Here's our summary of key economic events over the weekend that affect New Zealand, with news metals prices are indicating 2023 may be a year of global economic recovery.
But first, if you are North Island reader, we trust you are surviving the downpours. They have been 'amazing', and not in a good way. And of course, today is a holiday in the top half of the North Island. Many of us will be using the day to clean up and brace for the next atmospheric waves. Hanging on the phone waiting for an insurance call center might be adding to some frustrations. Long waits for repairs and remediation will become the norm as contractor capacity is clearly going to be overwhelmed. Insurers are triaging claims, as you might expect.
So much damage has been done, it will have economic consequences for months.
Elsewhere, China will be returning from its week-long Lunar New Year holiday. Although some may have been in a pensive mood, despite the extreme cold in some parts of the country, there is evidence that 'opening up' has being embraced by consumers. This is early evidence, and the strength of the return is still to be assessed. Beijing is making an effort to encourage consumer spending activity.
Meanwhile, the Indian economy is rising fast, with a growing economic expansion that shines in comparison with China now. But it seems the Indians are just copying the Chinese economic playbook, building it on "more debt" to fuel the expansion. Bank lending rose +16.7% from a year ago. Economic activity rose +7.0%.
It is notable that India's economic and regional strategic power seems to be rising as it slides towards autocracy.
In Japan, their special Tokyo inflation data came in at +4.4% and the fastest increase since 1981. Tokyo prices are considered a leading indicator for national Japanese prices. But it is not clear that this will motivate the Bank of Japan to ease off its ultra-loose monetary policies. They are determined to wait out the current cost-push inflation until it turns into a demand-driven one, accompanied by wage growth.
In the US, we got more detail on the American PCE inflation level and it confirmed the implied rate in the Q4 GDP data. By this measure prices are rising at a +5.0% rate in December which is down from +5.5% in November. But the Q-on-Q rate has slipped away quite a bit to an annualised rate under 2%. Markets liked that data and all rose on the assumption the US Fed is more likely to ease back at its next rate review meeting on Thursday February 2 NZT. (The US January CPI data is not due out until February 15, NZT.)
Also positive is that household incomes are rising (+0.2% in December from November) faster than expenditures which fell more than expected (-0.2%). Consumers themselves are girding for tougher times, it seems. And that may also be a signal the US Fed likes.
Meanwhile American real estate agents are hoping their market funk is easing. Pending home sales unexpectedly rose +2.5% in December from November, the first rise since May, and beating market expectations of a -0.9% drop. Sales were up in the South (+6.1%) and the West (+6.4%) but fell in the Northeast (-6.5%) and Midwest (-0.3%). Still, year-on-year, pending home sales sank a whopping -34%.
So perhaps it is no surprise that consumer sentiment improved in January, even it was only by a small amount and is still historically low.
In Australia, there is evidence price pressures are easing for businesses. Their producer price index rose +5.8% in the year to December, but only at the annualised rate of +2.8% in the December quarter from the September quarter. We won't get to know how our PPI data tracked in the December quarter until February 21.
Meanwhile, as January draws to a close, Sydney housing market observers are expecting their real estate weakness to mean median prices there have now fallen below AU$1 mln. That will be more than a -12% fall over the past 12 months, down from AU$1.14 mln a year ago (all dwellings). In inflation-adjusted terms, that fall is now approaching -20%. (-12% nominal when consumer prices rose 7.8% over the same time.)
Globally, we should note that some key metals, like iron ore, tin, zinc and aluminium are all now at six-month highs. Dr Copper has joined that group too. These gains are all on the basis that the US will still keep growing in 2023, China will recover, and India's rise will extend. Interestingly neither coal nor oil are in that group. Inflation-adjusted, the oil price is really languishing, hurt by mountains of Russian oil that has few customers, and those it does have are low-balling the price.
