The housing market is once again in the driver's seat for the economy, but it's not heading in the direction we're used to.
Yes, a recovery is underway.
But the brutal truth of 2025 was summed up rather well, I thought, by Sir Bill English in an interview about the current state of play.
Basically, this protracted downturn - which for anyone living outside Queenstown or living on dairy farm has felt as drawn out and depressing as a Covid lockdown - has been made worse by the housing market.
It's not firing back into life like it usually would at this stage of the cycle.
The wealth effect hasn't kicked in. The recovery's taken longer.
In the long run, English argues, this is a good thing. Because supply has been coming on, planning laws are being changed, intensification will keep prices low or in some cases, see them fall.
Does this make it any easier to stomach? No? Is he right? Probably.
If it's happening, this structural shift is going to create headaches for anyone relying on property to boom in order to get rich.
Like. um I don't know, Hipkins and Labour.
They were out at the weekend, making in rain cash, this time on GP clinics who apparently get bank loans to start practices which are effectively licenses to print money.
Like the free GP visits for billionaires and the rest of us, the policy relies on revenue from a capital gains tax.
What if those gains don't happen, or the happen but not to the extent they assume they will?
What if the gains look more of the sort we've seen over the past few years i.e. nil or losses?
Then what? What's that old saying about your mouth writing cheques your ass can't cash?
Without those golden-year capital increases, it won't just be the economy feeling their loss, but politicians with big spending agendas also.
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Episode Transcript
Congratulations, we've made it to summer. We've made it to
the end of the year. Well almost there, almost there.
It is the first of December, and the housing market
is once again in the driver's seat for the economy,
but not heading in the direction that we're used to,
is it. Yes, the recovery is underway, but the brutal
truth of twenty twenty five I think was summed up
rather well by Sir Bill English in an interview about
(00:21):
the current state of play. Basically, this protracted downturn, which
for anyone living outside Queenstown or living on a dairy
farm has felt about as drawn out and depressing as
a COVID lockdown, has been made worse by the housing market,
not better. It's not firing back into life like it
usually would at the stage of the cycle. The wealth
(00:42):
effect hasn't kicked in. The recovery is taking longer. In
the long run. English argues this is a good thing
because supply has been coming on, Planning laws are being changed.
You know, we've got intensification coming for the big cities.
This should keep prices low or in some cases see
them full. Does that make it any easier to stomach? No?
(01:03):
Is he right. Probably, if it's happening, this structural shift
is going to create headaches for anyone relying on property
and a boom in property in order to get rich.
Like hmm, I don't know who's relying on property, who's
relying on capital gains for money for revenue? Well, hipkins
(01:24):
and labor. Of course, they were out at the weekend
making it rain with cash, this time on GP clinics
who apparently can't get bank loans to start practices which
are effectively licenses to print money, like the free GP
visits for billionaires and the rest of us. The policy
relies on revenue from a capital gains tax. What if
those gains don't happen, or they don't happen to the
(01:47):
extent that they assume that they will. What if the
gains look more of the sort that we've seen over
the last few years, i e. Nothing or losses than
what what's that old saying about your mouth writing check
that your ass can't cash. I think that comes into
play here. Without those Golden year capital gains increases, it
(02:08):
won't just be the economy feeling their loss, but politicians
with big spending agendas also For more from early edition
with Ryan Bridge. Listen live to News Talk Set B
from five am weekdays, or follow the podcast on iHeartRadio
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