The full pdf version of the Weekly Overview is contained here.
Weekly Overview 27 October 2016
Friday October 28th 2016
Nothing much to look at this week – just some comments about how this period of Baby Boomers hitting 65 is not producing the changes people have wrung their hands about for decades. Asset prices are soaring, not collapsing. Young people are staying in NZ, not fleeing. BBs are staying in employment, not playing golf. The employment rate for people 65 and over sits at 22% compared with 5.8% in 1998. Next to come? Changes in Treasury’s forecasts of the fiscal burden of the aging population as a result of strengthened population growth driven by more young people and more older ones working.
Some people have postulated a war between the generations centred around the housing market. Sounds exciting, but it ignores the fact that no Baby Boomer lobbied the government and Reserve Bank to engineer a return to 1960s interest rate levels just as they retire and become dependent upon earnings from bonds and term deposits.
Things are back to normal this week and we start the Overview with a look at the issue of whether per capita GDP growth is really as low as the headline numbers suggest. This article probably won’t interest most readers. But further on in the Housing section we discuss the latest REINZ numbers and look at five developments over the past fortnight of relevance to the Auckland housing market. Hint – none will stop prices from rising further.
This week we discuss the way our export dependence upon agriculture retards long-term growth in NZ’s economy and incomes when compared with many other countries. The absence of any fear that our meat and dairy sectors will ever be relocated offshore directs attention toward deeper and deeper efforts to open new markets for the same old products rather than investing in new ones and owning the chains for distributing them globally.
This week’s Overview is fairly short. We take a wee look at the way developments this week have generally been on the positive side for the NZ economy. Then we discuss the issue of freeing up cash in retirement by shifting to a location with cheaper housing, giving interested readers a link to help facilitate their search for such cheapness.
This week we print a handout on factors at play in the Auckland housing market as promised to a group of 350 people at a seminar in Takapuna this week. We also look again at who the people are driving the sharp turnaround in net migration flows these past four years – Kiwis basically. Increased inflows of foreigners on residence and work visas only account for one quarter of the surge.