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Thread: NZ Economy?

  1. #1
    ExPat is offline Member
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    Default NZ Economy?

    Is the New Zealand meltdown accelerating now? Any local Kiwi's that can provide information on:

    1. Real Estate prices (are they finally dropping?)
    2. Job Market (are companies hiring?)
    3. Goods and Services (are goods still coming into NZ at steady pace?)

    I would hate to see New Zealand turn into Iceland....

    Expat

    Global financial crisis still affecting NZ, says RBNZ


    "Despite the recent pick-up in world equity markets, New Zealand continues to be
    impacted by the global financial crisis," Deputy Governor, Grant Spencer, said today
    when releasing the Reserve Bank's May 2009 Financial Stability Report.

    "Major government interventions have eased stresses in the international credit
    markets, but the adverse second-round effects of the financial crisis on global
    economic activity and commodity prices will take some time to play out," he said.

    "These global pressures are encouraging a recovery in household savings which should
    contribute to an improvement in New Zealand's external balance over the next few
    years. Recent monetary and fiscal policy measures will help to ensure that the
    adjustment to more sustainable debt levels is an orderly one.

    "The banking system has continued to lend to households and businesses over the past
    year, but credit growth has slowed in recent months, lending criteria have tightened
    and some businesses are reporting difficulties in obtaining credit.
    While current
    conditions warrant caution, it is important that the banks continue to lend to
    creditworthy borrowers."

    Mr Spencer said New Zealand has been fortunate that its banking system has not
    experienced the distress seen in some countries. However, while the overall asset
    quality of the banks remains strong, impaired assets have increased sharply since
    late last year.


    "Provisioning is expected to rise further over the year ahead as business profits
    weaken and unemployment rises. Banks must ensure that they make adequate provisions
    and maintain capital levels sufficient to absorb further unexpected losses."

    As discussed in earlier Financial Stability Reports, New Zealand banks remain
    vulnerable to external financial shocks as a result of their dependence on offshore
    borrowing.
    Conditions in the funding markets had improved since late 2008 and one
    bank had issued offshore term debt using the Government's wholesale guarantee. Mr
    Spencer said banks need to lengthen the maturity structure of their funding to
    reduce their vulnerability to offshore market disruptions. The Reserve Bank's new
    prudential liquidity policy, to be released around the end of May, will help to
    reinforce this objective.

    Lending by the non-bank sector is continuing to contract, despite the easing of
    liquidity pressures as a result of the Government's Deposit Guarantee Scheme. Asset
    quality has continued to deteriorate as a result of the economic downturn and the
    weak property market in particular. In the medium term, higher standards across the
    non-bank sector are likely to be reinforced by the new prudential regime, which the
    Reserve Bank is currently implementing.

    Assessing and countering potential threats to financial stability in New Zealand
    will remain a high priority for the Reserve Bank while the effects of the global
    crisis persist, Mr Spencer said.
    Last edited by ExPat; 14-05-2009 at 02:40 AM.

  2. #2
    World First is offline Junior Member
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    Hi there... According to Quotable Valuation (QV) statistics out last month the median sale price of houses here is down 9.3% decline in residential property prices across New Zealand (March 08 - March 09). These median prices have risen slightly in the last two months which could point to price stability arriving in the near future. Some economists were tipping a 30% slump in this asset class, but it seems to have weathered the storm so far.

    Regarding the job market, there is still a shortage of teaching and medical staff and IT professionals are still sought after. There are quite a few civil service jobs being cut, this is not due to the economic down turn, this was expected after the change of government as the new National government wanted to rationalise the bloated bureaucratic beast that 9 years of Labour government had propagated.

