New Zealand Economy

With New Zealand’s house prices falling 5% since November, and Westpac tipping a peak-to-trough decline in values of 15%, the Ardern Government’s latest Budget has summoned the first home buyer patsies.

Westpac’s latest “Home Truths” report forecast a 10% decline in New Zealand house prices this year, followed by a further 5% fall in 2023: We previously expected a 10% peak-to-trough fall in prices over this year and the next; we now expect a total drop of 15%.

I reported yesterday how the Ardern Government in New Zealand announced some tweaking to the immigration system that will ensure Kiwi businesses have easy access to migrant workers.

In May last year, New Zealand’s Ardern Government vowed to end low-skilled, wage crushing migration via a “once-in-a generation” reset for New Zealand’s immigration system.

The Real Estate Institute of New Zealand (REINZ) has released its house price results for April, with median prices declining another 1.7% over the month to be 4.9% lower than November 2021: In dollar terms, the median New Zealand house price has declined by $45,145 from its November 2021 peak, from $920,145 to $875,000.

It is wall-to-wall bad news for New Zealand’s housing market.

CoreLogic’s Quarterly Property Market & Economic Update notes that the “long-awaited slowdown in NZ’s residential property market has finally arrived” with the “first few months of 2022 genuinely weak”.

In May last year, New Zealand’s Ardern Government vowed to end low-skilled, wage crushing migration via a “once-in-a generation” reset for New Zealand’s immigration system.

Yesterday, the Reserve Bank of New Zealand (RBNZ) shocked economists with a 0.50% increase in the Official Cash Rate (OCR) to 1.50%. The RBNZ described the over-sized hike as “bringing forward” monetary tightening, stating it “remained comfortable” with OCR outlook outlined in its February Monetary Policy Statement (MPS).

Wow, this is a great read from Stuff.

New Zealand fixed and floating mortgage rates are on the rise, following three consecutive rate hikes from the Reserve Bank of New Zealand (RBNZ): As shown above, floating mortgage rates have risen around 0.7% from their June 2021 low, whereas the 3-year fixed mortgage rate has surged by around 2.2%.

Tracy Watkins, editor of the Sunday Star-Times, published an impassioned article on the corrosive impact New Zealand’s multi-decade house price boom is having on society, which she labels a “a ticking time bomb”.

After experiencing one of the world’s biggest house price booms in 2021, the warning signs are piling up for New Zealand’s housing market.