Links 29 January 2020

Global Macro / Markets / Investing:





Unconventional Economist
Latest posts by Unconventional Economist (see all)



    As Greater Christchurch (being the local authority areas of Christchurch, Waimakariri and Selwyn) is growing by about 10,000 people per year currently, and is the fastest growing larger city in New Zealand at 2% (Auckland 1.5%), and its most affordable, the ‘dead centre’ of Christchurch has a woeful base of just 6,000 residents, as TV One News at 6pm illustrated last night …

    Calls for more affordable housing as council promotes central city Christchurch living (VIDEO) … TV One News

    The former central area of Christchurch resident population base of 6,000 with the total Greater Christchurch area being about 500,000, represents just 1.2% of the resident population base of Greater Christchurch. Refer …

    Estimated population up in all regions … 22 October 2019 … Statistics NZ

    Auckland based Property Editor of The New Zealand Herald, Anne Gibson, explained the expanding affordability advantage of Greater Christchurch, at the time of the release of this years 16th Annual Demographia International Housing Affordability Survey ( ) 20 January …


      New survey ranks NZ’s most and least affordable cities … Anne Gibson … NZ Herald

      Tired of the traffic hassles and back-to-work blues? Thought of moving to Christchurch to get a better life and lifestyle? That city turns out to be by far our most affordable when incomes are compared to house prices.

      Down south, the house prices are low but the incomes are high and out of eight areas just surveyed throughout New Zealand, Christchurch house-buyers have by far the best deal financially. … read more via hyperlink above …

      Whakatane teacher feeling impact of housing unaffordability ‘threat to middle class’ … Susan Edmunds … Stuff New Zealand

      • Alright, you blokes should get ready for a massive apartment boom.

        The playbook is well developed.
        – stop building
        – bring in foreigners
        – watch prices boom/shortage develop
        – declare “we must increase density to fix this”
        – being in some more foreigners
        – start building apartments in the centre and surrounds
        – bring in some more foreigners, including builders
        – declare that we still haven’t built enough
        – and keep building them towers and bringing in them foreigners at a rate that makes sure that
        >>>you never build enough
        >>>you can always flip development land profitably
        >>>you can always have cranes working on apartment towers

        Get ready, blokes.

        • there is a slight problem with the plan … stop building apartments means one million more people with a mortgage unemployed

          in last 10 years we built around 650,000 excess homes – homes currently not used as PPOR. We’ll have to stop building for a while before these get consumed

          property bubbles always pop after the construction boom stage because the end of construction boom crashes the economy heavily reliant on construction industry
          in last few years (since 15/16) we started building more homes (by any relative metric) than Irish, Spanish, Americans, … were ever doing
          we built 1.9m new homes for 3.2m new residents – that’s unprecedented in recent history since household size stabilised

          • That’s why you don’t stop, mate.

            Also those 650,000 place aren’t excess. Just because people who live in them can’t afford to buy them or choose not to buy them doesn’t mean we can do without those apartments.

            You have to be pretty mad to think those 650,000 apartments are excess.

          • there are no people living in those 650k units
            of 1.9m we built recently we managed to import enough people to fill only 1.25m of them … but we sold almost all of them by increasing our debt by over $100b per year

          • Yeah, right, 650,000 empties. That’s almost certainly bollocks.

            I’ll tell you when the bust arrives, mate.

          • I just don’t understand you
            WHY STOP?
            even if it is true that there are 650K empty apartments why not double that number, why not triple that number?
            Personally I don’t care if there are 3M empty apartments in Australia, if this is what is necessary to permanently kill the Australian property brain bug than it’s a small cost to pay. Sure our banks will go under if 3M apartments with an average cost of $750k all sit empty for 5 years and eventually sell for $250K , but if that’s what is needed than that’s what is needed.
            We need to build until everyone with eyes in their head says this is stupid, most importantly we need to get to this point while there’s still an opportunity to positively impact Australia’s role in the second half of the 21st century.
            For me the worst possible outcome is that we rest-up now and get back to the same stupidity in 2 or 3 years when the excesses have been absorbed.

