New Zealand Economy


Kiwi to fly on National election win?

by Chris Becker Over the weekend, NZ Prime Minister  John Key’s incumbent National party won the general election in a clear majority. The effects of a third term for the conservative (ish) party on the South Pacific nation are being felt and discussed already, with the consensus rising that budgetary and social welfare reforms will continue


New Zealand income booms

By Leith van Onselen Statistics New Zealand (Stats NZ) has released national accounts data for the June quarter, which revealed 0.7% growth in real GDP over the quarter and 3.5% growth over the year – the highest rate of growth since the year to September 2007. The growth was largely driven by the services sector:


NZ house prices rebound on soft volumes

By Leith van Onselen The Real Estate Institute of New Zealand (REINZ) has released its August house price results, which registered a rebound in values following three consecutive months of fall, but another slowing in annual growth. In the month of August, the national stratified median price rose by 1.1% to around $442,000. Prices were


NZ shows Australia how to address housing policy

By Leith van Onselen In the lead-up to the 2013 Australian federal election, the issue of housing affordability received zero attention from Australia’s major political parties, and no public debate. For example, of the 48 discussion papers outlining the Coalition’s policies on just about everything – including such useless topics as “creating a green army”-


New Zealand pumps first home buyers

By Leith van Onselen You can tell it’s an election year in New Zealand with the incumbent National Government announcing over the weekend that it would double first home buyer (FHB) subsidies. From Prime Minister John Key launched National’s campaign on Sunday with a plan to double first home buyer subsidies at a extra


More evidence NZ macroprudential is working

By Leith van Onselen From’s Friday Top 10, featuring David Whitburn – a professional property investor, comes more evidence that the Reserve Bank of New Zealand’s (RBNZ) loan-to-value ratio speed limits are working: The Loan to Value Ratio (“LVR”) restrictions that took effect on 1 October 2014 have had an immediate effect on the


Kiwis continue to flood home from Australia (members)

By Leith van Onselen Statistics New Zealand has today released its permanent & long-term migration figures, which revealed that New Zealand net migration is booming and Kiwis continue to return home from Australia: New Zealand had a seasonally adjusted net gain (more arrivals than departures) of 4,500 migrants in July 2014. This is the highest


Westpac tips NZ house price falls

By Leith van Onselen From Westpac, via, comes new research tipping pain ahead for New Zealand’s housing market: For some time the Westpac Economics Team has been forecasting a modest resurgence of house price inflation this year, before the market turns more decisively negative later next year. Despite our near-term bullishness, we anticipate a


The ANZAC’s diverging economic paths

By Leith van Onselen The New Zealand economy passed a symbolic milestone today, with the unemployment rate declining to 5.6% in the June quarter and in the process falling below Australia’s unemployment rate for the first time since March 2009 (see next chart). As noted last month, the diverging fortunes are also reflected in the


Build up or out? Auckland needs both

By Leith van Onselen Hayden Duncan, the head of New Zealand’s largest real estate company, Harcourts, has provided an interview to, in which he expressed alarm at Auckland’s expensive home prices and urged the city to build up instead of out in order to cope with population growth and improve housing affordability: The average


Kiwis flood home from Australia (members)

By Leith van Onselen Yesterday, Statistics New Zealand released its permanent & long-term migration figures, which revealed that New Zealand net migration is booming and Kiwis are returning home from Australia: In the June 2014 year, permanent and long-term (PLT) migrant arrivals numbered 100,800 (up 14 percent from 2013), the first time more than 100,000


NZ CAD falls on export reliance

by Chris Becker NZ just printed its current account deficit (CAD) for the March quarter, which fell by almost half from the last quarter, all on the back of agricultural exports. It is still elevated as measured by a percentage of GDP – some 2.8% although this is down from 3.9% in the previous 12


RBNZ jawbones on currency and rate hike forecast

by Chris Becker Following the rise in the official cash rate in New Zealand yesterday, the RBNZ has come out again in talking its currency down, focusing on falling commodity prices not just the interest rate differential with the other major currencies. From Bloomberg: The Reserve Bank of New Zealand believes currency traders are mispricing


RBNZ hikes rates to 3.25%

by Chris Becker As reported earlier in Macro Morning, the Reserve Bank of New Zealand (RBNZ) has hiked its official cash rate 0.25% to 3.25%: The main reasons indicated are house price inflation and very decent GDP prints (mainly due to reconstruction in Christchurch, not necessarily an indicator of a strong underlying economy) Sound familiar?


NZ PM defends the population ponzi

By Leith van Onselen New Zealand Prime Minister, John Key, has lept to the defence of New Zealand’s high immigration intake, refusing to concede that it has placed upward pressure on house prices or interest rates. From Key denied the current rise in migration was responsible for higher interest rates. “No, I don’t think


RBNZ shows APRA the way on macroprudential

By Leith van Onselen While the Australian Prudential Regulatory Authority (APRA) continues to act concerned over the re-emergence of risky lending, and has released a draft Prudential Practice Guide 223 Residential Mortgage Lending, its counterpart across the pond, the Reserve Bank of New Zealand (RBNZ), continues to enjoy success from its cap on high loan-to-value


NZ housing market loses steam

By Leith van Onselen New Zealand’s housing market is showing further signs of slowing, with the Reserve Bank of New Zealand’s (RBNZ) latest survey of households showing the lowest percentage of people expecting house price gains since 2012. From …in the past three months the net percentage of people expecting house price gains in


RBNZ warns on debt, housing values and China

By Leith van Onselen The marvelous Reserve Bank of New Zealand (RBNZ) has released its bi-annual Financial Stability Report, which in true RBNZ fashion contains some blunt assessments about risks facing the New Zealand financial system and broader economy. While acknowledging that the financial system is currently sound, the RBNZ remains concerned about New Zealand’s