The UST 10yr yield starts today at 3.51%, and down -2 bps from this time Saturday. The UST 2-10 rate curve is inverted at -69 bps and little-changed. And their 1-5 curve is still at -107 bps. Their 30 day-10yr curve is now more inverted at -106 bps. The Australian ten year bond is unchanged at 3.56%. The China Govt ten year bond is also unchanged of course at 2.96%. They will be back trading today. And the New Zealand Govt ten year is starting today at 4.16% and also unchanged.
The price of gold will open today at US$1929/oz and very little changed, even from week-ago levels.
And oil prices start today low at just over US$79.50/bbl in the US even if they are +50 US c up from Saturday's level. The international Brent price is now at US$86/bbl.
The Kiwi dollar is little-changed, still at 64.9 USc. It is also little-changed in a week. Against the Australian dollar we start today at 91.3 AUc but that is down -1.7% in a week. Against the euro we are still at 59.7 euro cents. That all means our TWI-5 starts today at 71.5. For the week however we are -30 bps lower.
The bitcoin price is firmer today, now at US$23,631 and up +2.2% from this time Saturday. Volatility over the past 24 hours has been modest at +/- 1.5%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
Daily exchange rates
Select chart tabs
124 Comments
We looked at this in another thread the other day and (provided my maths is correct) the amount of water injected in to the atmosphere is something like 0.00003% of the total amount in it. While that may have some small effect, the larger effect is going to be the warmer atmosphere that can hold significantly more water vapour. Add in La Nina and that is going to create perfect conditions for large dumpings of rain in NZ
EDIT: I take some of that back: https://www.nasa.gov/feature/jpl/tonga-eruption-blasted-unprecedented-amount-of-water-into-stratosphere
although they do say this
In contrast, the Tonga volcano didn’t inject large amounts of aerosols into the stratosphere, and the huge amounts of water vapor from the eruption may have a small, temporary warming effect, since water vapor traps heat. The effect would dissipate when the extra water vapor cycles out of the stratosphere and would not be enough to noticeably exacerbate climate change effects.
Afraid to say insurance premiums will not be, let’s say dampened by Auckland’s dire event. All of New Zealand’s landscape is not much less than a danger zone. You name it, it can happen. Be interesting then to view the growth in what percentage of households in New Zealand are forgoing insurance because they simply cannot afford it?
Here is a copy and paste statement from a stormwater engineers linkedin post over the weekend: 'Auckland appears to have had much greater than a 1 in 250 year 24 hour event (needs fact checking) and they seem to have had multiple storms around or larger than a 1 in 100 year in the last 12 months.'
Unfortunately this just provides weight to your statement..
Pretty self explanatory isn't it ? We have never had a flood like it in Auckland since records began. Its a 1 in a 100 year event, well it would be without climate change because that can rapidly change from 1 in 100 to 1 in 10 or even 1 in 5. Problems like this in the other extreme are like drought in Somalia, they can cope with like a 1 in 10 but suddenly it's 2 or 3 years in a row and all your livestock dies and you are force to migrate or die. The fact that this new "River" flowing from the tropics due to the sea warming could result in floods in the upper North Island every year. This is the key thing with climate change, it's exponential, things that have never happened before start and the frequency rapidly increases. Auckland could turn into the new Amazonian rain forest in a matter of years.
That's the question I'm trying to ask.
Are these events no longer 1 in 100 year events because frequency is increasing. In which case (obviously I guess) councils will be re-writing land use and insurers will be recalculating premiums.
Or are recent extreme events collectively 1 in 1000 year events, i.e. we would only expect to see so much extreme weather in a short time frame every 1000 years.
The return probability is based on data we have collected so far. Fairly basic statistics, where one can gauge probability and standard deviations based on a sample size. It'd be a wee bit far fetched, to consider the data collected to date was not representative.
