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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.
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Of course Winner.
The big question is when?
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Originally Posted by snapiti
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
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Originally Posted by snapiti
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.
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Originally Posted by snapiti
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.
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Unemployment is just as important as inflation when setting the OCR
http://www.interest.co.nz/opinion/63...-activity-some
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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
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Originally Posted by turmeric
Back in the day when I was studying Economics inflation was their key concern primarily due to NZ high levels during the 80s. When this was brought under control they decided to recently add unemployment to their box of tricks. In reference to their breach mandate I was indicating that they are keeping an close eye on the housing market but use inflation as the excuse. Since housing makes up a component of inflation (25%?) and is rampant in Auckland etc there are indications that hikes in the OCR are driven by housing and nothing else. This being the case they have failed to build long term wealth in NZ by killing the export sector and domestic invesment. This is not only their fault as the governments inaction to have sensible housing policy for all NZ. This failure in policy makes the RBNZ task harder.
Not sure how they balance both long term and short term but raising the OCR to kill exporters and business which wont help the country in the long term. Also hearing about NZ's "Rock star economy" makes me smile. With growth around 2.5% it is equal to US/UK. Singapore has a Rock star economy but we just accept whatever is told to us.
In summary the recent hikes are about housing and nothing else. As I am aware it is Aucklands housing and not businesses that are the governments/RBNZ concern. We should be governed by smarter people and not muppets.
Last edited by Schrodinger; 09-06-2014 at 08:15 AM.
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Aussie GDP apparently 3.5%
Not too bad when stories say country in the ****
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Member
Originally Posted by nextbigthing
Of course Winner.
The big question is when?
Every 8 years
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