New Zealand Economy

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Is Jacinda Ardern a “housing revolutionary”

Morgan Stanley’s chief global strategist wrote an article in the Financial Times (republished in The AFR) suggesting New Zealand Prime Minister, Jacinda Ardern, is a revolutionary for ordering the Reserve Bank of New Zealand (RBNZ) to add stabilising home prices to its remit: Housing bubbles are the worst… When prices fall, it can take years

14

Kiwis escape to Australia for affordable housing

You know New Zealand housing is deranged when there is talk of Kiwis escaping to Australia for affordable housing. But that’s exactly what commentators think could happen given the extreme price growth being experienced in New Zealand, which saw median prices surge 27% year on year in February, according to the Real Estate Institute of

8

Auckland’s median house price soared $100k in February

New Zealand Prime Minister Jacinda Ardern’s promise to ‘fix’ housing affordability has taken another hit with the nation’s median house price rising another $50,000 in February, with Auckland’s surging by $100,000, according to the Real Estate Institute of New Zealand (REINZ). Price growth was strong across the nation, as summarised in the below table: Price

10

New Zealand house prices go vertical

CoreLogic has released its New Zealand dwelling value results for February, which shows that price momentum continued to gather steam. Dwelling values nationally surged by 2.6% over February to be up a whopping 7.6% over the quarter and by 14.5% year-on-year. As shown in the next chart, quarterly value growth is running at its hottest

8

Trans-Tasman travel bubble dealt fatal blow

The Trans-Tasman Travel bubble, which promised to allow unrestricted two-way travel between Australia and New Zealand, has been dealt a fatal blow with Queensland, New South Wales and Victoria each imposing new restrictions on Auckland arrivals following new community virus transmissions across the city. Overnight, New South Wales and Victoria reclassified Auckland as a virus

7

How RBNZ ignited the property market

New evidence has arisen suggesting that the Reserve Bank of New Zealand (RBNZ) has played a direct role in inflating New Zealand’s housing market, which is experiencing its strongest price growth since 2004. Over the weekend, Interest.co.nz revealed that the Treasury department recommended finance minister Grant Robertson advise the RBNZ to restrict the newly created

35

Immigration “the biggest single driver of housing demand”

It seems like an obvious and non-controversial statement: in developed nations with low birth rates, immigration is the key driver of household formation and structural housing demand. Immigration should, therefore, be front-and-centre of policy makers’ minds when attempting to solve shortages in housing and/or affordability concerns. Strangely, however, policy makers and commentators tend to ignore

8

NZ first home buyers shut out as investors take over

New Zealand Prime Minister Jacinda Ardern’s 2017 election promise to ‘fix’ the nation’s housing affordability crisis has taken another hit, with investors increasingly crowding-out first home buyers (FHB). The evidence is provided in CoreLogic’s latest update, which shows that the share of purchases by investors surged to a record high 30% in January, whereas FHB’s

1

NZ declared “red zone” as Auckland thrown into lockdown

The plan for a Trans-Tasman Travel Bubble allowing quarantine-free travel between Australia and New Zealand has hit another snag with Australia declaring New Zealand a “red zone” after new community transmissions were recorded in its largest city of Auckland. Auckland was placed into an “alert level 3” three-day hard lockdown overnight after three new community

8

Trans-Tasman travel bubble put on ice again

The promised Trans-Tasman Travel bubble, which was supposed to enable unrestricted two-way travel between Australia and New Zealand, has drifted further into the never-never. New Zealand Prime Minister Jacinda Ardern yesterday put the proposal on ice in response to Australia’s knee-jerk response over a recent single community transmission in Auckland: On Tuesday in Wellington, she

5

RBNZ tightens LVR clamps on “speculative” property market

The Reserve Bank of New Zealand (RBNZ) yesterday performed a stunning U-turn, reintroducing loan-to-value (LVR) mortgage restrictions just 10 months after such restrictions were lifted to aid the nation’s COVID-19 response. Under the changes, most investors will need 40% deposits and most owner-occupiers 20% deposits; although there are explicit carve-outs for new residential construction: The

7

New Zealand unemployment dives to 4.9%

New Zealand unemployment has confounded even the most bullish expectations, falling to just 4.9% in the December quarter, according to Statistics New Zealand. This compares to consensus forecasts of 5.6%: Key facts In the December 2020 quarter, compared with the September 2020 quarter: Unemployment rate fell to 4.9 percent. Underutilisation rate fell to 11.9 percent.

