Gareth Kiernan starts the year by looking at what we can expect of the New Zealand economy, and life in general, in 2021.
The Reserve Bank’s independence is an important feature of New Zealand’s economic framework. The government has some scope to include housing in the Bank’s policy objectives, and it must also ensure that the Bank takes an appropriately broad view of the economic effects of its policy decisions. But housing’s underlying problems will only be solved by more fundamental reforms of our tax system and settings around the supply of land.
The need to understand our changing population has been more important than ever, as an unexpected wave of migration rendered previous projections obsolete. This article explores how this migration wave changed our population, and our view of the future.
Residential construction activity has held up much better than expected since the economy went into lockdown in late March. Some areas have seen a strong burst of activity, but others have seen a softening in anticipated building levels. This article explores some of the emerging regional trends in consent numbers, with detailed regional forecasts of activity available as part of our Regional Construction Outlook.
Housing remains a hot issue across New Zealand. But there’s not as much focus on the quality of the housing we endlessly debate. In part, this lack of focus is because we haven’t had great insights to work with – and what gets measured gets managed. But Infometrics analysis of Census 2018 data shows some disturbing results, with a concerning number of mouldy, damp or cold houses.
It’s abundantly clear that the COVID-19 pandemic and economic downturn isn’t hitting all groups equally, with job losses more concentrated among groups like Māori, young people, and women. Infometrics analysis has also determined that many who are facing job losses are likely to be renters.
The government has a clear opportunity to address New Zealand’s shortage of social housing and support the residential construction industry by significantly increasing construction of state houses over the next two years, says economics consultancy Infometrics.
A commitment from the government to build an additional 9,400 state houses over the next two years would mitigate the construction sector’s downturn, helping to prevent a repeat of the massive loss of capacity that occurred following the Global Financial Crisis. It is also an opportunity for the government to make a real difference in housing outcomes for some of society’s most vulnerable people, contributing to better wellbeing in a way that KiwiBuild was never going to do.
Housing looks set to continue dominating headlines in 2020, as house prices look to rally again and rent pressures grow. Who’s got property, who’s paying for property, and how many need property will all be key issues through the year as we build towards another election. But separate from that, the spotlight will keep shining on the housing market as New Zealand’s primary method of wealth creation. With so much money and interest wrapped up in property, here are some of the components to watch in 2020.