As an engineer, I use NIWA data for design purposes https://hirds.niwa.co.nz/
A general Auckland rainfall depth for a 1-in-250 AEP event (annual exceedance probability) for say 24hours is around 200mm (noting we generally design piped systems for the 1-in-10 year storm, provided secondary overland flow paths are available). I understand we got something like 250-300mm in that time, and even more intense short-term rainfall. I'll await the official stats, but I'd say we'd likely call this a 1-in-500 year event. It's certainly far beyond any scenario I'd have ever considered.
Does the question then become how much of that excess that is beyond present capacity would we need to hold back to allow our present systems to cope? EG if all existing properties(that have the space) were to install a 10,000 liter holding tank to capture this excess from their hard surfaces, would that make a difference?
You can carry out your own thought experiment here. A 10kL tank is around 2m x 2m on the base, and generally only catches roof runoff (something to do with gravity). Then have a look at the depth and extent of flooding, and decide for yourself if such a solution might be practical (hint: it ain’t).
If we do need to allow for such rainfall events in the future, I see us building up, with sacrificial ground floors. Bit like COVID, we’ll have to adapt to life with it.
Problem is it can go from a 1 in a 500 year event to a 1 in 10 year event pretty fast with climate change. If that stream turns into a regular event or even typical every year who knows. Various weather events are predictable or have been, monsoon rains the Shamal winds etc. With the continued warming of the ocean the frequency could turn this into a "Regular" annual event with varying degrees of severity from next to no effect to flooding.
Or perhaps realized what a scam insurance has become. You subsidize buildings that are built in the wrong places, farmers that claim on dilapidated sheds, buildings that are falling down, even the miraculous burning house that the owner is down on his luck. Wink, wink.
Oh, how I like a conspiracy theory.
Christchurch ratings valuations out this week. Tenuous connection to actual value or not, it will be interesting to see: a) how and where RV's have changed since 2019, and; b) how this will be presented in the media
https://www.qv.co.nz/services/rating-valuations/rating-revaluation-sche…
The suspicion lurks that deep in back rooms of council minds are thinking hey look at all the extra money homeowners now have in the value of their home. That must mean they can afford to pay more rates so we can build cycleways to the airport and more, even the new one in Central Otago.
All of that understood and within that of course is the outcome that the higher the value of your property the more rates you pay pro rata, which in itself is a form of wealth tax as the actual services being used by a higher valued property might well cost less than one of lower value. My above point was not about that it was merely speculating that certain elements in council(s) might be tempted to think this extra wealth now owned by households might be handy to tap into and be used to justify pegging an increase to the annual rate total set accordingly.
Be kind, Dawn Baxendale needs another payrise for all the hard work she's doing, so chip in your fair share and stop your whining. There's also a swimming pool that nobody ever in a million years would have guessed would go over time and budget, so don't forget that.
I think all the people who were crawling over themselves to proclaim bitcoin and crypto dead are going to get a serious dose of humble pie over the next 24 months or so. To an extent that may include myself given that I'm mostly in cash this year. This will be a challenge for me, watching the markets accelerate while I'm earning 5.3% (but I expect some downwards action too)
One of my bottom indicators is when Mike Hosking goes on a rant about crypto being dead and how he told us all and was right the entire time. The last time he did this was at the bottom of the cycle in late 2018. I can't find the link, but his second rant almost perfectly timed the bottom of this cycle (so far) around Nov 2022. I should put Hosking on my christmas card list because I bought some on that very day.
Basically don't store it on an exchange.
I just make a weekly purchase of a couple of cryptos (ETH, and then rotate through a few others that are of interest to me) via Easy Crypto. I have a wallet set up on my device, with its keys fully backed up and securely locked away.
As long as my keys aren't compromised, it wouldn't matter if Easy Crypto failed (although that is not an exchange anyway) as I have the storage.
Where most of the big losses come from (outside of buying either clear "scam coins"/rug pulls, or buying at the absolute peak of the market) is keeping everything on an exchange - when the exchange folds, you are $hit outta luck.
That doesn't stop me losing "paper value" if Bitcoin/ETH/any of the other cryptos I hold in my wallet go down in price, but it does protect from exchange collapse and loss of control.
