The madness continues as there are no signs of economic improvement on the horizon. Now many of you will read this sentence and immediately say “he doesn’t know what he’s talking about”, because the share market is heading north like there’s an endless supply of rocket fuel and the housing market too is showing no imminent signs of slowing down. That’s all doom and gloom… we’re going well. Recovery is happening.
For weeks we have been looking at the state of the housing market in the aftermath of Covid-19. So far, the data does not suggest a complete wipe-out, however, cracks are now getting wider. Take a look. This tool is only for the New Zealand market at this stage. Data provided by the New Zealand … Read more Covid19 Housing Market Impact – Interactive Map
Price is simply a function of what someone is willing to pay for goods and services. It is subjective and hardly ever a good indicator of true value. True value is a function of strong fundamentals. In times of a crisis, it is very natural for decision making to be driven by price instead of fundamentals because of the amount of emotions involved in the midst of uncertainty.
New Zealand GDP reported last night came in at its worst in 29 years, down 1.6% in the first quarter. In the middle of this supposed recovery attempt, it is imperative for everyone to understand how to read the market during a crisis. Housing market data is notoriously slow in being reported and hence, the upcoming decline will have a long tail driven by delayed data and inaccurate reporting.
For those that paid attention to our articles throughout March and April, would know that this crisis, as much as it looked like a health crisis (at face value), was never actually about the health of the people. It was more about the health of the “system”, the health of the economic engines that drive both countries. Weaknesses in the engine are now beginning to show and that’s what we are going to cover in today’s article.