          • @fisho
            that’s why I said there is a problem with Peachy plan – we cannot stop building, our construction industry is almost 15% of GDP directly and probably as much indirectly

            if the bubble is to continue we have to continue building at ever increasing rate, so if we needed 10 years to build 650k empty units we’ll need only 5 years do build next 650k empty ones if we want to keep growth and bubble going.

          • Your maths is wrong. We dont have to double the number of builds.

            Same rate of building will be fine. A lower rate of building will be fine as well, probably even better. Better for the housing shortage.

          • so how do you think we can keep growing if we keep the same level of construction? where is the growth going to come from?
            without growth we’ll hit recession and everything will collapse
            during the last boom construction was growing at 10% per annum rate and that’s why everything was booming
            if we want continue growth we need construction to grow at at least 10% or have another large fast growing industry to offset that – I wonder which one would that be?

            BTW at the same rate of building we would be building as many empty ones

        • The only thing that has to grow is prices. Number of units doesn’t really matter. In fact, too many units devalues prices.

  2. looks like it became fashionable among Chinese local leaders to show off real determination and leadership by shutting down cities even when there is no real reason for it.

  3. From Pod at NC

    Just some interesting color around the Corona:

    My son is on the team responsible for sequencing the individual strains arriving here in Australia. They tested one single nasal swab from a suspected carrier and came up with the following:

    70% of the DNA was human, the rest Other.

    80% of Other was identifiable bacteria, viruses, and other matter. 20% was unidentifiable.

    Of the 80% they identified 5100 different bacteria and viruses (from 5.2 million records they had to number crunch). These included: gonorrhea, herpes, staph, strep, equine flu, parvovirus, chlamydia, salmonella, shigella, botulina, Yersinia pestis (bubonic plague), hepatitis, and Yes:

    1 single solitary Novel coronavirus (2019 nCoV).

    They also found human, cat, dog, pig, rat, and horse fecal matter.

    It’s a moveable feast, like I guess we all are.

  4. Arthur Schopenhauer

    “ Everyone must understand, first of all, that this epidemic was allowed to spread for a period of more than forty days before any of the abovementioned cities were closed off, or any decisive action taken. In fact, if we look at the main efforts undertaken by the leadership, and by provincial and city governments in particular, these were focused mostly not on the containment of the epidemic itself, but on the containment and suppression of information about the disease.”

      • Nah enough vibrancy bringing it to my backdoor so I reckon Ill mask up & lock down at home with my feet up watching the $sht $how on the telly and munch on a bag of CC’s.

  5. “Morrison wants power to declare national emergencies in disasters”

    Prime Minister Scott Morrison wants the power to declare a national state of emergency and call out the Defence force to deal with natural disasters as he says the cycle of dangerous fires “must be broken”.

    So how come Labor were able to unilaterally send in Defence force members and equipment post Yasi and provide support to the Black Saturday fires? Sounds like Morrison is looking for an a$$ cover.

    • Because they knew all disasters are their fault. Scotty from Marketing has to do things by the book, you know.

  6. this coronavirus has a great potential to save modern capitalism as a scapegoat for inevitable collapse of the world economy

    who would blame capitalism (or Chinese Communist party) when clearly virus destroyed the world economy

    • This I 100% agree on. It is a good potential scapegoat for heaps of things, including a crisis of capitalism.

  7. Can anyone here help
    -My ceiling insulation is sound and i’ve added more batts to increase the R rating to ~5. Unfortunately there’s no sarking/reflective foil insulation between rafters and colourbond roof. Any tips beyond getting the roof taken off and laying the foil then putting it back on?

    • You need to ask a builder. Not a bunch of perms tards who haven’t ever owned half a house between them.

  8. reply to hm520
    It is a big job to remove all the roofing and sark from above, and it risks introducing leaks.
    Consider putting the sarking on from below and stapling it. Not ideal, but in some cases it might work well.

    Also I recommend using a few roof ventilators in summer. Ideally ones that you can block-off in winter.