The home ownership rate has dropped from 74% of total housing stock in Q1 1991, to 67% in Q4 2024.

It's such a pity... and people wonder why folks are leaving this country..

Housing is a curse for many,  so if country were to change for the better, Housing has to be a focus from the government...

rented properties have been increasing at a faster rate than owner-occupied ones.

Its all those Kiwis leaving for Australia and renting their houses out while "waiting for prices to recover" so they can sell them.  

There are a number of non owner occupier residential property syndicates operating to combine their financial resources to increase their buying power (and borrowing power) to outbid owner occupier buyers in the existing residential real estate market. (Remember, non owner occupier buyers are able to borrow up to 7x DTI vs 6x DTI for an owner occupier buyer)

To maximise the cashflow from the non owner occupier residential property, it has got to the point where these non owner occupiers are:

1) renting out residential dwellings on a room by room basis (rather than the entire dwelling to one tenant such as a family) in order to maximise the cashflow

2) renting out on Airbnb / Book a bach - though some changes on the Airbnb platform may now have reduced revenues and made this less financially attractive than renting out in the long term rental market.

3) adding rooms to rent out

4) adding other dwellings on the property to rent out.

This has been the impact of re-introduction of interest deductibility for non owner occupiers in the EXISTING residential dwelling market.  Some non owner occupier owners are willing to go into negative cashflow for the potential untaxed long term capital gains (i.e after 2 year brightline test which was reduced from 10 years)

The buying advantages of non owner occupiers over owner occupier buyers in the EXISTING residential real estate market:

1) 100% financed purchases of residential real estate (due to equity release / deposit recycling techniques)

2) interest only financing

3) interest deductibility

4) combined buying power of residential property buying syndicates

5) 7x DTI vs 6x DTI for an owner occupier buyer

Owner occupier buyers (especially first home buyers in Auckland without assistance from or access to the bank of mum and dad, and an inability to take on "boarders" or rent out a room on Airbnb) are unable to compete with those buying advantages given to non owner occupier buyers.

Was it not late last year that it was reported that home ownership was rising?

Governments come and go but the percentage of rentals continue to gradually grow. The same is happening in many other countries also. The silly thing is many governments in NZ plus those places we copy laws from like UK and Australia have been passing laws to make it harder to provide rental homes. Things like stamp duty, congestion charging, lending rules, and tenancy laws. All these poorly thought out impediments just help to push up rents and this traps even more people into being tenants for life.

MY RECENT RANT - IN THE YEAR 2025



INTRO - Warning, this is not uplifting, and not the least because of the completely new global financial territory where the U$ is losing its reserve currency status - also the fact that it will begin to lose its default currency status as well, as the true state of the economy and its currency is gradually revealed.



As the default status dissolves we will witness a currency failing upwards, before it finally reveals its true value. It will appear to be strong but only in regard to the other fiats which are all heading in the same direction, just at different velocities.



A cursory periodic glance at the 'rock relic' that has been an accurate measure of goods and services for some 5000 years will tell us how far gone they are - hint - all of them have lost more than 99% of their purchasing power - the remarkable thing is just how short that timeframe has been - until you find out how pitiful the average life span of fiats has been - more on that later.   



Add to this the dozens of geopolitical flashpoints across the entire planet, and I would throw out 90% of the graphs and charts that we routinely use to make our forecasts and accept the fact that we are experiencing a brand-new global financial paradigm and entering uncharted territory.



So too the fact that the eCONomic mysticism is being exposed as the mother of all crocks, that all fiat currencies are in their inevitable debt-death final phase, that interest rate manipulation as an effective monetary tool for the control of inflation is being finally shown up as utterly farcical, and we have the makings of the mother of all shambolic years.



BRICS - this factor alone challenges all of the old rules    

Note that Indonesia just signed up to BRICS and the list of countries has become so long that they have had to suspend applications to enable them to process the prospective members. Just to add to the volatile geopolitical mix, Brazil (the 'B' in BRICS) is also under attack by the Western financial/military hegemon which desperately wants to maintain its unipolar hold on humanity.

https://globalsouth.co/2025/01/13/brics-under-attack-in-brazil/

SOME PERSONAL OBSERVATIONS

#1 The latest U$ job reports point to a FIRE (Financial, Insurance, Real Estate) based economy in continual decline with the latest employment data showing jobs in manufacturing and construction flat, with most of the growth in service, retail, and govt. employment.  The UE data has to be taken with a sack of salt anyway given that multiple part-time jobs  are lumped in, plus people no longer looking for jobs and as such are not included in the data either.

#2 Two months into the latest U$ fiscal year (beginning Oct 1, 2024) shows a $624 billion fiscal deficit, which could run out to anywhere from a $2 - $3.7 trillion deficit by fiscal year's end.