13

New Zealand’s “deranged” housing market

The Spinoff has published the below “deranged” chart on New Zealand’s housing market showing how for two decades, under both National and Labour governments, housing costs have risen far faster than wages: Labour is in a real bind here, because while 2020’s extraordinary 20% year-on-year price rise is an unmitigated disaster for anyone trying to

40

Jacinda Ardern sells Pacific freedom for few yuan more

Via the ABC: The Federal Government is fuming after New Zealand’s Trade Minister suggested Australia could mend ties with China by showing its government more “respect.” China and Australia are mired in several disputes and Beijing has targeted multiple Australian exports with sanctions, although the campaign of economic punishment has not escalated further so far

11

Jacinda Ardern lacks the courage to fix housing

As we know, New Zealand Prime Minister, Jacinda Ardern, was elected in 2017 on a platform of fixing New Zealand’s chronic housing crisis. However, Ardern’s Labour Party failed dismally on housing in its first term, failing to deliver on key election promises. Labour’s promised ‘KiwiBuild’ program to build 100,000 public houses descended into a farce,

14

NZ property market experiencing “perfect storm” and “unprecedented” price gains

ANZ Research has released a new report on the New Zealand property market, which claims that a “perfect storm” has developed that has driven “unprecedented gains”: Record Breaker House prices rose 2.9% in December, following similar stellar rises in October and November. This saw a quarterly gain of 7.7% for Q4 (figure 1) – the

37

Aussie property looks cheap compared to New Zealand

The housing affordability situation in New Zealand has gone from bad to worse, with new data released by the RBNZ showing that the value of New Zealand’s housing stock hit $1.28 trillion in the September 2020 quarter, up 10.7% year on year. When compared against the size of the economy – currently $321 billion –

16

Jacinda Ardern hoisted on her own housing petard

New Zealand Prime Minister, Jacinda Ardern, was elected in 2017 on a platform of fixing New Zealand’s chronic housing crisis. However, Ardern’s Labour Party failed dismally on housing in its first term, failing to deliver on key election promises. Labour’s promised ‘KiwiBuild’ program to build 100,000 public houses descended into a farce, with the government

18

ANZ whacks property investors

With New Zealand house prices spiraling out of control, surging 18.4% year-on-year: New Zealand’s largest home lender ANZ has dropped the hammer on property investors, requiring investors to have 40% deposits: The country’s largest home lender ANZ says from now it will require investors to have 40% deposits. This goes further than the recommendations of

2

Jacinda Ardern approves Trans-Tasman travel bubble

The on again, off again Trans-Tasman travel bubble has been approved in principle by New Zealand Prime Minister Jacinda Ardern. This means Australians will be able to travel to New Zealand without quarantining in by March 2021, provided the COVID-19 situation in both countries remains as it is currently. Jacinda Ardern said a commencement date

21

Tiny homes are no answer to housing crisis

On Friday, the Real Estate Institute of New Zealand (REINZ) delivered the sobering news that New Zealand house prices have surged to another all-time high following 18.4% growth year-on-year: It was also reported last week that New Zealand’s home ownership rate has fallen to its lowest level in around 70 years. The unfolding disaster has

27

Runaway NZ house prices expose Jacinda Ardern’s affordability lies

New Zealand Prime Minister, Jacinda Ardern, was elected in 2017 on a platform of fixing New Zealand’s chronic housing crisis. However, Ardern’s Labour Party failed dismally on housing in its first term, failing to deliver on key election promises. Labour’s promised ‘KiwiBuild’ program to build 100,000 public houses descended into a farce, with the government

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Jacinda Ardern has failed on housing

New Zealand Prime Minister, Jacinda Ardern, was elected in 2017 on a platform of fixing New Zealand’s chronic housing crisis. However, Ardern’s Labour Party failed dismally on housing in its first term, failing to deliver on key election promises. Labour’s promised ‘KiwiBuild’ program to build 100,000 public houses descended into a farce, with the government

25

Jacinda Ardern junks Trans-Tasman travel bubble

The emergence of a COVID-19 cluster in South Australia (see next chart) has persuaded New Zealand’s Prime Minister, Jacinda Ardern, to scrap the proposed Trans-Tasman travel bubble. From The Guardian: Australia and New Zealand are tackling the pandemic with slightly different strategies, leading to an impasse over a border reopening. Australia is pursuing a suppression

40

Hyperinflation hits New Zealand property after RBNZ drops ball

New Zealand house prices rocketed in October to another record high, according to the REINZ: Extraordinary growth is being recorded, with the seasonally adjusted median price surging by 4.7% in October and by 20.0% year-on-year: Sales volumes have also soared, rising 25.8% year-on-year: The price rises are being driven by the top half of the

12

Investors blame first home buyers for housing crisis

It’s become increasingly apparent that New Zealand is facing another housing bubble. New Zealand’s housing market has brushed off the COVID-19 pandemic, recording 2.1% value growth in the two months to October to be up 8.0% year-on-year – reaching another record high: According to CoreLogic: The support mechanisms put in place by the Government (wage