Last night Kea and I were looking at planning our next project. She noted that friends who had very nice houses and were holding out for high prices — and this is a situation where last time the median house price has increased by 20% post covid — are finding their houses are staying on the market for a long time.
She is getting tradesmen in for work. She was told last year that there was an eight month waiting list to get some jobs done, but this has now dropped to four months. Her conclusion: people are running out of money. They have spent whatever money they saved by not being able to travel, or they have lost income.
I know that New Zealand is less dependent our tourism export industries than Australia, but we are seeing redundancies.
Three universities are signalling likely voluntary redundancies next year if New Zealand’s border remains closed to foreign students.
None have put any numbers on required staff losses yet, but two are looking to save tens of millions of dollars a year. Based on typical academic salaries of about $100,000 a year, that means several hundred jobs may go.
Overseas students paid the country’s eight universities $503 million in fees in 2018, making up 13 per cent of the universities’ total revenue.
However, the cuts proposed at Auckland and Victoria Universities amount to only 4 to 5 per cent of their 2018 revenue, suggesting that up to 1000 of the university sector’s 22,000 jobs could be at risk.
The number of overseas students is considerable, and the numbers that will be let in this year is not great. We live in a university town, and if the university suffers, all suffer.
So we are hunkering down. We are ensuring we are not leveraged. At all. The less we have to do with the banks, the better. I see people cutting expenses, and learning to do without pre assembled meals, just as My Food Bag has an IPO. The market is frothy.
The question is should one cash out. Nikolai says that the last time he did this with the stock market he lost out. Health and woke virtue signalling allowing, I hope to work for another decade or so, which means that a sharp crash will help my Superannuation scheme as I contribute regularly.
But if trading non fungible assets, either take the price you can get now or hold them. Your collectable car, your stamps, your art, even your gold, silver and bitcoin may not be worth much if no one else can buy them.
Your home is a non fungible asset. Some our friends already have to cut their house prices, or be trapped.