Instability and Opportunity

By Matt Ball – PR & Advocacy Manager

Over the weekend news broke that the US has bombed Iran. No one knows where this will end up, but it doesn’t seem likely to make the world more stable and predictable. Let’s hope those in charge step back from the brink. 

If not, then we may see an escalating set of responses. While some will be contained within the Middle East, others could have wide-ranging impacts. Houthi attacks on shipping through the Red Sea would disrupt global supply chains and if Iran closed the Straits of Hormuz, fuel prices will skyrocket. 

If you want to have a look at how some analysts are viewing the situation, read this report from Reuters released shortly after the attack. 

What does this mean for property investors here in New Zealand? Surely, it’s nothing to do with us? Well, the war might be a long way away, but we’re not immune from the economic fallout. We live in an interconnected, interdependent world; supply chain shocks and oil price rises will ripple through all economies. The level of uncertainty just increased. 

New Zealand’s economy does seem to be recovering thanks in large part to the strength of the rural sector, but it’s not exactly booming. The last thing we need is more geopolitical uncertainty or an economic shock. That’s all I’ll say on this for now, it’s really a case of wait and see, but it’s never a bad strategy to prepare for the worst and hope for the best.
 

Bishop’s move

Chris Bishop made what I think is a very interesting move last week to give himself as RMA minister the power to overrule local council planning decisions. Clearly frustrated at the stories he’s getting in his inbox and some council planning decisions including this one in Auckland, he has taken decisive action. It shows his determination to make it easier to build more houses in New Zealand, and good luck to him. 

The law change is expected to be made in about two weeks and will only be temporary until the RMA changes come into effect, which the Government hopes will be in 2027.
 

Tony Alexander’s mortgage broker survey

Normally I find something insightful in Tony Alexander’s surveys, but what’s interesting about his latest mortgage broker survey is that it doesn’t really tell us much. There’s a slight increase in the level of investor interest being reported, but when you look back at past years it’s clear that the optimism of 2024 – such as it was – has well and truly dissipated. Other than that, mostly flat.
 

Politics – Labour now more trusted than National on key issues

Last week Ipsos released its quarterly issues monitor, which looks at the issues most concerning Kiwis and who they trust – politically – to deal with them. It’s a good survey by a solid organisation. Radio NZ reported the key finding, which is that Labour is now perceived as the political party most capable of handling three of the top five issues – inflation / cost of living, healthcare, and housing, while National is seen to be most capable of managing the economy and crime. 

‘Housing / price of housing’ and ‘crime / law and order’ are fourth equal on the list of concerns at 25%, however, they continue their downward trend, with housing / price of housing reaching its lowest levels since reporting began in July 2018. It’s worth noting that for most of the first three and a half years of this survey housing was the number one issue. 

This does contrast with the survey I highlighted last week, in which housing wasn’t even in the top 10, but that’s the nature of surveys. They use different methodologies, so you can’t really compare them directly. However, the trend is important, and it’s good to see housing falling as a concern in both the Ipsos survey this week, and the Taxpayer Union/Curia poll the week before. 

The Ipsos survey revealed an interesting generational divide. Kiwis aged 18-34 rated housing / price of housing as their second highest concern, at 35%, Kiwis aged 35-49 put it fifth, and it didn’t even make the top five for older generations. This is a key driver behind some of the emigration numbers we’ve been seeing of late and is a concern for New Zealand’s long-term success. Given the recent increase in activity by first home buyers and the overall drop in rents, it will be interesting to see if this starts to drop off as a concern for this age group in the next survey.
 

Spreading the word

As I mentioned last week, I’ve been getting out and about trying to raise awareness of the work the Federation and Associations do and the issues that matter to property investors. Last week I shared Sarina Gibbon from APIA’s appearance on The Alternative Property Management Show, so this week here’s a link to mine. It was a wide-ranging discussion on politics, property manager regulation and more. Please have a listen and let me know what you think. Also available on Spotify here.