Tony Alexander

Economic Commentaries

The full pdf version of the Weekly Overview is contained here.

Weekly Overview 18 May 2017

Thursday May 18th 2017

Data this week show housing turnover falling but household retail spending accelerating. We look at the numbers and consider implications for some property prices of an over-supply of sub-dividable sections in Auckland and the role emotion plays in housing cycles.

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Weekly Overview 11 May 2017

Thursday May 11th 2017

The Reserve Bank surprised the markets today not by leaving the cash rate unchanged at 1.75%, but failing to adopt a tightening bias (warning of rate rises) which most expected. That has caused the NZD to fall close to US68 cents but doesn’t change the risk that bank lending rates will continue to edge slowly higher while lending rules get tighter and tighter.

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Weekly Overview 4 May 2017

Thursday May 4th 2017

House building is growing in Auckland but at a very slow pace which will see the existing shortage get worse for the next few years – or decades. But outside Auckland and Canterbury a rapid supply response is occurring. That has implications for prices in locations with low (if any) population growth. The labour market remains very strong and firms which have been struggling to find staff are going to find things even tougher going forward.

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Weekly Overview 27 April 2017

Thursday April 27th 2017

With the week again interrupted by a public holiday the Overview is once more a tad on the light side. All we do is discuss the migration numbers and take a look at the recent small decline in the NZD to just below US69 cents.

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Weekly Overview 20 April 2017

Thursday April 20th 2017

We learnt this morning that the inflation rate has risen to 2.2%. But one key measure of core inflation still sits at just 1.6%. And with the absence of any sign of accelerating growth in wages outside the construction sector, while inflation near to above 2% beckons for a couple of years, the Reserve Bank are likely still to feel they have time on their side. The first official cash rate rise is still more likely toward the middle of next year than this year sometime.

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Weekly Overview 6 April 2017

Thursday April 6th 2017

The next Overview after this one will appear on April 20. This week we take a fairly simple look at a couple of recent business sentiment surveys, and look at data reaffirming what we already know about the Auckland housing real estate market slowing down. Nothing much really. Enjoy Easter.

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Weekly Overview 30 March 2017

Thursday March 30th 2017

This week’s Overview is a bit of a mish mash with commentary on household debt, cows, and US fiscal policy. If you’ve got something better to do go do it as there isn’t much new really. That is sort of the story for our economy overall at the moment – well underpinned by tourism, construction, migration, etc. and none of the recent new things we have learnt seem to be big enough to alter what lies ahead to any large degree.

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Weekly Overview 23 March 2017

Thursday March 23rd 2017

This week we note the record net migration gain this past year of 71,333 people and examine the numbers behind the change from -4,000 five years ago. A big influence on flows is the relative state of the NZ and Australian labour markets with one indicator being that since 2009 88% of net new jobs in New Zealand have been full-time, but in Australia this proportion is only 54%.

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Weekly Overview 16 March 2017

Thursday March 16th 2017

This week we comment on the February housing data from REINZ, undertake our once a year printing of regional house price graphs, and include a special graph of Auckland house price changes from 1962. Good luck if you think it tells you when the next trough or peak will occur. We also examine the role of FOMO in the housing market, page 3.

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Weekly Overview 9 March 2017

Thursday March 9th 2017

Many thanks for the messages of support received this past week. But not everyone got the main points of last week’s Overview so we go over them again. In summary….
-It has become harder to buy a house not because of one generation’s buying but numerous factors we have discussed hundreds of times in this publication since 2009 whilst warning about the upward house price implications.
-Young buyers these days need to make deep sacrifices in spending on other things if they want to purchase a house and if such sacrifices cannot be made home ownership could well remain out of reach.
-Getting credit from banks has become harder and further rationing of an increasingly limited supply of funds is coming.

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