Economic growth, inflation, and interest rates around the globe remain significantly lower than they were prior to the 2008 Global Financial Crisis. The limited success of efforts to stimulate the economy over the last 12 years are reminiscent of the Japanese economy’s stagnation during the 1990s. Are other developed economies, including New Zealand, at risk of suffering the same malaise as Japan over the medium-term?
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.
The latest Infometrics Quarterly Regional Economic Monitor points towards a slowing economy, even as growth remains broad-based across the country. Construction activity continues to grow at pace as New Zealand attempts to make up the shortfalls in housing, services, and infrastructure from rapid population growth over previous years.
The latest estimated resident population data for regions and districts published by Statistics New Zealand (Stats NZ) in late October threw up a few surprises, not least that Auckland’s population is a lot lower than previously estimated. Indeed, we have been overestimating population in many of our larger urban centres and underestimating it in the smaller provincial districts.
Every time we have local elections there is lots of talk about the low levels of turnout, and rightly so. In 2016, turnout was up nationally to an unimpressive 42%. The 2019 preliminary results from Local Government NZ show a drop in national turnout to 41.4%. At a slightly more detailed level, “metro” council areas followed a similar zigzag of up in 2016 and down in 2019. Interestingly “provincial” and “rural” council areas showed an inverse zigzag, with decreased turnout in 2016 and increased turnout in 2019.
With local elections in full swing, there’s a greater focus on the direction that our councils are moving towards and how much is it going to cost. Wrapped up in these discussions is the the fact that right across New Zealand we need to address our infrastructure deficit after decades of neglect. Planning to address this deficit will not be easy, or cheap, but is critical to aiding growth and fixing our housing issues.
On 23 September StatsNZ released the first batch of Census 2018 data, which includes high-level national trends, population counts for local areas, and the number of electorates. Although it is great to finally have some 2018 Census data, the information available is still very high level.
Local councils are once again putting their thoughts towards their Long Term (10-year) Plans which need to be completed next year. Fundamental to their plans are reliable metrics on the size of their current and future population.
We know that Auckland is a big part of the country’s economy. In 2018 it had 35% of the population, 36% of the jobs, and accounted for 38% of GDP – up from 31%, 32% and 34% respectively in 2000. But just how big is that really?