Stats NZ says lower prices for tomatoes, cheese, and potatoes have driven food prices to annual six-year low while prices for petrol and tobacco climb

Now it's all tanking, Longjohndrop is another one who's only just now beginning to understand the economic consequences of cheap debt overindulgence.

"I may have inaccurately predicted a market fall multiple times over several years, but watch me cast shade elsewhere now it's here".

Classic.

Hopefully this painful reset is followed by a recovery that's fueled by something along the lines of a sustainable increase in productivity and cheaper money and much less about selling overpriced houses to each other. 

Probably needs a bit more input than hope.

I honestly think we're on the cusp of some of the worst economic times since the late 80s/early 90s. Things are already looking just as bad (if not slightly worse) than the GFC on a number of indicators. I think the Government doubling down on austerity in an already dismal economic environment is only going to exacerbate the downturn. The whole economy is interconnected. We're looking at thousands of public servants losing their jobs and the flow on impacts of that will be huge, thousands of other private sector businesses that either are suppliers or retail businesses will be impacted, and not just in Wellington. The DTIs came too late, the horse has bolted. For people that say 'oh well, those people should have known better and they're responsible for over leveraging'. Yes, that's true. But also, the Government should have a role in regulating the system so that we don't end up with such high levels of public debt, that put the whole economic system and country at risk.

We have friends in their mid 30s who  married in 2016, and are now at the point in their lives where they want to start a family. As children one of the pair had moved constantly with her parents from rental to rental and did not want the same precarious living arrangements for her own family. They had a 20% deposit saved, and had been waiting for years for house prices to moderate to no avail. In 2021, they bit the bullet (like many others), and borrowed at around 6x their income (which is apparently affording to RBNZ, pfft). Long story short, interest rates jumping up so quickly have basically ruled out having kids for the time being. They are just hanging on with two full-time incomes. Going down to one is unthinkable. This is how New Zealand treats its own young people. 

It especially riles me up when people attribute not owning a house to personal failure or lack of effort, or in the example above, haughtily blame those with no other actual choice. If the RBNZ actually did its job, and regulated the system with a view to supporting fiscal stability - they would not have had to pay the stupid prices they did (I consider median price houses to be stupidly high still). If everybody else had their borrowing ability restricted, then there'd no mad rush to compete on ever higher prices. Some people say "oh, but it's a choice and people need to take responsibility. Why should my actions be limited by the government, I should be able to choose what I pay". That's the problem, if enough choose to pay 6x7x8x their income for a house, then their actions have limited your own choices. Now, if you want the security of owning a home and you have don't the luxury of time, you'll have to pay a price that was inflated due to the poor decisions of others. People need to be saved from themselves.

Divorce is increasingly contributing to the drop home ownership rates. Our neighbours separated after 12 years of marriage a couple of months ago, and had to sell their house which had a mortgage on it. I keep in touch with the wife, and both have been unable to buy a house separately on their own (despite both being skilled professionals and well above median income). Both have moved back in with family members to avoid the financial pressures of living alone.

But looking at this, & this morning’s article regarding building costs…that’s deflation right…not disinflation…& that’s in areas of the economy actually affected by what the RBNZ do? They can’t do shit about council rates & insurance…but it’s like they’ve absolutely f*^ked everything else trying 😬😂

There were punters on here not too long ago saying deflation is scarier than inflation when it’s a lessor of two evils thing 

I'd be pretty surprised by 0.1. Too many big things increasing in the June quarter - rents, fuel, food all higher than March. Very likely to be steep increases in utilities and insurance too, although no hard data on that yet. And the weaker dollar won't have helped with imported stuff. 0.6 feels about right to me. 

Good thing the upsides override the downsides.

Livings cheap as a battery hen, I'll take free ranging it any day.

Yep. 2023 was an expensive year for produce, because of the weather.

Why does the interest rate impact trail off over the last year, despite lending rates staying fairly static?

I have.  Most noticeably, the price of mushrooms has almost halved, got 18 rolls of toilet paper for $10, and a dozen eggs for $2.99.  Its a step in the right direction.

Thanks for taking the time to respond, it was very illuminating. Good to see those favourable conditions flowing through to consumers in the form of lower prices. Must take these opportunities to celebrate rare victories when we can.