The Reserve Bank of New Zealand (RBNZ) today announced that it will tighten lending rules for mortgages from 1 November, but expects banks to comply with the “spirit” of the new rules immediately. Specifically, the new rules will see banks now restricted to just 10% of the new lending for mortgages that make up over
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NZ housing swallows economy
New Zealand’s average house price has hit $1 million for the first time: New figures from OneRoof and its data partner Valocity show the typical cost of a property around the country increased 4.9% in the last three months and 27% since September 2020. The doubling of the national average property value in less than
COVID runs riot through Auckland, lockdown extended
New Zealand has recorded another 70 locally acquired COVID cases taking total active community cases to 347: All of today’s cases were in Auckland. The total number of community cases in Auckland is now 333 and in Wellington it is 14. There are 278 cases that have been epidemiologically-linked to another case or sub-cluster, and
New Zealand’s COVID outbreak swells
New Zealand has recorded another 68 locally acquired COVID cases taking total active community cases to 277: The total number of community cases in Auckland is now 263 and in Wellington it is 14. New Zealand has been in a strict lockdown since 18 August. The nationwide lockdown is set to be reviewed on Friday,
New Zealand’s COVID outbreak worsens
The New Zealand Ministry of Health today reported another 62 new cases of COVID-19 in the community bringing the total number of locally acquired cases to 210: The total number of community cases in Auckland is now 198 and 12 in Wellington. Auckland’s lockdown was recently extended for a further week until 11:59pm on Tuesday
New Zealand’s COVID outbreak swells
The New Zealand Ministry of Health today reported another 41 new cases of COVID-19 in the community bringing the total number of locally acquired cases to 148: The total number of community cases in Auckland is now 137 and 11 in Wellington. Yesterday, Auckland’s lockdown was extended for a further week until 11:59pm on Tuesday
RBNZ: Property market cruising for a bruising
The Reserve Bank of New Zealand (RBNZ) believes the nation’s dwelling values are not sustainable and it is now forecasting that prices will fall in every quarter starting from Q42022 all the way through to the Q3 2024: House prices in New Zealand have increased rapidly over the past year from an already elevated level.
Immigration collapse driving up wages
Another day, another story about how the collapse in immigration is driving up wages and conditions for domestic workers that no longer have to compete for jobs with foreigners. This time the empirical evidence is from New Zealand, which in the years leading up to COVID ran a similar mass immigration policy to Australia: Skilled
Jacinda Ardern told to reopen immigration to lower wage costs
Anyone still arguing that immigration has no impact on wages only has to look over the pond to New Zealand, where Jacinda Ardern’s government is being lobbied to reboot immigration to relieve rising wage costs: “The dairy, horticulture, housing, services, health and broader public sector have all reported acute staff shortages, and called on the government
RBNZ: House prices “unsustainable”. Tightens macroprudential
Via the RBNZ this morning: The Reserve Bank of New Zealand – Te Pūtea Matua – will soon begin consulting on ways to tighten mortgage lending standards, Deputy Governor and General Manager for Financial Stability Geoff Bascand says. The action follows the signing of an updated Memorandum of Understanding (MoU) on macro-prudential policy with the Minister
ANZ: NZ house prices “simply bonkers”
From ANZ’s New Zealand economics team: Housing market overview A few months have now passed since the Government announced its suite of housing policy changes, and as the dust settles, a rather robust market is being revealed. It’s still early days of course, but the experience to date suggests policy changes so far are not
Housing swallows New Zealand’s economy
Last month I presented the below chart showing how the value of Australia’s dwelling stock had hit $8.3 trillion in March 2021 – 4.2 times the size of Australia’s GDP: If you think that’s alarming, check out the below chart for New Zealand showing that the value of its housing stock has surged to 5.0
Is the honeymoon over for Jacinda Ardern?
That seems to be the indication from Roy Morgan’s latest polling of New Zealand voters: Support for New Zealand’s Labour/Greens government dropped 5% points to 51% in June – the lowest for the Government since the COVID-19 pandemic began. Support for the Labour Party was down 6.5% points to 38.5% while support for the Greens
Lending still in all the wrong places
Interest.co.nz’s David Hargreaves has posted the below chart showing that Kiwis continue to leverage big time into non-productive housing lending, whereas consumer lending has also rebounded hard. By contrast, lending to productive areas of the economy – businesses and agriculture – remains stuck in negative: The latest increase [in housing lending] means that the annual
RBNZ cleared to introduce debt-to-income mortgage curbs
Recent data from the Reserve Bank of New Zealand (RBNZ), collated by Interest.co.nz, showed that Kiwis leveraged big time into property ahead of the Ardern Government’s investor tax reforms (announced in late March). The proportion of new mortgages taken out with debt-to-income (DTI) ratios above five soared over the March quarter, with all borrower groups
NZ property market powers past Ardern’s investor tax reforms
In March two key reforms came into effect designed to take the steam out of New Zealand’s fast inflating property market. First, the Reserve Bank of New Zealand (RBNZ) reintroduced loan-to-value ratio (LVR) mortgage restrictions, which from 1 March 2021 required both investors and owner-occupiers to hold bigger deposits: Second, and more importantly, the New Zealand
Trans-Tasman bubble boosts international travel
The introduction of the trans-Tasman travel bubble on 18 April 2021 has boosted international travel, according to new provisional travel statistics from the ABS. Arrivals of non-Australian citizens doubled in May to 71,060 from 35,210 in April: This was driven by a 32,000 increase in arrivals from New Zealand: In a similar vein, departures of
Memo to hospitality industry: it’s a “labour market”
For months we have witnessed Australia’s hospitality industry whine over labour shortages and lobby the federal government to give it easier access to foreign workers. At the same time the hospitality industry contradictorily called for an extension of JobKeeper and has lobbied to freeze the minimum wage. We are seeing the same shenanigans over the
Lending growth in all the wrong places
Interest.co.nz’s David Hargreaves has posted the below stunning chart showing that Kiwis have leveraged big time into non-productive housing lending, whereas consumer lending has also rebounded hard. By contrast, lending to productive areas of the economy – businesses and agriculture – continues to fall: While the mortgage borrowing has been mounting and mounting, business lending
Ardern Government holds big poll lead amid massive ponzi reforms
Over the last two months, Jacinda Ardern’s New Zealand Labour Government has launched two major reforms to wean the nation off ponzi-led growth, namely: announcing major property tax reforms targeted at investors that: extend the term of the Bright Line Test for taxing capital gains on investment property from five years to 10 years; and
Collapsing immigration solves NZ’s housing shortage
ANZ has published a note explaining how New Zealand’s closed international border is rapidly solving the nation’s chronic housing shortage, which dramatically worsened over the past decade as immigration ran hot: The closed border means the New Zealand housing market is in the rare position of being able to build enough houses to keep up
Ardern Labour shows the way on immigration reform
Earlier this month, the Ardern Labour Government of New Zealand 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
Kiwis leverage big into property
New data from the Reserve Bank of New Zealand, collated by Interest.co.nz, shows that Kiwis leveraged big time into property ahead of the Ardern Government’s investor tax reforms (announced in late March). The proportion of new mortgages taken out with debt-to-income (DTI) ratios above five soared in the March quarter, with all borrower groups rising:
Jacinda Ardern slams door on wage crushing immigration
A fortnight ago, Jacinda Ardern’s Labour Government tasked the New Zealand 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