For someone who doesn't fully understand the practical side of storing crypto, my concern is that once it's gone, you can't just phone up the bank. House burns down, bye bye cold wallet.
Do you have clone wallets for redundancy? e.g. One at home, one at work, one in the rafters in nan's garage etc.
Do you have clone wallets for redundancy? e.g. One at home, one at work, one in the rafters in nan's garage etc.
The wallet is irrelevant. It's about the private keys to the wallet. We're talking next level personal responsibility. Most people are not conditioned for this.
Ah cool, I've done some "goggling". So you can lose your hardware wallet, but as long as you know your phrase you can just get a new wallet and voila.
Definitely next tier personal responsibility. Heaven forbid you die young, a good chunk of your wealth is in Bitcoin, and you didn't quite trust your wife/kids with the location of your seed phrase yet. My wife doesn't know my EFTPOS pin, let alone my internet banking login.
Maybe Google in case of emergency folder for loved ones. It's really hard if you have an accident etc and they don't know who the lawyer, accountant, investment companies etc are. Where the will is held. If you don't want to share it all in real time, then consider having it all somewhere that they know to look if needed.
Very easily. Withdraw from the exchange and keep them in your own wallet. Simple as that. Don't deposit into any third party centralised account that controls your funds.
I barely even use exchanges these days, I even do most of my trades on decentralized exchanges (where you maintain full custody of your assets)
"So much damage has been done, it will have economic consequences for months."
Indeed.
And the question for us is "Are we going to make it more expensive for those who have lost everything/a lot to rebuild their lives, or more expensive as we did in Christchurch?"
Christchurch could have been rebuilt for a far lesser cost had the price of land been lowered by freeing up the massive amount of land tied up by subdivision restriction from being built on. Because...it might have affected the price of land across the country.
The same might apply in Auckland. Are we going to be frightened of lowering the cost of land - that, let's face it, many are going to have to relocate to now as their current homes are 'worthless' even if they survived actual damage; they are now in well-defined no-go areas for any future buyer.
We are about to find out.
Really?
Would you be happy living in the house next door to the one that's collapsed, or anywhere near it?
That's the problem now. It's not the 'tiny amount of properties' that have actual damage, but those who survived but now find themselves living in a zone of danger. And that...will be highlighted on a lot of properties titles now when it wasn't before. A lot.
What do those people do now? Stay put forever, and listen to the rain every night? (as future buyers won't be paying anything like what they did this time last week) Or try to move to another location. And if so, is making it cheaper to do so a solution? The answer should be obvious.
And how many will now live in the recalibrated Flood Zones that will now be done as a result of this event? That.. is the big picture.
How many will now have their LIM marked? Thousands, if not tens of thousands - and not just in Auckland. Would you contemplate buying a property in what will now be designated a Severe Flood Zone? Maybe. But not at anything like the current price.
Some of them have fallen down (or are about to). Height does not guarantee safety once soil is saturated, which has been illustrated perfectly in Remuera and some coastal suburbs as well as in Tauranga/Waitomo/Te Kuiti/Coromandel (this week). And if the forecast is correct slips are going to be a real problem in the next few days - I hope the forecast is wrong, because if it isn't this situation is far from over.
Yes, I agree. I'm just not sure when new rules apply if these weather events get more common. Hills that have always been stable may become less so. Not that you can plan for everything, I just don't think things are going to be as clear cut in the future with the weather extremes.
My friends house is waiting for inspection. But even if it is safe (not stickered) that doesn’t mean it doesn’t need a massive insurance claim. My friends house looks safe for now but they have lost a big part of their section and probably their garage. Not sure what an insurance company does in that situation as the value of the property has obviously decreased substantially due to the flooding.
