Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


English says house price rise unsurprising

English says house price rise unsurprising

By Pattrick Smellie

Nov 14 (BusinessDesk) - Household incomes have increased by a third in the last four years, while average house prices have risen nationally by only 1.3 percent in the same period, making recent real estate market buoyancy unsurprising, says Finance Minister Bill English.

Appearing before Parliament's finance and expenditure select committee this morning, English appeared to have prepared the figures in advance for questions on the apparent heat in the Auckland housing market, which has seen average house prices rise above the levels at the time of the global financial crisis in 2008.

"House prices on average have moved up one percent in nominal terms. Disposable income is up a lot over that period," he said. "We wouldn't be surprised to see a bit more interest going back into the housing market", especially with the lowest interest rates in 40 years.

English tried to bat away Opposition politicians who pressed him on forecasts from the Treasury, Reserve Bank of New Zealand and the International Monetary Fund of an unsustainably high current account deficit with the rest of the world over coming years.

He cited the Christchurch earthquake as adding around one percentage point to the forecasts, while expressing a personal opinion that the outlook for New Zealand was better than forecasters believe.

"I'm just a bit more optimistic," he said, since he doubted New Zealand would return to historic levels of debt accumulation. "The fact is we are in a world that's pretty different because everyone's reducing debt."

Households were saving more, which forecasters had originally doubted would happen, and New Zealand corporate balance sheets were stable. While public debt was growing in part because of borrowing to cover quake rebuild costs and to lean against the impact of the global recession, the government remained committed to a Budget surplus by in the 2014/15 financial year.

If the current account deficit persisted at very high levels, New Zealand would also suffer a "textbook" sharp correction, with a much lower exchange rate among the outcomes.

Green Party leader Russel Norman challenged English on this, asking why the government didn't seek to manage the current account deficit down rather than wait for global financial markets to "punish" New Zealand.

English said he was "unpersuaded" by the range of alternative policy options being put up by Opposition parties, saying all had been debated over the last 30 years and there was no substitute for continuing with economic reforms in areas such as land and water use, and the Resource Management Act, to foster faster economic growth.

"If we thought we could manage it, we would go and manage the damn thing," he said. The high New Zealand dollar was a "signal from the world" that New Zealand had "sound prospects of producing stable yields compared to other countries."

"Our problem is one of success."

The New Zealand economy would remain "patchy" and unpredictable. Growth in the first half of this year had been stronger than forecast, while the second half was turning out to be weaker than anticipated.

"We think doing 2 to 3 percent annual growth we will continue to get job growth and continue to get household incomes into reasonable shape," English said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Crown Accounts: NZ Government Deficit Smaller Than Expected In First Half

The New Zealand government's operating deficit was smaller than expected in the first six months of the financial year, as the consumption and corporate tax take rose ahead of forecast in December, having lagged estimates in previous months. More>>

ALSO:

Fruit & Veg Crackdown: Auckland Fruit Fly Find Under Investigation

The Ministry for Primary Industries (MPI) is investigating a find of a single male Queensland fruit fly in a surveillance trap in the Auckland suburb of Grey Lynn... MPI has placed legal controls on the movement of fruit and some vegetables outside of a defined circular area which extends 1.5km from where the fly was trapped in Grey Lynn. More>>

ALSO:

Scoop Business: Westpac NZ Reaches $2.97M Swaps Settlement

Westpac Banking Corp’s New Zealand unit has agreed to pay $2.97 million in a settlement with the Commerce Commission over the way the bank sold interest rate swaps to farmers between 2005 and 2012. More>>

ALSO:

Going Dutch: Fonterra Kicks Off $144M Partnership With Dutch Cheese Maker

Fonterra Co-operative Group, the world’s largest dairy exporter, has commissioned a new dairy ingredients plant in Heerenveen, in the north of the Netherlands, its first wholly-owned and operated ingredients plant in Europe. More>>

ALSO:

Scoop Business: NZ Retail Sales Beat Estimates

New Zealand retail sales rose more than expected in the fourth quarter, led by vehicle-related transactions, food and beverages, adding to evidence that cheap credit and a growing jobs market are encouraging consumers to spend. More>>

ALSO:

Delivery Cuts Go Ahead: 'Government Money Grab' From NZ Post

"It's a money grab by the Government as the shareholder of New Zealand Post" says Postal Workers Union advocate Graeme Clarke about the changes announced by NZ Post. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news