The pressure on election promises continues with Kiwi consumers still in the doldrums, but the housing market now on the mend. 1News Business Correspondent Katie Bradford sets the scene for the economy this week.
Good vibes in the housing market
Eager eyes are once again on the housing market, with both anecdotal data and property surveys showing the market is about to bounce back.
Agents tell me open homes are booming, there’s competition once again at auctions and as the sun comes out, so do the good vibes. A good sign of where the housing market is at is the monthly Reserve Bank mortgage data. It paints a picture of who is borrowing money – first-home buyers, investors or owner occupiers.
In July, there was close to $5 billion in new lending, but a falling number of first-home buyers. It also breaks down the lending by type, including loan-to-value ratios.
Brad Olsen says their analysis shows young first-home buyers are going to be burdened with debt. (Source: Breakfast)
It’s probably too early to see much of a jump, but worth keeping an eye on those investor numbers in the coming months.
Business, consumer confidence: How are we feeling?
ANZ's business and consumer surveys are out on Thursday and Friday. So how are businesses and consumers feeling?
The answer is a mixed bag. Last week GDPs data showed the economy has grown at slightly faster than snails’ pace, with a 0.9% rise in the last quarter.
1News’ Katie Bradford explains what’s behind the 1.7% growth in the June quarter. (Source: 1News)
That will give people a bit more confidence, but according to the Westpac McDermott Miller Consumer Confidence Survey out on Friday, consumer sentiment is in the doldrums. ANZ's survey out on Friday is likely to mirror that. The cost-of-living squeeze is still on and people continue to be desperately worried about interest rates and inflation.
Business confidence on Thursday might be a slightly different story.
It’s been gradually creeping up in the past few months. We saw that whopper profit from Fonterra on Thursday, which will provide confidence to many, despite it coming with a caveat that there are further dark clouds on the horizon.
Conditions are mixed across sectors, as the GDP data laid bare.
Retail spending remains down, and construction and primary industries are struggling, but others such as IT services and manufacturing are picking up.
It’s clear many business leaders are picking a National-led government and that’s likely to contribute to a lift in business sentiment.
How will the politicians pay for their promises?
National is expected to release its updated costings plan this week — having been asked about it daily for weeks now. By the time voters actually see those details, it’ll be less than three weeks out from the election and days from the start of early voting.
There are still questions swirling around National’s tax plan and housing policies, but the heat has largely gone off them. For now.
And that’s why National will have been going through its plan with a fine-toothed comb, knowing Labour and others are waiting to pounce on the tiniest of perceived mistakes.
PREFU changed the spending and revenue outlook for all parties. Labour too will be expected to release a mini costings plan of its own — again sometime this week.
For both parties, keep an eye out for any changes to how election sweeteners will be paid for, delays to start dates or time frames, or quiet cancellations of parts of projects.
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