No -people should not stay put forever. Identified areas should be redeveloped for other uses. That should be a role for the Panuku development agency. On built up residential areas all along the Mississippi River in America city based Development arms came in during the 50's to the 90's and condemned frequently flooding residential areas, and turned them into Light Industrial or Heavy Industrial, and then protected those areas by dikes, but if breached (and they have been) by major floods the resulting damage has not been catastrophic for families. Further American's use of "Municipal Bonds" fund these city owned agencies. Sometimes they hold the land for decades before finding a developer to repurpose it. In the end if fulfills a social contract for the cities residents.
If it’s like the recent Napier floods then pretty much anything that gets wet will be replaced, so it’s not not just building work but furniture, carpet, insulation, cars (repairs and replacement), clothes, etc. The insurance companies will be pumping billions into the Auckland economy at a pretty bad time to do so.
I know of a number of properties near us that need substantial repairs. A friends house near a cliff is probably written off including the section.
Agree water damage is worse that some minor cracking from earthquakes (just talking the minor damage not full on earthquake damage here). With water damage the whole house, outside cladding, Gib etc all needs to be stripped off. Re wire the whole house etc..before you move back in. Depending on internal framing that may need replacing also as not designed to get wet.
Would have made zero difference if he had called a state of emergency before the rain even started, the outcome really wouldn't have changed much. Possibly even more deaths with more time given for some people to think that somehow taking a kayak into raging storm water was a good fun idea. May have saved a whole pile of cars if they had parked in higher ground but your house is going nowhere or else if it does its down the hill in a slip.
I will let you in on the secret Jimbo, pretty much all politicians and bureaucrats are useless, that's why they are in that job in the first place. If you are running your life in the hope that any of those clowns are going to somehow going to save you its time to change direction. Help your family, help your neighbours and even help others in your street.
It's a factually correct comment from an engineer that doesn't sugar coat bullshit. Refreshing.
I drove past all the flooded new builds at the bottom of universal drive while it was happening and it was painfully obvious that they'd been recently shoehorned in on low ground next to the creek where they had no business building.
No point ass covering and politiking. It's best to be honest about mistakes and prevent them happening again.
The thing is many places are built on land they shouldn't be, and many of us know this. Another example is brand new suburbs in Thames - a flood plain at the end of a river on the coast. The issue is that the statement is not helpful in the current situation despite how obvious it is. He is getting information from loads of different people, I'm assuming, he is at the centre of all of that, he is the local leader of Auckland. His job is to take in all that info, find out if he isn't getting the info and deal with it while informing Aucklanders of what the current situation is, what is being done, where to seek help and to update this at least daily (hourly on Friday night minimum). '
And that's before even discussing how his role, as Auckland Mayor, legally enables him to do things no-one else can do. It's called Leadership. It's what you do when you are at the top. It's what you are paid quite a lot of money for. No-one denies how rapidly things changed, no-one thinks he is to blame for the event, but the optics (and more) are bad when he is saying 'We need the rain to stop' - well quite. 'It's not my job to run around with buckets' - no but you are in charge of overseeing all the bucket carriers with the help of other subgroup leaders of bucket carriers, who are busy with their little patch and are not keeping up with the news from all the other bucket carriers. And then the Kim Hill interview comment re: the Wellington Mayor wouldn't do any better in a earthquake - good grief. l mean what do you even say to that? And the press conference - well, just watch it, it speaks for itself.
You cannot seem to take facts Jimbo. There are a whole pile of houses that shouldn't be built and are still being built all over the country. One of the specific reasons I bought my house 2 years ago was because its on high ground. If the council needs a kick in the arse its because they never clean the stormwater drains out and they block.
Which facts are those? As I said above the council can’t just deny building consent, they must have a good reason why a building does not meet the building code. If an engineer says the ground is stable or can be mitigated with piles etc the council would find it hard to prove otherwise. They can’t just say “nah mate that looks a bit dodgy”.
And a lot of houses that have flooding would have been consented decades ago before global warming even existed. This was the worst rain ever recorded in Auckland by a large margin, it may have been inconceivable a few decades ago. Most new developments have very high drainage standards, I’m sure the likes of yourself have also complained about the cost of new builds and red tape like engineering reports.
