There’s a lot of people around who pig-headedly refuse to admit that the horse has bolted and New Zealand is in an extremely weak position with our housing market exposed and at the mercy of global forces. If the US economy keeps expanding while ours is contracting, its game over here. And some people want to continue to kid themselves that there is a big tax windfall there for the taking.
Here’s an article from the NZ Herald today explaining why New Zealand is now in a similar position to where the US was in 2008 -
https://www.nzherald.co.nz/business/...DENLY53DTNHCE/
‘The big difference for New Zealand versus the United States though is our housing market, Gardyne said, with our market now reflecting what the US went through during the 2008 global financial crisis.
“So back then everyone got loaded up on too much household debt. They generally had really short-term mortgage rates and they went through this period where their mortgage payments went up. A lot of people did get into financial strife and there was a real period of austerity for a few years as people tried to pay down their debt and, and the economy healed.
“We are starting to see that in New Zealand at the moment, and again, over a number of years, our house prices got extended, consumers put more and more money into housing, have borrowed more money, and now with mortgage rates going up, it is starting to have an impact on spending.”’