Tony Alexander

Economic Commentaries

Sporadic 10 June 11 2015

Thursday June 11th 2015

Fieldays 2015
I am at Fieldays again in Hamilton and here are some of the interesting things which I have learnt so far from the farmers, along with what I am saying to them about their operating environment, and the dairy outlook in particular.

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Sporadic 9 June 3 2015

Wednesday June 3rd 2015

The Wind Shifts Direction
Since the start of this year there have been developments which will boost the pace of economic growth, and developments which will retard it. On balance the negative side dominates, hence the downward movement in the NZ dollar and interest rates, and the rising need for nimbleness and focus from most businesses.

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Sporadic 8 – May 12 2015

Tuesday May 12th 2015

Eight Records Driving Auckland House Prices
It has become fashionable to blame the rise in Auckland house prices and decline in affordability on either Asian buyers, under-building, consenting issues, speculators or so on. Each person’s bias in cause attribution generates their own solution to the issue. However in Sporadic 8 we run through 8 factors at record or near record levels which should help build an understanding that no solution is possible. The price rises will continue, affordability will worsen, accommodation shortages for low income families will intensify for perhaps another 2 – 3 years.

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Sporadic 7 – May 5 2015

Tuesday May 5th 2015

Auckland Housing Shortage Again
Auckland has a housing shortage, and as illustrated last week, you can generate a large estimate of it very easily. In this issue of Sporadic we calculate the under-building of houses in Auckland since 1996, show how you can produce your own estimate of the shortage, graph the correlation between annual under-building and house price changes, and also graph the continuing rise in that under-building since 2002. The price implications of this simple analysis are clear. We also look at the two recent periods when Auckland house prices fell and postulate what it is that will cause the next period of decline.

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Sporadic 6 – 29 April 2015

Wednesday April 29th 2015

Auckland Housing Shortage is How Big?
Just how big is the housing shortage in Auckland? Common estimates in the media range from near 7,000 to 30,000. But what if we calculated how many houses Auckland would need to give the same 2.58 persons per dwelling occupancy rate as the rest of the country? The number is big.

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Sporadic 5 – April 23 2015

Thursday April 23rd 2015

The Effects of NZ Business Culture
A survey recently released shows that in spite of an improved economy and outlook more SME owners want to either sell their business or stop growing in order to better balance work and home life. This is a key reason why our economy fails to produce the many larger companies we need in order to boost exports and rise sustainably back up the OECD ladder. In this Sporadic issue we look at work we did back in early-2011 examining NZ business culture and how it works to impede business and economic growth.

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Sporadic 4 April 16 2015

Thursday April 16th 2015

A Capital Gains Tax on Housing?
Yesterday the Reserve Bank Deputy Governor expressed concern about high and rapidly rising house prices in Auckland and implied a call for a capital gains tax. Will his comments scare buyers away and calm the market, or encourage more buying? The latter. In this Sporadic issue I discuss why.

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Sporadic 3 – April 13 2015

Monday April 13th 2015

China Is Important To Our Economy
Here are some numbers reminding us all that China is important to our economy.

20% of our goods export receipts come from China+
28% of foreign students studying in NZ come from China+, bringing us about $800mn.
14% of foreign tourism spending comes from China+, bringing us over $1bn.
7%+ of non-student migrants to NZ come from China+

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Sporadic 2 – April 8 2015

Wednesday April 8th 2015

Kiwi Falls 13% Against The USD
The Kiwi dollar may have backed away from parity with the AUD yesterday but that interesting crossover point is still likely to be breached within the next few weeks – or days. In this second Sporadic issue we take a quick look at factors driving not so much the NZD upward – as we have shed 13% against the greenback this past year – but the Aussie dollar downward. Those factors won’t reverse for quite some time so a highish NZD/AUD exchange rate will likely be around for a couple of years.

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Sporadic 1 – April 7 2015

Tuesday April 7th 2015

For The Love of Writing
In this issue number 1 of our new publication Sporadic, running to three pages, I invite people to give thought to what it means if interest rates stay at low levels for an extended period of time. While one usually jumps immediately to thinking as a borrower, the more interesting effects may be on investor behaviour, especially once one factors in not just the Baby Boomer bulge of people perhaps “needing” to boost their returns, but a slowly building expectation of living longer and needing retirment income over a longer period.

It adds up to increased demand for voluntary medical precedures, holiday homes, investment properties, and new workplace skills. There is scope for people to develop businesses to profit from these trends.

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