Are you saying aggressive zoning has worked well? We don’t have enough houses and we have flooding issues! The current zoning rules go something like “don’t build in the obvious places because rich people don’t like it, instead build where there is no transportation or amenities”
Had they allowed high density near the city like Epsom and Mt Eden decades ago then we would have much less transport issues and much less flooding as they could have concentrated the infrastructure on one smaller area. Instead they zoned everywhere but near the city as highish density, a recipe for disaster.
No I didn’t say that.
Over at a Greater Auckland they advocate for no zoning, or effectively none. Density everywhere! With the totally misplaced view that it will solve housing affordability and public transport viability (it most certainly won’t- it will simply spread density out in to all parts of suburban areas, and roads will only get more clogged)
The zoning in Auckland was sub-optimal for a very long time. The seeds of Auckland’s housing crisis lie with the lack of action on zoning in the period 2000-2008. Some of us were advocating strongly during those days for much more action on higher density zoning, but we didn’t succeed.
The unitary plan got it about 70% right, and the Government’s National Policy Statement on Urban Development brought things up to close to 100% right in terms of zoning - requiring high density zoning within walking distance of train stations and mid to large size centres.
However, the medium density residential standards which allow medium-high density development through most of urban Auckland are a joke and will create lots of unintended consequences.
The main issue in New Zealand (maybe a world wide phenomenon) is that our cities are all centered around some of the worst places to build.
- Auckland - the narrowest strip of land across the main body of NZ meanwhile South of Bombay you have tonnes of flat land. Sure, it's farmland, but you could fit all of Auckland in between Hamilton/Cambridge/Matamata/Morrinsville.
- Wellington - Another narrow strip of land surrounded by water meanwhile just over the hill there's flat land for miles in Wairarapa.
I guess it's all too far gone. It's not like we can pick up 2 whole cities of skyscrapers, warehouse etc and just conveniently plonk them elsewhere. But rather than try cram more people into the same shitty locations, why not incentivize ways to move industry, jobs and people away from Auckland?
Zoning isn’t normally at the individual property level. They don’t normally assess every individual piece of land to access its safety. And even if they did the land owners have rights too, they can go through resource consent and again if an engineer says it’s safe the council wouldn't have much reason to exclude their property.
In most cases these are cliff top properties probably built decades ago.
I used to think the councils were too OTT with building regulations, but they are actually in a pretty shit position where we need more houses but most of the best locations are already gone. The are damned if they say no and potentially liable if they say yes.
But if you think councils are so useless, why do you want them to be responsible for three waters?
He certainly spoke as an engineer - and a pragmatic one at that. He has been known to upset Clients by advising them not to do silly things, like put a house on the edge of a cliff, or in an overland flowpath. I'm sure they're all thanking him now.
Do be aware too, that Council are not God-like in allowing various developments proceed, being highly dependent on external design professionals to guide their decision making process. Perhaps your angst would be better directed at these consultants, querying whether or not they had fully discharged their professional responsibilities, or if their design guidelines are entirely adequate.
Well let's track Wayne's progress as he fixes Auckland with his "blunt" approach,
"It wasn't a major issue until late afternoon which is certainly when it became different from a wet day. At that stage I never left my desk and I communicated.
"Unlike some of my councillors, I represent the entire district. I'm thinking of all of Auckland and it was very hard to get a clear picture of what was happening across all of Auckland. There's no sense communicating if you haven't got clear stuff to communicate."
Mayor Brown then left the press conference."
Oh please,he's a crap communicator,he struggles stringing a few words together in English,let alone Te reo.Whether some of his comments were factual or not about where houses were built had no place in that presser.It was to be a leader &communicate clearly what was happening.
He turned into a blame game,trying to cover his a** by pulling in those around him to speak....the exact so called experts etc that he said councils don't need...just him and a couple of mates from Mangonui could run this place...no point trying to defend the indefensible.he looked like Jo Bidens dad on day release from the dementia ward.
