house prices

Labour came to the only logical conclusion, with a little help from its friends. A Capital Gains Tax was little more than scratching an itch of its voting base, but would have done little for the country and the government

The decision of the Labour-led government to back away from a capital gains tax was a good move in a number of ways.

Following up my ‘AUT Policy Observatory’ report on ‘Housing Prices Relative to Consumer Prices: An Analysis’.

Last week the Reserve Bank reported stress tests to assess the ability of borrowers to cope with higher mortgage interest rates. Assuming 7 percent p.a.

What are the possibilities for the future housing prices? What can we do?

Two eminent but retired Reserve Bankers, Don Brash and Arthur Grimes, have argued that house prices should halve. I am not sure whether they actually mean it or are just vividly pointing out that house prices are about double the sustainable level. I probably use a different method of calculation but have come to a similar assessment.

If Steven Joyce is right that David Parker told ‘nine lies’ about the economy on The Nation last weekend, then he must believe the economy is already in full boom; growth has peaked and needs to be slowed; exporters are whingers; the hot New Zealand dollar is nothing to worry about; that not selling enough products to the world to pay for all the things we buy from other countries isn’t a problem - hell, we’ve been doing it for forty years - let’s do it for another forty!

And there is no housing bubble in Auckland - David Parker made it up. 

Let’s go through Steven Joyce’s nine responses to David Parker: 

David Parker interview on The Nation – April 26 2014

1. “Export prices are going down” (David Parker)

With houses prices hitting new highs in our main cities, is the sense of economic gloom finally lifting from New Zealand? And what implications might that have for MPs?

It's been coming for a while, but QV has now confirmed that our love affair with bricks and mortar is back at record levels.