The long-awaited reset of KiwiBuild confirms that the government still doesn’t grasp why the policy went so spectacularly wrong. When KiwiBuild was conceived back in 2012, it was easy to blame the unaffordability of housing on a lack of supply – new dwelling consents the previous year had plunged to a 58-year low of 13,236. But with consents now at a 45-year high of 35,472, it no longer makes sense to suggest that high house prices are due to a lack of construction activity. KiwiBuild remains a policy that has been formulated to treat the symptoms of a problem that the government has failed to properly diagnose or understand.
The July 2019 Infometrics forecasts show a long, slow, slowdown is on the cards for the New Zealand economy. With lower growth on the way, it’s worth highlighting some of the options that are available to New Zealand to combat the slowdown along with the opportunities and challenges of these options.
Today’s Wellbeing Budget is a significant departure from previous budgets. Finance Minister Grant Robertson has laid out an ambitious spending plan for the economy based around the government’s five wellbeing priorities. The test will be how achievable this plan is.
New Zealand’s labour market remains tight, with unemployment at 4.2% and businesses finding it difficult to source workers. At the same time, employment growth has slowed, and the Reserve Bank has stated that, in its view, “employment is near its maximum sustainable level”.
Since the Reserve Bank surprised markets with its shift towards an easing bias, the outlook for interest rates has been a constant source of speculation. But the timing of the shift in stance was curious – in our view, nothing fundamental had changed, and the Reserve Bank is sending out the entire fire brigade to rescue a kitten from a tree.
The first ever Micromobility Conference was held in California last month. This article looks at what micromobility is, how it is disrupting the travel sector, why it is happening now, and whether it will ever become an alternative to the car.
Despite various opinion pieces recently, the New Zealand property market is not heading for a crash. Given the sheer inertia of demand pressures in Auckland, we also think chances of a substantial correction are slim. This article lays out an answer to the question asked by Slade Robertson’s opinion piece in the NZ Herald this morning: are we heading for a crash or correction?
Consolidation in New Zealand’s residential construction industry has resumed since 2011 as building activity has recovered from the Global Financial Crisis. In 2017, the 100 largest firms made up almost 40% of consents, although that figure slipped to 37% in the March 2018 year. We had expected this trend of consolidation to take place, but it contrasts with a declining market share for the top 100 firms in Australia. Does this apparent fragmentation of the market in Australia foreshadow a similar change for New Zealand?
In light of National Drive Electric Week happening this month we thought we’d talk about how businesses can access funding for their electric vehicle ventures.
The August Monetary Policy Statement was the most influential yet under new Governor Adrian Orr, even though there was no change to the official cash rate (OCR). Mr Orr pushed out expectations for a rates hike until 2020, sending the New Zealand dollar sharply lower.
But it was the Governor’s assertion that rates could and would move lower, if weak indicators persist, that is both his biggest warning and most questionable stance.