 2025 - Goes down as the greatest asset bubble pop in history - larger than all other bubbles combined.
Meanwhile the world warms and all this economic turmoil has distracted the easily distracted human race from the very real environmental issues that face the planet. The earth steamrolls toward an ever more apparent catastrophic climate tipping point. But now with the economy in ruins there’s no way back.
predictions are fun!
Happy holidays!
Mighty Chris Joye turns his DGM dial to 11 on predictions for Aussie housing
In Australia, housing valuations continue to fall at a rapid clip. Based on the latest CoreLogic data to January 6, national capital city prices have slumped more than 9 per cent since their May 2022 peak, which is not far off the historical record drawdown of 10.7 per cent between 2017 and 2019 (using the publicly available five capital city index).
On our estimates, Aussie housing should register its worst cumulative loss in 42 years within two to three months. In Sydney, home values have plunged more than 13 per cent while Brisbane is not far behind, chalking up a 9.7 per cent decline. Those modest Melburnians have only slightly outperformed the other capitals with an 8.5 per cent correction thus far.
https://www.livewiremarkets.com/wires/historic-drop-in-house-prices-ahe…
How can house prices dive in Auckland with huge immigration, a housing shortage, Auckland Council constraints, traffic jams, rents increasing, costlier consents and subdivision, and building material prices on the way up.
If house prices decline, building will stop, and that will put upward pressure on exisiting houses.
How can house prices dive in Auckland with huge immigration, a housing shortage, Auckland Council constraints, traffic jams, rents increasing, costlier consents and subdivision, and building material prices on the way up
You could ask the same about San Francisco and Sydney. The former is seeing house prices being crushed and the latter being tagged for the worst correction in 40-odd yrs.
When society is crushed by debt servicing, the counterintuitive can happen.
Where did you get that from?
Last November SFO house prices were up 2.4% compared to 2022, with an average sale price of US$1.4m.
More than half of all suburbs in SYD posted at least 10% growth last year, while 21 suburbs rose more than 20%.
https://www.afr.com/property/residential/suburbs-where-home-values-soar…
I refer to Chris Joye. Sharpest tool in the shed.
In Australia, housing valuations continue to fall at a rapid clip. Based on the latest CoreLogic data to January 6, national capital city prices have slumped more than 9 per cent since their May 2022 peak, which is not far off the historical record drawdown of 10.7 per cent between 2017 and 2019 (using the publicly available five capital city index).
On our estimates, Aussie housing should register its worst cumulative loss in 42 years within two to three months. In Sydney, home values have plunged more than 13 per cent while Brisbane is not far behind, chalking up a 9.7 per cent decline. Those modest Melburnians have only slightly outperformed the other capitals with an 8.5 per cent correction thus far.
https://www.livewiremarkets.com/wires/historic-drop-in-house-prices-ahe…
"our estimates"...I rest my case.
If you're not aware, Chris has advised the RBA and was also the creator of the RP Data-Rismark house price index.
https://www.urban.com.au/expert-insights/finance/the-house-price-data-t…
Peter Zeihan believes the industrialization of Aussie should have started 30+ years ago. He also believes the Aussie property bubble is 5x worse than the US subprime crisis.
I predict that we as humans will continue doing the same old due to vested interests. Property will keep getting special treatment as a cash cow for retirement of NZ'ers, an uptick in investigative corruption findings of shady dealings with government and the upper echelons of business, especially in those who benefited the most from 2020 drastic policies and decisions.
However I would love to see further innovation in wool technologies in NZ as a renewable resource as there is still potential there. And I;d love to see some real attention and focus given the the ever rising costs of superannuation which is best addressed sooner than later.
House prices to decline mid-single digits in 2024.
- People are calling the bottom in 2023 on dismal sales volumes. As we know, prices follow volume.
- NZ will have materially rising unemployment in 2024, which has historically seen house prices decline or flat-line (at best).
- OCR remains higher for longer (the last September non-tradables annualised inflation print was 7%...)
- 42k of (way above trend) annual housing consents should have housing supply growing ~2% (about equal to population growth from net migration) and surely starts to get recognised in prices over the year.
My predictions, in no particular order and based on nothing other than gut feeling:
1. The housing market will continue to drop. I predict 5-10%
2. 2024 will be the year of the next GFC. We are overdue. The reasons will be different but the players will be the same - Investment banks.
3. Significant climate events will increase by 1.5x compared to 2023. Major insurers threaten to stop offering home insurance to entire communities unless the NZ Government steps to limit their losses.
4. Rents will continue to rise.
5. Kiwi's will continue to believe that property market is the sure way to riches.
6. The US supreme court will rule that former President Trump cannot claim "total immunity".
7. The US supreme court will declare that States (Colorado, Maine, others) cannot remove Trump from the US Presidential ballot.
Hoping to be wrong on most of these.....
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.