Up until the weekend,his biggest issue he had was on the few days he came into the office,he was annoyed the council couldn't procure him a beer fridge!
"..A self-described “moan” of an email sent by mayor Wayne Brown has berated Auckland Council chief executive Jim Stabback over a list of procedural inadequacies - including financial reports “with no numbers”, an inability to stock a beer fridge, and advertising 400 jobs when managerial cuts “are more than on the cards”."
I reckon RAND is right. There are bunch of people in east and south Ukraine who want to be on the Russian side of the border anyway. Even if it's a bad decision for them, let them have what they want.
But Putin and Zelensky are major problems - won't give an inch and are willing to let everyone pay anything for their obstinance. So my bet is still that this will run for years, with the odd ceasefire or lull. It's unresolvable except through violence.
The war is one of the main reasons I think we are stuck with sustained inflation.
It's a really bad sign for everyone. Just don't call it unexpected.
Intel's earnings and guidance were truly epic, for all the wrong reasons. Heed these big name warnings, which are only too consistent with market positions and increasingly economic data. They are all pointing us toward a near-term future which is likely to produce a lot of tears before it's over.
NZ needs more socialism to fight neoliberalism it seems:
abolishing the Goods and Services Tax (GST) and replacing it with a wealth tax on the richest 5 percent of New Zealanders would be an instant huge redistribution of wealth from the rich to ordinary workers
Would he [Hipkins] take other less dramatic steps in the same direction, such as making the minimum wage a living wage this year, or bringing in a capital gains tax?
We need a new left-wing party in Parliament. Te Pāti Māori are currently more progressive than they ever have been
I agree we need to a gradual push to a mixed market economy from our current libertarian approach to markets. Not a perfect system, but economies more successful than ours practice a certain degree of interventionism. I'd rather the government use carrot-or-stick to keep businesses operating fairly (regulation & monitoring) and productively (incentives), rather than use the funding to keep the ambulance at the bottom of the cliff (welfare patchwork).
I was in Singapore for a few days a few months ago, there’s plenty of approaches I admire there, including, topically, their approach to flooding and stormwater management. The engineering approaches but also their urban planning approaches around requiring planting and green areas in urban development (aesthetic as well as engineering and climatic benefits).
I like their housing policy too, especially the leasehold housing system run by their government.
How about somewhere in the huge parts of Auckland that are zoned Centres, Mixed Use, THAB or MHU.
And since I am talking about government leasehold, even better - the government has huge areas of land and it has special development powers under the Urban Development Act. Or if they don’t want to develop their own land, go in and compulsorily acquire some land some where, where land bankers are taking the piss eg. Crown Lynn Yards in New Lynn.
oh, but that’s right, the market will solve everything, if we just let it, by having very little planning regulation… Sarc on
Construction, property maintenance and building insurance costs are the main driver of non-tradable ('domestic') inflation - accounting for about half of the non-tradable CPI over the last 12 months. Local Govt rates account for another decent chunk (about 7%). I wonder what a huge repair and rebuild programme will do to the demand for construction that RBNZ have been trying to kill off with interest rate hikes? What will that demand spike mean for the prices of building materials? How do we think the share price of Fletchers and Carters will do today?
This large scale, very expensive catastrophe in the NI is not going to be good for inflation. It will increase non-tradable inflation, and no amount of OCR raising is going to help make the repairs or rebuild cheaper.
Edit; I posted my comment after reading the article, but before reading the comments. Now I have, and see Jfoe, we think very similarly!
Banks will likely announce rate discounts for affected homeowners seeking loans ir top-ups to rebuild their homes. I know mates who got below market rates to fix up their properties after the 2016 EQ.
Higher borrowing rates should help ease demand pressures on construction in the rest of the country and allow resources to be refocused towards the upper North.
All this is thereotical anyways, but so is the OCR setting process.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.