[Rabbit]

I notice with the significant appreciation of the dollar, importers have not reduced their prices to the end consumer e.g. in my own experience car parts, computers, other electrical goods etc.

At the same time, I notice resident producers e.g. coffee shops etc increasing their prices e.g. a flat-white from $3 to $3.5 (Inflation?)

I suppose therefore that importers and non-exporters will be reporting increased profits.

Meanwhile the poor punter - the man in the NZ Street continues to get squeezed.

This, together with the rise in interest rates, could be detrimental to the economy and individual in more ways than one, with many fixed term morgages up for renewal.

If I was a current potential immigrant coming to NZ, I would certainly defer my move (if I could) for at least six months whilst it all settles down - including the uncertainty and potential bubble surrounding property prices.

If I was an NZ property owning immigrant thinking of going home - I would do it now, whilst NZ property prices and the NZ currency are still high.

All of the above suggests some sense of downturn.

Rabbit.

[tiefchord]

And the rich get richer.. . the problem is that until people are up in arms, or protesting through some kind of mechanism, it will always continue.

[Ana&Steve]

Hmm, I was under the impression that the appreciation of the NZ dollar was generally a bad thing especially for the import/export trade...who in NZ IS benefiting from the strong dollar? I guess that's the real question!
Ana

[Super_BQ]

My cousin works in logistics at The Warehouse. I gave her my complaint too stating why are their products so expensive compared to the American counterpart stores (Wal-Mart, etc.). To be specific, I told her that why should something ie. 15" LCD TV sell for 2 or 3 times more in NZ than in the US. For awhile Wal-Mart had 15" Spiderman LCD TVs for $100. I told her just because NZ is a small country (with small buying power), doesn't mean the factories in China offer 300% increase for NZ buyers (or 300% discount to big American buyers).

When importers don't re-adjust their prices downward, then we get something called inflation. As too much $ becomes freely available in the economy, the central bank of NZ gets worried and starts hiking up interest rates.

The situation is quite remarkable for NZ. No other developed nation offers as high interest rate as NZ. This creates an anomaly. Nations that have low interest rates will bank it in NZ, thus fueling more inflation.

Perhaps if Kiwi's weren't so obsessed in buying land and property, the effect of inflation and high interest rates can be kept in line with other developed nations. Foreign investors wouldn't be so crazed to invest in NZ and for once, the less fortunate can have a chance of owning a roof over their head.

[stu70]

Just yesterday I read an article about an imminent big downturn in the NZ real estate almost being a certainty. You are right, this is a good time to unload especially if you are speculating and are on thin ice in terms of financing. It is best for newcomers to wait out till the dust settles

[sfordjasiri]

If I was a current potential immigrant coming to NZ, I would certainly defer my move (if I could) for at least six months whilst it all settles down - including the uncertainty and potential bubble surrounding property prices.

If I was an NZ property owning immigrant thinking of going home - I would do it now, whilst NZ property prices and the NZ currency are still high.
Rabbit.

I agree that NZ property will have to come down, although "The Economist" magazine has been predicting this for the past couple years.

But... I think the value of the NZ dollar will only go up (in the long term) with respect to the US dollar. The US's 9 trillion (9,000,000,000,000) dollar national debt (financed by other countries loaning the US money) will soon become a problem that can only be solved by the US printing more dollars and devaluing the US dollar. Americans will soon be unable to keep spending as they have been, and when they stop buying stuff from other countries at the rate they are now, the other countries will stop loaning the US money.

[barryp]

There was a time (tho admittedly a time more than two decades ago) when the NZ$ was worth MORE than the US$.

I have been reading reports of the impending NZ property values collapse pretty much weekly for a year and a half. During that time there has been no reduction in prices whatsoever, anywhere in NZ. Likewise with reports of a recent-record-high NZ$, whose value was to fall drastically at any time but did not.

Can't blame new immigrants for all of that, imo.