New Zealand Economy


Unlike Australia, NZ Budget tackles housing affordability

By Leith van Onselen While the major political parties continue to ignore Australia’s highly unaffordable housing, the 2013 New Zealand Budget, released earlier today, announced a variety of measures aimed at boosting supply and improving overall housing affordability. Measures announced included: Introduction of the Housing Accords and Special Housing Areas Bill, which will enable the


IMF warns on NZ housing market

By Leith van Onselen New Zealand house prices surged again in April, with the national stratified median price hitting a record $412,500, but prices in New Zealand’s biggest city – Auckland – falling slightly from last month’s record to $595,500 (see next chart). House price growth across New Zealand is accelerating (see next chart). Nationally,


Fitch warns on NZ property bubble

Fresh from Fitch this morning: Fitch Ratings-Sydney/Singapore-08 April 2013: Fitch Ratings says that challenges are increasing for New Zealand’s major banks with strong asset growth and fierce price competition potentially leading to asset bubbles. This in turn may impact bank financial strength and place negative pressure on Viability Ratings (VR). In a report published today,


RBNZ: fix housing supply & temper credit

By Leith van Onselen The Reserve Bank of New Zealand (RBNZ) yesterday gave a speech (below) entitled Perspectives on housing, which provided a useful overview of some of the factors driving New Zealand’s housing market and monetary/prudential policy. Below are some key extracts. On housing and the New Zealand economy: The RBNZ notes that New


NZ mortgage war heats up

By Leith van Onselen The competition for mortgage lending is heating up in New Zealand. Last month, government-owned KiwiBank announced that it would drop its six month fixed mortgage rate to just 4.79%, which is reportedly the lowest mortgage rate offered by a New Zealand bank for “many decades”. And today, ASB (owned by the


HSBC sees New Zealand improving

HSBC is out with a quick note on the latest NZ GDP figures, although according to them they are “so late that they are mostly history”: New Zealand’s GDP was weaker than expected, rising by only +0.2% in Q3 (market had +0.4%). Downward revisions meant y-o-y growth slowed to +2.0% (market had +2.5%). Growth was held back


NZ growth slows

New Zealand’s GDP stats came out this morning and have undershot expectations. Economic activity, as measured by gross domestic product (GDP), was up 0.2 percent in the September 2012 quarter, Statistics New Zealand said today. This growth follows revised growth of 0.3 percent in the June 2012 quarter. The main movements by industry this quarter were: construction (up 4.5 percent),


NZ’s economic omen for Oz

By Leith van Onselen Please find below an interesting economics research note from the Bank of New Zealand (BNZ) on the growing economic imbalances developing in the New Zealand economy, which is encapsulated by the -11% fall in exports over the past year and the 33% increase in home sales. The note provides a stark


RBNZ moves to prevent asset bubbles

By Leith van Onselen In April last year, outgoing Reserve Bank of New Zealand (RBNZ) governor, Alan Bollard, muted introducing ‘maco-prudential’ tools to prevent the formation of future asset price bubbles: “[New Zealand needs] to keep preparing for how we might deal with credit and asset price booms when they recur in the future,” Bollard


An influx of bros

Following on from the recent release of ABS Data on the “Australian Bogan Exodus“, here’s an article from NZ’s leading financial news and opinion blog, that got me thinking: The exodus of people from New Zealand to live permanently or long-term in Australia continued in February, with net departures across the ditch hitting a new


NZPC hits the mark on housing supply

The New Zealand Productivity Commission (PC) on Friday released its draft report on housing affordability. Below is a video discussing the PC’s draft findings (via The PC report correctly identifies regulatory constraints on land/housing supply as the key impediment to affordable housing. Below are some key extracts from the report discussing the supply-side of the New Zealand housing


Auckland embraces unaffordable housing

Here’s one of the dumbest proposals that I have read in a while. The Auckland Council has released a Draft Plan proposing to change the existing urban growth boundary (called the “Metropolitan Urban Limit” or MUL) into an even tighter “Rural Urban Boundary” that would effectively ban development outside of the rural-urban line and limit


RBNZ gets housing policy right

The Reserve Bank of New Zealand (RBNZ) last week lodged a fascinating submission with the New Zealand Productivity Commission’s Housing Affordability Inquiry which, given the strong similarities between the Australian and New Zealand housing markets (explained in these earlier articles), is highly relevant to Australia. The RBNZ submission is provided below. At only 10 pages


NZ moves to quarantine negative gearing

When it comes to recent banking/housing policy, our Kiwi cousins across the pond have it all over us Aussies. Back in April, I wrote about three policy actions being undertaken by the Reserve Bank of New Zealand (RBNZ) and the New Zealand Government aimed at reducing the economy’s exposure to the housing market and improving financial


RBNZ tells it straight

The Reserve Bank of New Zealand (RBNZ) today released its biannual Financial Stability Report (FSR).  For years, I have been a keen reader of the FSR as it provides an alternate view to the biannual Financial Stability Review released by the Reserve Bank of Australia in March and September. I also follow events closely in


NZ considers new tools to combat housing bubbles

Earlier this month, I wrote about two policy actions being undertaken by the Reserve Bank of New Zealand (RBNZ) and the New Zealand Government aimed indirectly at reducing the economy’s exposure to the housing market. These measures included: the Open Bank Resolution (OBR) Policy, which seeks to protect taxpayers from funding future bank bailouts; and


NZ moves to limit exposure to housing

New Zealand has undertaken two policy actions lately aimed indirectly at reducing the economy’s exposure to the housing market. The first measure, called the Open Bank Resolution (OBR) Policy, has been initiated by the Reserve Bank of New Zealand (RBNZ) and seeks to protect taxpayers from funding future bank bailouts. The OBR is intended to