#3 Will DOGE be able to trim Federal spending to even match the negative offset in revenue received from a floundering economy? - I doubt this very much. This strategy has been estimated to knock out around $2 trillion in GDP, or around 7% - but they were calling for a 3% growth rate before this idea - this nets out to a dismal negative nominal 4%.  

#4 There are huge unrealised losses not shown on the bank's balance sheets because they loaded up on Treasuries and mortgage-backed securities when rates were 1-2% and now with rates at 4-5% they are trading at under 1% (down to 70-80 cents on the dollar). They will mature at par - but this is a gut punch because real inflation is at least 10% meaning these assets are losing value at a compounding -9% annually.

#5 As I see it, Dah Fed has only two options - (how would you like to die?) -

(i) Fire up the printing press like crazy and KILL THE DOLLAR.

It's 99% gone anyway - why not go for broke - this is historically the choice that those in the hot seat make.

A very simple calculation is to look at the price of gold in 1971, just before the U$ went off the gold standard - a 40 oz bar of gold cost $11,000. Around the year 2000 it was up to around $100k, and today at say $2,600/oz it comes to ~ $1.1 million for the same bar.

That, as near as damn is to swearing, amounts to a loss of 99% of its purchasing power in 53 years. Incidentally, as I have mentioned on this forum before, the average lifespan of all fiat currencies in history is only 35 years - it appears that king-dollar is already 18 years overdue for the great fall off the wall.   

(ii) Cut back on everything, tighten the screws and KILL THE ECONOMY even faster - normally not the option chosen as the politicians don't want the implosion on their watch.  

#6 As I see it, the risk-weighted organic direction for global interest rates, regardless of what tricks dah Fed and other CBs try, is upwards. That said, I cannot see IRs reaching the 7-10% territory without the entire fiat casino coming down like a house of cards - let alone even remotely approaching the territory during the Paul Volker debacle when the prime rate peaked at a mind-numbing 21.5% in 1981.

A MAJOR CAVEAT FOR #6 - IR manipulation as a monetary tool is a complete crock anyway - it is a sleight of hand designed to thieve from the real economy and to continually transfer wealth to the rentier* sector.

*(The term “rentier” refers to an economic agent or individual who primarily earns income through interest, dividends, and other financial returns from investments, rather than from labour or entrepreneurial activities. This class of income is often termed “unearned income” since it does not arise directly from productive work or business endeavours.)

IR (Interest Rate) hikes are directly and immediately inflationary, just as hikes in energy prices are too. Indeed it is completely farcical to even suggest that they could ever be an inflationary control tool - they are the 180˚ polar opposite of what they are dressed up as.

Historically, with the incorporation of the constitutionally illegal U$ Federal Reserve model, it became the precursor for the central planners to expand their theft from Mainstreet on a grand scale - all the while, the key private banking baron culprits remained ensconced behind the scenes as the puppet masters, busily tugging on the strings, and aided by all manner of smoke and mirrors.

The Fed is one of three 100% privately owned banks on the planet - the other two being Italy and South Africa. A private cartel monopoly ownership is the perfect model to enable the theft of a nation's wealth by a tiny group of plutocrats - as the trite saying goes - "the easiest way to rob a bank is to own it" - also, being their own in-house regulators, plus not being audited since 1953, makes this about as easy as stealing candy from a baby in a pram.  

This coup was all about centralising money creation, but it was sold to Congress on the basis of the Fed being the mechanism that could step in and save banks in the event of a run on deposits. They did exactly the opposite, and in the 1930s, as a direct result of the pump-and-dump debacle that they themselves had orchestrated, there was a huge attrition of small banks, and of course, along with them the liquidity they provided for the real economy, and especially the rural sector.

The Fed sat on their hands and let these banks go under, whilst their biggest member banks gobbled them up for a pittance, and the depositors (read unsecured creditors) lost all their money. Worse still, the farmers were made to repay their loans to the big banks or forfeit their farms. This in turn, led to a massive plummet in agricultural production and abject starvation for much of the vulnerable sectors of the economy.

This was a huge coordinated land grab - precisely what they are gearing up for right now - the DTCC, and Cede & Co. wait in the wings like vultures hovering overhead for the next big land grab.

"The Great Taking", a very concise free PDF (in the link below), explains what they have in store for those of us who fancy that we own paper assets and mortgaged real estate.

WE DON'T - we are the last in line unsecured creditors - how is that going to pan out when the total nominal value of derivatives is between $2.5 - $3.7 quadrillion. In fact, we are merely discretionary beneficiaries in a giant shadowy trust set up without our knowledge - the 'T' in the DTCC acronym gives that away - it designates the word 'Trust'.

'Cede' means to surrender possession - TPTB love to taunt us with word games and labels on one hand, as they thieve from us with the other.

https://thegreattaking.com/read-online-or-download

Back to the global derivative debacle - IOWs it is 26 - 40 times the annual global nominal GDP. What makes this even worse is the fact that a huge chunk of the nominal GDP figure should never have been included in the calculation in the first place. 

