Posts by Katharine Moody
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Speaker: House prices and the "Magic Money", in reply to James Butler,
why would anyone who doesn’t want to live here want to invest in an asset whose value grows slower than wages?
To make use of it as a refuge in case of civil unrest in ones country-of-origin, or in case one falls foul of the authorities in ones country-of-origin.
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Speaker: House prices and the "Magic Money", in reply to David Hood,
Yes, that's how I interpreted it as well - and the RBNZ refuses to adequately explain the balance discrepancy (the post immediately above the previous one linked);
New Zealand's official overseas reserves are now at NZ$26.5 bln (including other FCY assets), the highest they have been since May 2012 when they reached $28.3 bln.
A fair chunk of this figure is tied up in the USD swap leg associated with RBNZ settlement cash creation and lending out hedged crown deposits. View D10, section 10 and R3, memorandum items.The unexplained balance discrepancy is a matter of ongoing fruitless investigation on my behalf.
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David, that response to my question put to Stephen Hulme was responded to on the other website thus:
the last graph in your linked article can be, more or less, reconciled by the RBNZ's estimate of foreign debt.
External Debt in New Zealand increased to 247182 NZD Million in the first quarter of 2015 from 243036 NZD Million in the fourth quarter of 2014. Read more
The correct assumption that this debt is cross currency basis swapped and thus designated off balance sheet and not included in the official RBNZ M growth series data releases is suspect in my view because the swapped NZD's should show up in official lending stats. But I don't hold out much chance of getting a coherent official response. I find it's commonly declared "commercially sensitive", hence inexplicable.
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Speaker: House prices and the "Magic Money", in reply to David Hood,
you can think of it as a case of “follow the money” where we can rule out the traditional suspects.
David, I've invited the chap who maintains this data analysis on RBNZ activity to have a look at this discussion;
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Polity: Too much to swallow on the TPP, in reply to Ian Dalziel,
How does he get by on so little information?
Feeding your own prejudice requires no information - just a mouth.
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Speaker: House prices and the "Magic Money", in reply to Glenn Pearce,
The REINZ sales graph and the QV values will always correlate because recent sales are used as input to calculate the QV’s.
They are but perhaps it also needs mentioning that a great deal of added internal borrowings are likely based on leveraging the capital arising from QV revaluations without any corresponding house sale.
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Speaker: House prices and the "Magic Money", in reply to David Hood,
IMO the whole LGA arguments people make involve a bit of cognitive dissonance
I agree - same as the RMA arguments.
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Thanks David for taking the time to put this together. I have always expected that FDI in our housing market was a problem, but never expected that if and when quantified it would be;
300 billion of the 800 billion in the past decade
That is just mind-blowing. So much so that I really do wonder whether an analysis which separates out what portion of that 300 billion could likely be due to a one immigrant household purchasing one residence using overseas sourced capital. Whatever then is left over of that 300 billion, would perhaps more accurately reflect the FDI (i.e., FDI not for the purposes of owner-occupier) in our housing market.
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Speaker: House prices and the "Magic Money", in reply to Greg Dawson,
I was think of the LGA (local government act) 2002., which free market types blame for red tape making house prices rise
The influence of LGA 2002 on house price rises relates to the provisions in that Act for Development Contributions as a means for local authorities to fund the cost of the growth component of infrastructure supply that comes with new development.
Each local authority sets the level of them themselves (Kapiti, for example, didn't actually introduce them until 2005/06).
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Hard News: Dirty Politics, in reply to Alfie,
Odd. I thought they polled a lot better than most people expected.
Not only was their polling unexpected to me, but truly frightening :-).