Not FOMO, FOOP

The local housing bubble is peaking. Prices are slowly sinking. Kea looked at the houses we did not buy and noted that the prices they went for are all over the place. The median house price for New Zealand as a total was 860K last month, and our wages have not gone up. But things are changing. This was on the national news yesterday.

I note that for many women nothing has changed. They want to be at home and looking after their kids. But this means, in the current environment, that you can’t overpay for your home, and your husband better have a good job, with secure income. Being a stay at home mother is now a luxury good and desireable. Via Nikolai, this.

According to a new partnered survey cosponsored by ForbesWoman and TheBump.com, a growing number of women see staying home to raise children (while a partner provides financial support) to be the ideal circumstances of motherhood. Forget the corporate climb; these young mothers have another definition of success: setting work aside to stay home with the kids.

So the local young people are getting cautious, in my view too late, because house prices have gone from crazy to unsustainable.

Remember FOMO? The ‘fear of missing out’ is a big deal in the world of house sales. But things have changed.
As a result of the Government’s housing policy, there’s growing uncertainty over prices, fuelling hesitancy with buyers fearful of paying too much for property. Hence, FOMO has now been replaced by FOOP – the fear of overpaying.
Price growth hit a record high in March, but experts say that was probably the “last hurrah”.
With the Government’s housing overhaul increasing hesitancy, everyone is unsure of where prices could go next.

I’ve got kids in their early 20s, and I’m telling them not to buy in the current market. Kea said we dodged massive bullets by taking a reasonable offer and trading down our house at the beginning of the year. Wages are not going up that much, but food prices are, looking at our shopping bill. The current travel restrictions have severely damaged the fruit industry, that employs seasonal workers from the Pacific Islands, which are COVID free. But they are not being allowed in.

The signs though are not good. Already the Government has responded that it is likely to raise the quota “slightly” but not to pre COVID levels. Given that 5,000 workers who had extended visas expire over the next 5 months, and the current batch of 2,000 workers return home at the end of their 7-month visas around August, leaving the growers with zero seasonal workers, a “slight increase” from 2,000 will be catastrophic.
The silver lining through this nightmarish experiment is that the government, in its inability to recruit sufficient locals to get off the couch and onto ladders in orchards, proves that the RSE scheme is indispensable, and every effort should be made to get the program up and running before next season starts. It cannot delay, and opening a quarantine-free bubble with COVID-free Pacific countries should be a priority. It is the kindest and fairest thing that Ardern could do to our growers and our great Pacific neighbours.

On other issues, the travel bubble is not the only barrier for people coming over and spending money. We are already in a severe recession, and the first thing you cut out is the holidays when making the budget work. So allowing Aussies to come over is not a magic bullet.

The CEO of Auckland Airport has revealed trans-Tasman bubble bookings have dried up as travellers remain wary of being caught up in new COVID-19 outbreaks.

Prime Minister Jacinda Ardern announced the long-awaited bubble earlier this month, which is set to commence on Monday, April 19.
Travellers from Australia will be able to bypass the two weeks in an MIQ facility, which is mandatory for all other international travellers, and won’t have to quarantine on the way back.
Accommodation Association CEO Julie White told The AM Show it was great to have the bubble open after a year of travel restrictions, but said many potential travellers are still wary about making the trip.
“When the announcement [came out], we had a rush of bookings into New Zealand. However, it dried up really quickly – within a week the bookings stopped. We are also hearing from both sides that flight schedules are starting to be reduced in May…
“Opening the border is excellent but it’s not going to be the silver bullet, so the Government still needs to manage the health crisis and economic crisis. We are already seeing upward prices from supply chains, so that’s an early indicator of inflationary pressures, so we need to keep an eye on the economy as well as get trying to get more Australians over to New Zealand.”

Down in the South Island we don’t wear masks, though our government is being overly influenced by their fellow Labourite Australian governors, who have worked out that lockdowns and mask mandates mean that people are quiet and they can ignore their humanity. It’s ironic that SImon Black finds Mexico is more human at the moment than Corporate America. I have no doubt that the current riots in Minnesota are in part distraction from bad economic management. It looks like we are heading into stagflation.

I still think increasing prices won’t keep business viable if no one can afford their goods. As I said last week, the inflation to watch is food inflation. You can keep your electronics going basically forever, and you don’t need that buy that new couch, vaccuum cleaner, or mountain bike.

Particulalry if you use a credit card. The interest rates on them is still in double digits, when you can barely get one percent in term deposits.

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Will S.
27 days ago

So, more opening up between the two antipodean anglospherean nations, but NZ is bent on alienating Aus by cozying up to China more, I hear.