    Goods and services - New Zealand posted a $324 million trade surplus last month, the largest surplus for a March month in dollar terms since 2002. Statistics New Zealand (SNZ) said exports for the month were up 17.7 per cent from a year earlier to $4.04 billion - the first time exports topped $4 billion in a March month. More here: Trade stats come in better than expected - highest surplus since 2002 - Business - NZ Herald News

    The Icelandic government and banking system had all its eggs in one financial basket - mainly dodgy MBS / CDO investments in the US. Since it was not in the European single currency it has suffered significantly. Iceland’s failed financials systems debts exceeds its it GDP by six times, it is very unlikely that NZ would go down the same path.
    While the banks here have made provisions for write downs it is nowhere near as bad as Iceland or Ireland... This crisis is scrapping the bottom now where it will reside for a while and after that there is only one way... and that’s up, and at the speed of change in the world these days it will be probably be forgotten about after 18 months.

  3. #3
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    duane1x is offline Member
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    Quote Originally Posted by ExPat View Post
    I would hate to see New Zealand turn into Iceland....

    Expat
    Actually, you have a long history of posting that you desire just that, so that you can "swoop in" and buy a property. And yet it is the USA that is looking a lot more like Iceland than NZ.

    World First:
    and at the speed of change in the world these days it will be probably be forgotten about after 18 months.
    1st: You are a lot more optimistic than I.

  4. #4
    ExPat is offline Member
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    Quote Originally Posted by duane1x View Post
    Actually, you have a long history of posting that you desire just that, so that you can "swoop in" and buy a property. And yet it is the USA that is looking a lot more like Iceland than NZ.
    The USA won't ever turn into Iceland. For one, the US has a ton of food producing capability as well as manufacturing capability. The fact that many US corp. have chosen to offshore to China or India doesn't mean the capability isn't there. Secondly, there are tons of natural resources in the US: Timber (Pacific NW), coal, natural gas, oil (Alaska), Uranium, Copper, etc.

    Iceland and NZ import a great deal of food and resources from places like the USA. The US can sustain itself but NZ and Iceland cannot without vast importation. It's a sad fact of life....

  5. #5
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    hatter5 is offline Senior Member
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    Quote Originally Posted by ExPat View Post
    Iceland and NZ import a great deal of food and resources from places like the USA.The US can sustain itself but NZ and Iceland cannot without vast importation. It's a sad fact of life....
    God bless Amer.... China for our imports.

    As being part of the Global economy, much is also exported; isn't this true about all developed nations including the old Colonies.

    ExPat,

    What are your future plans? Do you plan on ever living here despite it's unstable banking system (Have any NZ or Aussie Banks gone bust yet), over priced housing (presumably unique only to NZ?), rising unemployment and populated by racisits.

    I left just such a percieved place, Great Britain, 3 years ago and despite the problems NZ faces I'm here to stay.

    Take the plunge it might be much worse than you think.

    I'm hoping ,that as duane states, 'swooping in" isn't your only motivation.

    Some of your previous posts have been very informative so a positive spin would be good once in a while.

  6. #6
    ExPat is offline Member
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    Quote Originally Posted by hatter5 View Post
    God bless Amer.... China for our imports.

    As being part of the Global economy, much is also exported; isn't this true about all developed nations including the old Colonies.

    ExPat,

    What are your future plans? Do you plan on ever living here despite it's unstable banking system (Have any NZ or Aussie Banks gone bust yet), over priced housing (presumably unique only to NZ?), rising unemployment and populated by racisits.
    There have been a few posts about NZ having just as many racists as any other nation and that makes sense. I don't think there is anywhere on earth where there is pure uniformity and egalitarianism.

    As for my plans, I'm just not sure anymore. Iceland is in a real pinch and the same could happen to NZ if things get too out of hand. I read those recent posts about requiring pregnant women to leave NZ because of shortage of medical care. Shortage of medical care for pregnant women? This from a country trying to encourage immigration into the country?

    I get the sinking feeling that NZ is slipping into the unsustainable abyss. Rest assured, many American practices are also unsustainable in the long run as well but it all boils down to a basic question:

    Is my quality of life better in NZ or in the US? I'm still trying to figure that out....

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