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


Tony Alexander's Weekly Overview 18/1/13

First Weekly Overview for 2013

Welcome to the first BNZ Weekly Overview for 2013

But guess what? I’ll be on holiday next week so the next WO will appear on January 31. You’ll find the full WO issue attached to this email and at the following link.

In this week’s lead article I take a look at how the world is looking like a less dangerous place at the moment. But because money printing is playing a role in the rise in sentiment it would be wrong to conclude that there is a normal cyclical upturn underway. In fact as this year progresses talk will increasingly turn to how to withdraw the huge monetary injections undertaken by central banks. But for now a positive ball is rolling in some parts of the world – which brings one to New Zealand’s rolling investment ball – housing.

Average NZ house prices rose 6.7% last year with Auckland prices ahead 8.6%. In late-2008 I noted that supply issues and plummeting interest rates would limit NZ house price falls to 10% - 15%. They fell 11%. I then went on to note that awareness of the shortage would eventually rise and the buyers would come out to find an absence of listings. That happened exactly a year ago. Now we move to the next stage where investors are worried they may miss out on easy profit so will be scrambling to buy what they can. The result will be that this year prices are likely to rise by more than they did over 2012 and the Auckland rise will spread to other centres.

In the Interest Rates section we note that although a monetary policy tightening in NZ still looks unlikely until early next year, there is upward pressure developing on fixed interest rates which is worth watching – even though there is nothing to suggest that predictability of interest rates is any better now that at any stage over the past four years. So I repeat my three year comment – you are a fool if you base your interest rate risk management decisions on a particular set of interest rate forecasts.

On the economic data front in the past five weeks we have learnt that migration net outflows are easing (watch for what the turning to positive annual flows will do to the housing market), that retail spending growth was only mild in the December quarter with Christmas frankly mediocre, and the economy grew only 0.2% in the September quarter but 2.5% for the year.

All the best for 2013
2013 areas of interest = China, NZ business culture, expat connectivity. Contact me if willing to network on any of these things.

Tony Alexander
Chief Economist


© Scoop Media

Business Headlines | Sci-Tech Headlines


Internet: NZ Govt Lifts Target Speeds For Rural Broadband

The government has lifted its expectations on faster broadband speeds for rural New Zealand as it targets increased spending on research and development in the country's information and communications technology sector, which it sees as a key driver for export growth. More>>


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Scouring: Cavalier Merger Would Extract 'Monopoly Rents' - Godfrey Hirst

A merger of Cavalier Wool Holdings and New Zealand Wool Services International's two wool scouring operations would create a monopoly, says carpet maker Godfrey Hirst. The Commerce Commission on Friday released its second draft determination on the merger, maintaining its view that the public benefits would outweigh the loss of competition. More>>


Scoop Review Of Books: She Means Business

As Foreman says in her conclusion, this is a business book. It opens with a brief biographical section followed by a collection of interesting tips for entrepreneurs... More>>


Hourly Wage Gap Grows: Gender Pay Gap Still Fixed At Fourteen Percent

“The totally unchanged pay gap is a slap in the face for women, families and the economy,” says Coalition spokesperson, Angela McLeod. Even worse, Māori and Pacific women face an outrageous pay gap of 28% and 33% when compared with the pay packets of Pākehā men. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news