National income accounting (GDP tripe) harks back to the late 1600s when a couple of Dutch bankers ran the numbers in time for the launch of the Bank of England in 1694, and to try to arrive at a figure where govt. debt obligations could be reconciled accordingly - the system appears to be some 330 years out of date - time for an update perhaps?   

Some of the individual bank's derivative books are outrageous too - from memory, Goldman Sachs about a year ago was roughly 1200:1 (Derivatives:Equity) - with Citigroup (the largest shareholder at over 40% of the New York Fed), a whopping 330:1.  

#7 The more banking is centralised and the local community banks are restricted by regulation, the more money creation flows into asset portfolios - IOW existing assets, rather than Mainstreet's entrepreneurial sector, which is the engine of activities and sustainable societal wealth. Generally, within the status quo financial system, banks are in effect penalised if they lend for productive business purposes - this involves following the Basel, (Swiss-based) BIS (Bank for International Settlements) - NZ is one of the 62 member-bank affiliates.

As I have said before ~97% of money is created by these banks (NZ has a pitifully small number of banking entities) and is devoid of any window guidance whatsoever as to where the available liquidity is placed.

When banks lend there are 3 main scenarios...

(i) When this money is used for consumption it naturally leads to consumer price inflation because it adds to the money supply, but not to the supply of goods and services - more demand chases the same fixed supply of G & S (Goods and Services).

(ii) When this money is used for financial and asset purchases it leads to asset price inflation, with extreme examples like the Japan property bubble of the 1980s that ended up bursting spectacularly and only very recently regained the market cap ground that it had lost 30-something years earlier.

(iii) If banks conduct adequate due diligence in their lending for productive purposes, this by definition creates more G & S, creating sustainable income flows for the borrower to both service and repay the loans.

In an economy that has many banks, that are also backed up by non-banks making loans for productive purposes, then economies could be looking at sustainable real growth of 10-20% as opposed to low single-digit growth or even negative nominal growth, let alone growth that is inflation adjusted.

= LEADING TO MINIMAL CPI INFLATION OR ASSET PRICE INFLATION

Case in point - the EU - the ECB has killed off some 5000 banking entities in the last 20 years. However, the appointed (read unelected) financial European Commission executive, shills for the global financial plutocracy, and this situation can never be addressed without massive fundamental political reform.

Conversely, under the U$ Federation's Governance System, where individual states have constitutional monetary and fiscal policy autonomy, with a modicum of common sense this can be readily achieved.

In fact, from small beginnings with just one solitary, but spectacularly successful model - the 105-year-old Bank of North Dakota, we now see ~35 states moving towards implementing sound money, state depositories and Public Banking Solutions (PBS), so that they can begin to protect their locally generated wealth, and insulate themselves from the profligate federal financial casino. 

With this number of states wanting to insulate themselves from the suicidal Federal govt's. 'policies' it kind of beggars belief that any Canadian, with more than half a brain, would even entertain the idea of their resource-rich country becoming the 51st U$ state.

I wonder (sarc) if the sales package includes the disclosure that the average U$ taxpaying citizen, when you include unfunded liabilities, has a total debt burden of between $1 and $2 million dollars?  On the contrary, many U$ states are talking more and more openly about secession.

SUMMARY

The only certainty for me in 2025 predictions is that the year will be a hats-off wild ride - barely two weeks in and the geopolitical uncertainties compound on a daily basis, to the stage where it is very difficult to keep up. For the life of me, I cannot see us getting to the end of 2025 without a systemic financial meltdown.

Both the EU and NATO are now toast, particularly with Germany being rendered an uncompetitive industrial cot-case by its occupier - the one that also severed its energy umbilical cord from Russia. Theoretically, if the population can lift itself out of its current terminal case of Stockholm Syndrome, vote in a government that is devoid of an economic death wish, and begin looking East and South, not West, there might be a faint chance of some degree of modest recovery, otherwise, IMO Germany is gone for all money.

The two next biggest EU economies are France and Italy and they have monumental financial challenges too.

In the meantime I will be looking closely at the big European G-SIB institutions and their equity positions - these include HSBC/Barclays/Credit Agricole/Deutsche Bank/Groupe BCPE/UBS/ING/Societe Generale/Standard Chartered/etc.

A liquidity event in any one of those giant institutions could trigger a global domino effect, especially as the derivative positions unwind like a broken spring in a worn-out builder's tape measure.

Europe is the birthplace of the global private banking con - it may well turn out to be its nemesis too - poetic justice perhaps?

The scenes remain familiar - from Rome and Venice to Holland, Basel, the City of London, and the long shadow cast by the 'Old Lady of Threadneedle Street' - fascinating - a play that spans more than 300 years lurching into its final act - black comedy drenched in the blood of impending financial carnage. 



Colin Maxwell