Mortgage stretched Kiwis revolt against Jacinda Ardern

The political situation has gone from bad to worse for New Zealand Prime Minister Jacinda Ardern.

The latest Roy Morgan poll has Ardren’s Labour Party (32.0%) still trailing well behind the opposition National Party (38.0%) on primary vote:

New Zealand party primary vote

On a coalition basis, the Labour Government is also trailing 42.5% to 49.0%:

New Zealand Coalition vote

To add further insult to injury, the Roy Morgan Government Confidence Rating has crashed below the neutral level of 100 for both genders for the very first time, hitting a record low 87.5. In a similar vein, New Zealand consumer confidence has also plunged to a record low 77.9:

New Zealand Government and consumer confidence

For the first time, more voters from both genders also believe New Zealand is headed in the wrong direction than the right direction.

Jacinda Ardern campaigned hard on housing affordability. Yet many Kiwis have been shut out of the New Zealand housing market following 30%-plus dwelling value appreciation over the pandemic. They are rightfully angry.

At the same time, those that have purchased recently or are carrying large mortgage debts are petrified at the prospect of mortgage rates surging further, their properties plunging in value, and potentially being thrown into negative equity.

New Zealand’s housing market is the most expensive in the developed world and Kiwi economists and financial markets are tipping sharp increases in mortgage rates to between 6.25% and 7.5%, which would add up to $1,250 in monthly mortgage repayments to the median priced New Zealand home ($1,700 a month in Auckland).

With mortgage pressures building and the housing market beginning to hit the skids, Jacinda Ardern is copping the blame.

Unconventional Economist

Comments

  1. kiwikarynMEMBER

    Its not just housing. Its the fact that we have been told that we have to stay in full Covid restrictions (the “Red Light” setting) until NEXT SUMMER! Despite covid cases dropping rapidly, the hospitals never reaching capacity, and most covid deaths being people dying with covid not of covid. The reason for having to still live life in semi-lockdown while hospitality, events and tourism die a slow death? Because we’re going to get the flu (as in the normal seasonal influenza). Its gone beyond a joke now.

  2. Good points but the opposition will only make things worse. I’d love to hear about the magic bullet solution proposed by the Nationals.has anyone heard them?

  3. Hugh PavletichMEMBER

    ANZ economists say latest survey results shows urgent need for RBNZ to hike rates; ANZ sees likely annual inflation of 7.1% as of March quarter … David Hargreaves … Interest Co NZ

    https://www.interest.co.nz/business/115303/anz-economists-say-latest-survey-results-shows-urgent-need-rbnz-hike-rates-anz-sees

    ASB economists say last week’s ‘big lift’ in wholesale interest rates added to the upside pressure on mortgage rates … David Hargreaves … Interest Co NZ

    https://www.interest.co.nz/business/115293/asb-economists-say-last-weeks-big-lift-wholesale-interest-rates-added-upside

    Be Kind, or Be Realistic? Why Kiwis are fed up with everything right now … Virginia Fallon … Stuff New Zealand

    https://www.stuff.co.nz/national/health/coronavirus/128291641/be-kind-or-be-realistic-why-kiwis-are-fed-up-with-everything-right-now

    The New Zealand Time Machine Housing Pivot Bites! … Martin North … Digital Finance Analytics

    https://digitalfinanceanalytics.com/blog/the-new-zealand-time-machine-housing-pivot-bites/

  4. Pollies and CBs have painted themselves in a corner. Housing cost is so high now, it is not possible to please everybody. Mortgage rates are going up. Those who bought will be unhappy. House prices are high right now,those not bought are also upset.

  5. Housing, you’re damned if you do something about it and your damned if you don’t. The only time to politically get away with reform is if an external shock causes the downturn. Then you go in guns blazing.

    • And we got those, several, and wasted them.
      (1) The Earthquakes/GFC – under the Nationals and John Key. And what was the answer for those made homeless/jobless? Make property more expensive for them to replace their lost homes/lives, because the alternative was to lower the prices for them and everyone else, and that wasn’t allowable.
      (2) Covid – under Labour and Jacinda Ardern. Business was going to drop dead, so the answer was to raise property prices to make us feel like we weren’t really getting poorer.

      Both those occasions; handled by opposite political parties, gave us a chance to rebalance the property market, and point at an unanticipated situation, saying “It’s not my fault, It’s that unexpected situation!” but did we? Well, obviously, having ramped property prices up to the most expensive on the planet – No.
      So. What happens now? Alternative (3) kicks in. The most brutal and dispassionate of all alternatives – also fondly known as Mr Market. He is about to show our failed politicians how tough choices are made and enforced, and it’s going to hurt.

      • kiwikarynMEMBER

        Christchurch post EQ had the most affordable housing in the country. In 2019 you could get a brand new house and land package for $350k. House prices were flat or falling, in the last Govt Valuation round our property valuations actually went down. The steps National took post EQ had paid off – houses were being built, existing houses were cheap to buy, rental houses were easy to find. Then 2020 hit. The average house price in Canterbury in April 2019 was $450k, now its over $720k.

  6. – Jacinda Ardern is simply the poor sod on who’s watch the housing bubble is imploding. If the Nationals had been in power then they would have suffered from the same (horrible) situation.

    • kiwikarynMEMBER

      There are two housing crisis’ happening – property price escalation for those looking to buy, and high rents and low supply of rentals for those looking to rent. While property prices are indeed a function of monetary policy, the rental crisis that has left tens of thousands homeless due to sky rocketing rents and shortage of rental housing is entirely of the Labour Govt’s making.

      • – The Ardern government isn’t responsible for demographic trends like: 1) a larger % of women entering the workforce (happened in all industrialized countries) 2) Baby boomers moving to larger houses 3) while the older generations are still getting older and not freeing up their houses 4) over the past say 70 years the amount of people per household has also dropped significantly.