December 2015 job figures paint an encouraging picture of the resilience of the New Zealand economy. But just a small dip in economic fortunes could see many more Kiwi families fall into poverty and severe social distress, says The Salvation Army in its latest State of the Nation report.
Now in its ninth year, the 2016 State of the Nation report—entitled ‘Moving Targets’—examines a range of indicators to highlight good and bad aspects of the nation’s social and economic conditions. To read a summary of the report go here
In the report the section on housing says rising house prices are a godsend for owner-occupiers and investors, but most likely bad news for tenants and young families aspiring to home ownership. The hidden side to this house price bonanza is increasing household debt, which has now almost reached a level last seen just before the global financial crisis (GFC) in 2008. Despite polite warnings from the Reserve Bank, most New Zealanders appear indifferent to the emerging housing bubble in Auckland. Government’s policy responses have been unconvincing as it continues to rely largely on deregulation as a way of driving a supply-side solution. Although new house building is climbing back to adequate levels in Auckland, the background of migration flows into and around New Zealand are not being considered that closely, thus the demand side is being ignored. The consequence for Auckland is more of the same, with a growing shortage of affordable housing, house prices at previously unseen levels, and rents rising much faster than wages and salaries.Auckland’s housing shortage appears to be spreading to other places, such as Waikato and Wellington, although the pressure on Christchurch is waning as the re-build replaces housing stock destroyed by the 2011 earthquakes. To read the full report go here.