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  1. #1
    An Awesome Cool Cat winner69's Avatar
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    Default Auckland housing market

    I have a lot of time for Rodney Dickens and his views (not just because I tend to agree)

    How will NZX stand up in another recession?

    http://www.sra.co.nz/pdf/RecessionMay14.pdf

    Abstract
    This flaw and the way successive governors have gone about achieving the target of low inflation have made recessions by-products of monetary policy. This Raving explains the fundamental flaw with the inflation target and shows that Governor Wheeler plans to some extent to follow in the footsteps of his predecessors which means another recession is likely if not inevitable.
    Last edited by winner69; 08-06-2014 at 05:10 PM.

  2. #2
    The Wolf of Sharetrader
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    Of course Winner.

    The big question is when?

  3. #3
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    RBNZ governors use the rear wind mirror to set monetary policies.

    Enough said.

  4. #4
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    Quote Originally Posted by snapiti View Post
    I cant understand the latest increase's in the OCR inflation is well under control and has been for a long time.
    Doe's not effect me personally but it will put a damper on consumer spending.
    Its a matter of being ahead of the game to avoid unnecessary reactionary decisions that will inevitably lead to a recession.

    Better to 'smooth. things out and avoid shocks

    Non-tradable inflation already over 3% and heading higher

  5. #5
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    Quote Originally Posted by snapiti View Post
    I cant understand the latest increase's in the OCR inflation is well under control and has been for a long time.
    Doe's not effect me personally but it will put a damper on consumer spending.
    They are worried about housing and want to stop the bubble. They are going away from their inflation mandate and technically in breach of their mandate.

    The continual rise in interest rates will most likely cause big future problems for exporters via a high currency. Currently the US and japan are proactively devaluing their currencies to kick start their economies. NZ has decided to go with the high currecny option at the expense of exporters due to housing.

  6. #6
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    Quote Originally Posted by snapiti View Post
    thanks schrodinger I think your post is highly accurate.
    It is mainly housing in Auckland and Christ churh going up in value
    I know of three existing houses around my place that have sold to rich overseas people and have been rented back to to Kiwi people. May be do what they do in Australia , and make rich over seas people build new houses in Auckland, it might help the shortage and make it a bit easier for the Kiwi person to get into a home.

  7. #7
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    Unemployment is just as important as inflation when setting the OCR
    http://www.interest.co.nz/opinion/63...-activity-some

  8. #8
    An Awesome Cool Cat winner69's Avatar
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    RBNZ seem to be leaning towards not making as many OCR hikes as previously intimated

    And under pressure(?) changing tack on the LVR thing

    A few months ago they seemed to at least a plan - good.

    But now they seem to be indecisive and dare I say it getting into reactionary mode - not good

  9. #9
    An Awesome Cool Cat winner69's Avatar
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    Well if he set out to "cool" the housing market he done a fantastic job in completely stuffing it

    http://www.stuff.co.nz/life-style/ho...rtgage-braking

    Quote - The figures showed a deepening of the trend of weaker sales volumes

    And worse still

    The volume of sales has now moved back to 2012 levels, and was the seventh-lowest recorded by REINZ in 23 years.

  10. #10
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    I can explain it--Home owners(in Auckland at least) are realizing that it is just to dang expensive to sell and buy another house ,with real estate fees and moving costs etc.--Instead they are staying put and renovating.
    When I look around Auckland there are houses getting renovated everywhere.
    The numbers may have cooled but I have'nt seen a major drop in price to suggest they have stuffed the housing market.

  11. #11
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    Quote Originally Posted by moosie_900 View Post
    Sorry, it seems there was speculation within the mediaand I misread it as a certainty! Sorry all!
    Moosie - You don't seem to be the only one who 'misread' it


    http://www.interest.co.nz/opinion/69...restrictions-l

  12. #12
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    PPI (Producers Price Index) out yesterday

    From Stats NZ -

    Annual change
    In the March 2014 quarter, compared with the March 2013 quarter:
    The output PPI increased 4.0 percent.
    The input PPI increased 3.1 percent.


    CPI generally follows the PPI

    No further commenting

  13. #13
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    Looks like we will be OK ......64% of 118 who replied to the Expectations Survey
    http://www.rbnz.govt.nz/statistics/tables/m14/

    Extract -


    Both one and two-year-ahead expectations of annual Consumers Price Index (CPI) inflation are little moved since last quarter. The one-year series increased from 2.03 to 2.08 percent on a mean basis. The median is unchanged at 2.00 percent.

    Likewise, the two-year series barely moved this quarter, increasing from 2.33 percent to 2.36 percent. However, the median increased from 2.30 to 2.35 percent.

    Respondents are also asked what they believe quarterly CPI inflation will be for the current and next quarters. A quarterly percentage increase of 0.47 percent is expected for the June 2014 quarter (0.54 percent last survey), and 0.59 percent for the September 2014 quarter. These expected quarterly increases imply annual inflation rates of 1.9 and 1.5 percent for the years to June 2014 and September 2014 respectively.


    Also GDP expectations not that of a rock star economy, labour costs to go up, unemployment to fall, higher interest rates and a lower NZD. Can't be all that bad
    Last edited by winner69; 22-05-2014 at 05:35 PM.

  14. #14
    Senior Member warthog's Avatar
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    Quote Originally Posted by moosie_900 View Post
    I can't believe they U-turned on the LVR.
    Yeah so much for the RB's "It's been really effective," PR line.

    So somebody has been in the RB's ear and told Wheeler that the LVR speed limit is just hurting everywhere in NZ outside of the hot property markets.

    The UK is discussing LVR right now (or equivalents) and have already concluded it was a stupid idea as it made it very difficult indeed for people to get mortgages even outside London.
    warthog ... muddy and smelly

  15. #15
    Senior Member warthog's Avatar
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    Quote Originally Posted by turmeric View Post
    What data is this based on?
    Check the first paragraph of the PDF you linked.

    Also, if it is so effective, why is everybody, including the RB, signalling hikes in the OCR to cool the housing market?
    warthog ... muddy and smelly

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