New Zealand Economy

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Ardern looks to pump faltering New Zealand mortgage market

Mortgage demand in New Zealand fell sharply in the final quarter of 2021, according to credit reporting company Equifax: “Credit inquiries are a lead indicator of housing turnover and price movement, and despite the increase in house prices across New Zealand in the December quarter, the recent reduction in mortgage demand may indicate cooling prices

4

Million dollar listings becomes norm in NZ

According to CoreLogic, New Zealand property finished with an average price of $1,006,632 and record-breaking annual market growth of 27.4%: This surpassed the previous record of 24.4% annual growth in 2003. The breakdown of growth across jurisdictions is presented below, with Auckland, Wellington and Tauranga topping the $1 million mark: The extreme growth has pushed

15

New Zealand seals border to Australia

Just in from The Australian: New Zealand has delayed reopening its border to Australia until the end of February, amid fears opening will allow Omicron into the country. Jacinda Ardern’s government had planned to allow fully vaccinated Kiwis living in Australia to return home from January 17. However NZ Covid chief Chris Hipkins told reporters

2

New Zealand GDP dives 3.7% in Q3

Statistics New Zealand has released national accounts data for the September quarter, which fell 3.7% amid lockdowns – the second largest fall since the current series began in 1986: The key points from the release are below: GDP was down 3.7 percent service industries fell 2.7 percent goods-producing industries fell 7.3 percent primary industries fell

11

New Zealand’s epic housing boom is nearing its end

If you thought Australia’s housing market was mad, spare a thought for New Zealand where the REINZ today recorded 1.1% seasonally adjusted growth in November, with values up an extraordinary 23.7% year-on-year: Values have also soared across virtually every market across New Zealand: The median property value in New Zealand is now an eye-watering $925,000,

3

Jacinda’s honeymoon with NZ voters is over

According to the latest Roy Morgan NZ poll, it looks like NZ PM Jacinda Ahern maybe facing re-election trouble, with low support and confidence amongst NZ voters following the recent lockdowns: Support for New Zealand’s Labour/Greens ‘coalition’ government was down 3.5% points to 46.5% in November as support for the Labour Party dropped 3.5% points

9

Jacinda Ardern backs up immigration dump truck

Back in May, 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. It flagged a significantly smaller migration intake post-Covid that focuses on highly skilled, highly paid and productive migrants that fill genuine skills shortages. This means abolishing the current low-skilled system, which has

17

Just when you thought Australia’s property market was mad

Spare a thought for New Zealand, where CoreLogic today recorded 1.8% growth in November, with values up an extraordinary 28.4% year-on-year: The average property value in New Zealand is now an eye-watering $978,401, with Auckland ($1,402,845) and Wellington ($1,114,979) both topping one million dollars. Over the year to the end of November, the average value

7

Treasury: Soaring home prices reduces inequality!

The New Zealand Treasury has released one of the most bizarre pieces of economic modelling I have ever seen: claiming that house price growth actually reduced inequality: The research “surprisingly” found a 10% increase in house prices decreases wealth inequality across the population. This is because the wealth of the wealthiest is mostly comprised of non-housing

19

Productivity Commission: Pre-COVID immigration unsustainable

Earlier this year, the New Zealand Government tasked the Productivity Commission (PC)  with undertaking a system-wide review of the nation’s immigration program, with particular focus on the “impact of immigration on the labour market, housing and associated infrastructure, and the natural environment”. The goal of the inquiry is to “enable New Zealand to strategically optimise

18

Jacinda Ardern kowtows to China on TPP trade pact

China has officially sought to join the 11 member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It is also agitating against Taiwan’s inclusion in the pact. Taipei Economic and Cultural Office in Australia representative Elliott Charng told a parliamentary inquiry in Canberra last month that Taiwan’s membership of the CPTPP would be of mutual

5

RBNZ begs Kiwis to stop pumping property

New Zealand’s housing market experienced another extraordinary rise in values in October, with values rising 2.1% over the month to be up 28.8% year-on-year, according to CoreLogic. All major markets also experienced extraordinary growth: Much like Australia, the rise in prices has come off the back of FOMO (“fear of missing out”) and a dearth

1

Immigration collapse delivers record low NZ unemployment, rising wages

From Statistics New Zealand: Key labour market measures showed an increasingly tight labour market, with unemployment and underutilisation near record lows, employment at an all-time high, and wage growth strong, Stats NZ said today. The seasonally adjusted unemployment and underutilisation rates fell to 3.4 and 9.2 percent, respectively, in the September 2021 quarter, while the

19

When will Aucklanders turn pitchforks on Jacinda Ardern?

Like Australia, New Zealand’s COVID vaccination efforts have been spectacular. As shown in the table below, 88% of the eligible (12+) population has received at least one vaccine dose, with 75% full vaccinated: This has moved New Zealand from global vaccination laggard towards leader: Auckland – New Zealand’s largest city of 1.7 million people –

17

NZ launches housing densification policy

Today, the Ardern Labour Government, supported by the opposition National Party, proposed a major building densification law change that will see up to 105,500 extra homes built over the next 5-8 years across New Zealand: The Government, with the support of National, is proposing to urgently change the Resource Management Act (RMA) to enable more

9

When will Aucklanders turn on Jacinda Ardern?

Like Australia, New Zealand’s COVID vaccination efforts have been spectacular. As shown in the table below, 85% of the eligible (16+) population has received at least one vaccine dose, with 66% full vaccinated: This has moved New Zealand from global vaccination laggard towards leader: Auckland – New Zealand’s largest city of 1.7 million people –

13

RBNZ hikes cash rate to 0.5%

The Reserve Bank of New Zealand (RBNZ) today lifted the cash rate from 0.25% to 0.5%, representing the first hike in seven years. Below is the statement: The Monetary Policy Committee agreed to increase the Official Cash Rate (OCR) to 0.50 per cent. Consistent with their assessment at the time of the August Statement, it

7

New Zealand officially abandons COVID elimination

Auckland has been in a lockdown since 18 August. Last week, New Zealand Prime Minister Jacinda Ardern stated that the government was still aiming to eliminate the virus. However, after ongoing double-digit new cases (see above chart), Ardern officially abandoned her elimination strategy, easing restrictions in locked-down Auckland. NZ Prime Minister Jacinda Ardern said the

11

So much for Jacinda Ardern’s “immigration reset”

Back in May, 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. It flagged a significantly smaller migration intake post-Covid that focuses on highly skilled, highly paid and productive migrants that fill genuine skills shortages. This means abolishing the current low-skilled system, which has

26

New Zealand drops sledge hammer on property investors

On 23 March, the New Zealand Ardern Government announced major property tax reforms targeted at investors, specifically: extending the term of the Bright Line Test for taxing capital gains on investment property from five years to 10 years; and fully removing the tax deductibility of mortgage interest payments on residential investment properties. Yesterday, the Ardern