tony alexander is proving himself to be one of those economists who are forever a slave to what just happened. all he does is extrapolate the recent past looking for any small movements so he can make small minded predictions. his methodology and economic mindset is severely wanting. he is taking a super safe stance and becoming a mere statistician. and as the joke goes - 87.27 percent of statistics are made up on the spot. he is either ignoring the huge macro economical and societal forces or is not comfortable analyzing them and incorporating them to make bold predictions. economics is really a study of people and how they move as masses. so unless an economist is comfortable in analyzing movements like krugman are roubini or either top minds are then they just become commentators with little useful to say - only things to report. i believe that there's a paradigm shift away from debt that alexander is missing here. and moving away from debt means a huge crash in asset prices.

Garkenro makes a good point, and the link provided is interesting. I'm not sure that all of it is 100% scientific, but an interesting observation was that when mapped on a graph, "bubbles" tend to look reasonably symmetrical. This means that the unwinding process can take just as long to complete as the winding-up phase.

The link to "OfTwoMinds" also makes some common-sense statements about any early signs of "bounce-back" or recovery. It points out that there are undoubtedly going to be a few little anomalies on the way down.

There's a small pool of cashed-up potential buyers in the market who were shrewd enough to sell up at the peak of the property market, and who will now be itching to get back into a depressed market. That's fine and understandable - I think we're probably seeing a lot of them sniffing around the market now as summer draws to a close.

There is also still a pool of high-earning individuals/couples/families who haven't been hit by the recession yet (and may not be). They're also looking at the Property Market with a high degree of interest right now.

However, when those pools are exhausted (and I don't think it'll take long), the inexorable slide will continue. There are too many factors in motion to stop it. One factor that many people ignore is simple "freedom of information".

These days, anybody with an internet connection (which is pretty much everyone) can track market movements on a daily basis with ease. Media reports are pumped right into the home to an extent never seen before. Statistics and trends are freely available at the click of a button - it used to be much harder to access this kind of data.

I think this has the potential to make our booms bigger, and our busts even more disastrous than they have been historically.

Tony Alexander has consistently been promoting a bullish outlook, or at least relative to everybody else, for at least the last 12 months. His outlook is often even in contrast with the other economists within the BNZ!

In one column late last year he commented that the outlook for New Zealand was 'the best it had been for a very long time', or words to that effect. I questioned his stance at the time but received no reply.

I can only assume that since his commentary makes absolutely no sense whatsoever, that he is equivalent to the real estate pundits (such as Barfoot and Thomson) that are continually trying to talk up a dead market.

The prize goes to whoever can expose this man's agenda - is it his own ailing property portfolio that he is concerned about? Or perhaps he is directly in the pockets of the real estate industry? No other bank economist is rabidly trying to talk up the market so I doubt that the bias is driven by the BNZ itself.

Yeah maybe, but when the body of evidence is overwhelmingly to the contrary, wouldn't it be better to change stance and back the right horse, rather than try to 'flog a dead horse'?

Lets face it - he can't talk the market up and he knows it.

I for one remain convinced there is a hidden bias/agenda there.

I agree I can't understand why he constantly tries to talk the housing market up. He has mountains and mountains of information showing how bad things are yet he desperatly tries to create a tiny molehill of good information and gives this to the public instead. If it is because of his profesional reputation he is making it worse. I believe he seriously thinks he is self important enough to influence public sentiment himself.

BNZ is not a long time player in home mortgages.They increased their home mortgage share heavily in the recent years. No wonder they are 'nervous' about their risky lending, and opt for the RE spin.

He said sentiment is improving - he didn't say it was a good time to buy!!!!

And he said that even if sentiment is improving, he notes it doesn't mean that they expect prices will rise.

In other words, if you want to buy a house make sure you have plenty of equity - because we aren't going to risk any of "our" money.

I agree if he cant talk the market up because the market is so hopeless why is it that a small army of self professed experts are saying the man is a fool for trying?

If every available blog in the universe was populated with this small army attempting to ensure that Alexander cannot talk the market up we can guess the market will go down

Who do you guys work for? Whats your angle? Do you want to buy later on??

There is endless talk of vested interests trying to talk the market up in the comments on this site

And endless talk from vested interests trying to talk it down

Are you really so transparantly fraudulent? Do you work for hedge funds?

What is your angle?

Why must you counter all market optimisum with page after page of your demands that the optimists be proven wrong

there has to be an angle here for so much energy being spent by so many to talk the market down

I cant see many are in fact in reality trying to talk it up!

Somebody like me cant even air my own ideas without a bunch of bully boys jumping on me for being some kind of evil paid insider illuminati vested interest scumbag who deserves to be kicked around like i am personally attacking the inside of your brains.

Why cant a person hold an opinion these days? What happened to respect and decency and all of those old fashioned values that people had before the credit bubbles!

All we have now is greed for instant satisfaction

The credit bubble is a syndrome

It does not come from a few economists observing that the market seems to be doing this or that at the moment.

The credit bubble is driven by greed for a result

Greed to get things our own way.

To have what we dont deserve to have

Etc etc etc

sam.p Says:
March 10th, 2009 at 8:31 pm

BNZ is not a long time player in home mortgages.They increased their home mortgage share heavily in the recent years. No wonder they are "˜nervous' about their risky lending, and opt for the RE spin.

>> I hear that as the BNZ didn't use brokers but their own network of 'professional' mobile mortgage managers who were utterly professional when it came to lending criteria. ha ha ah ha.

Kate Says:
"He said sentiment is improving - he didn't say it was a good time to buy!!!!
And he said that even if sentiment is improving, he notes it doesn't mean that they expect prices will rise.
In other words, if you want to buy a house make sure you have plenty of equity - because we aren't going to risk any of "our" money."

My compliments Kate, someone actually takes the time READ what is said, rather than read only what is between the lines.

On the other hand TA knows damn well 99% of people have little grasp of what is actually said these days.He makes carefully worded accurate statements, iknowing they will be taken as reading between the lines....A clever politician working both sides of the coin...can talk up, but if pulled up later can rightfully deign he was "wrong"

The basis on which a con artist works.

From a very simple "today" perspective house prices are more affordable - But only because interest rates have been lowered to very drastic levels. The price increases in response to the lower dollar have not yet set in as retailers are still trying to consolidate high stock-levels.

Once retailers have to sell stock that has been purchased through the current exchange rate and prices go up by 10 -30% on all imported goods (on of the retailers responding to Tony's confidence survey also mentions this) than we will see much greater inflation. Than interest rates will rise again - they must to help fight the coming inflation (Key him self said that inflation is his biggest worry).

I suggest that people stop bickering on this site as to who said what and start thinking about the implications a cost increase of 10 - 30% on almost everything will have on their lives not just new home owners.

And what will happen to the new home owners with a $300k mortgage who are locking themselves in today at a nice low interest rate of 6.5 % for 3 years paying a nice affordable sum of $375 a week? They come off that rate in 3 years and go onto something like 10% = $577 per week or 12% = $692. How affordable does that look?

Lower interest rates does not equal affordability- it just reduces the costs on the asset in the short term.

The secret is that the asset change in value, interest changes in rate but the debt stays the same!

REINZ data in this morning shows house sales rebounding +8.3% in Feb, prices basically flat (median 330 cf 325 in Jan), however median days to sell blowing out to 54.9 (from 48.9 in Jan).
I guess the anecdotal evidence of stabilisation out there, backed up by the BNZ confidence survey, is also backed up by (industry) statistics.