Archive for March, 2013

Singapore Wins Hands Down When It Comes to Being a Good Place to Live

All up, for me Singapore wins hands down when it comes to being a good place to live while working as an expat servicing the Asian region. But choice of location will very much be a function of what your target markets are. If China then you will find Hong Kong the better location. If the ASEAN nations then it would be Singapore. Of course I say that without having yet visited any other members of ASEAN — which clearly is something I shall need to do over the next couple of years, perhaps starting with something after a trip to Japan I have coming up in early-November.

What was the best bit for me? The Jurong Bird Park. I deliberately held off visiting it a second time to have something solid to look forward to down the track.

A reporter called me up and when I said I was in Singapore he asked ‘Which city?”


Drought pushes out even further the timing of rate rises in New Zealand, so staying floating looks good,   though keep an eye out for discounted long ­term fixed rates.

I recall writing in this section many months ago that for this year I’d probably not have much to say with regard to interest rates because a rate rise would be well down the track and there would be lots of uncertain factors staying the hand of our central bank. The very last thing which they will want to do is repeat the 2010-11 experience where they raised the cash rate from 2.5% to 3% then had to cut it back down again because the data were bad from late-2010. The February 22 earthquake gave them a handy reason for reversing the earlier two tightenings.

Looking ahead now they see an economy who’s growth outlook is deteriorating due to the effects of the drought so far and the extra effects to come the longer it lasts. They see an exchange rate which is already high and know that once they start raising rates it will go even higher.

Yet they also know that with so many skilled people having left the country over the past five years, low training having been undertaken by businesses, and suppressed pressure building up for wage rises from people who’ve been asked to share their company’s pain the past five years, inflationary pressures from the labour market will eventually be a problem. Plus the housing market is rising firmly and building costs are going to head in only one direction — same as electricity prices, and Sky charges, and insurance premiums, and local authority rates, plus food due to the drought effect.

The RB will be extremely reluctant to risk relying much on unconventional monetary policy changes (in the NZ context) because if they over-estimate the impact of maximum loan to value ratios for instance they’ll have to later on play catch-up with the official cash rate and send the NZD through the roof.

What it all adds up to even before we start trying to factor in the many uncertainties overseas, is that they will not be touching the cash rate for quite time. That applies even taking into account this morning’s far stronger than expected GDP number showing our economy grew by 1.5% during the December quarter and not the 0.8% commonly expected. The NZ economy managed 2.5% growth last year after growing by 1.4% during 2011 and 1.8% during 2010. Our economy is now 8% bigger than in the depths of the recession in 2009 and almost 4% up from the late-2007 peak.

With regard to rate movements this week — nothing happened to suggest a break up or down in rates from trading ranges in place for many months now.

Source: Tony Alexander, BNZ Chief Economist

March 29 2013 | Tim Manning | No Comments »

Offshore Buying of NZ Property is Only Going to Grow and a National Debate on Rules Regarding Foreign Purchases Would Seem Useful

HOUSING MARKET UPDATE: Offshore buying of NZ property is only going to grow and a national debate on rules regarding foreign purchases would seem useful.

I have received a good number of emails from people who have either read my survey of real estate agents or saw it reported in the newspaper. Almost all expressed incredulity at the low proportion of sales reported as going to Chinese people. One person advised looking at property registers to see all the Asian names owning houses in certain streets. One suspects they are unaware that New Zealand has an Asian population of near half a million people and that some people with Asian names have had their families here for generations.

Mainly people gave the same anecdotes about Chinese buying at auctions. But again they gave no indication that they had ability to detect whether that person already lived here, intended living here, or was buying with no intention of occupying the house. Mainly however, I don’t think many of the people emailing me had knowledge of areas outside prime school zones and traditional destinations for migrants such as the North Shore.

In that regard some greater granularity in another survey would be useful. But I don’t plan repeating it every month – maybe every three months is all that is necessary.

Those interested in the foreign buying topic may be interested in this.

This url will take you to a pdf copy of the annual report issued by the National Association of Realtors in the United States called “Profile of International Home Buying Activity 2012″ It covers the year to March 2012. The NAR survey found that 8.9% of US house sales were to people offshore or only recently migrated to the United States, measured by dollar value. Some 4.4% of sales were to foreigners not planning to shift to the United States.

My survey with the RE1NZ found that 9% of NZ dwelling sales are to people offshore, and some 42% plan coming back. Adding in half the 44% who responded ‘Don’t Know” we get 64% of people offshore buying NZ houses planning to move here – or 36% planning to stay away. Then if we take 36% of 9% we end up with about 3.2% of NZ dwelling sales being to people offshore not planning to shift to New Zealand. This is lower than the US figure of 4.4%. But the US data is by value whereas the responses from NZ real estate agents are likely to have been on the basis of property numbers. Given that the average purchase by a foreigner in the United States is for $400,000 compared with $212,000 for US-based buyers, it looks like our proportion of sales to people staying offshore is in the vicinity of the US proportion.

If we look at where the NAR survey shows that foreign buyers are coming from we get this – remembering that our survey found that 18% of sales offshore were to people in the UK (foreigners and expats), 15% to people in China, and 14% to people in Australia. In the United States 24% come from Canada, 11% from China, and 8% from Mexico. Therefore courtesy substantially of buying by their northern neighbours, the proportion of property sales to Chinese in the United States is lower than in New Zealand. But the key point to note is that our 15% is not vastly different from their 11% of sales to Chinese.

Note that there are just over 1 million realtors in the United States so the NAR survey response of 1,745 is a response rate of about 0.17%. Our response of 355 out of just over 10.000 is a response rate of about 3.5%.

If I Were A Borrower What Would I Do?

Stay floating but look to fix half of my debt at a rate of three years or beyond if someone offers a very discounted rate. Same comment as for the past few months. Plus, for your guide I struggle as yet to see a serious chance of fixed rates suddenly shooting up though this is likely to happen at some stage. A heavy influence will be US monetary policy including money printing operations.


In Europe the news is all about the 0.5% of the Euro-Zone GDP accounted for by Cyprus rocking financial markets with fears of bank runs and capital flight from heavily indebted countries because of the proposed but now ditched levy on Cyprus bank deposits. In Italy there is no government in place. In Spain there is a political scandal. In Greece there is continuing failure to implement reforms agreed as part of previous bailouts.

Basically, much as there was excitement about some strong import data for Germany last week along with good German employment data, the story for Europe remains one of the debt crisis rumbling on for many years. This means a weak macro-environment facing NZ businesses (but it pays to remember it is the niches which matter there and everywhere else).

In the United States continue to come out in reasonable shape, though the Fed. Have just cut their growth forecasts slightly? Their money printing operations show no sign of being curtailed this year.

Source: Tony Alexander, BNZ Chief Economist

March 29 2013 | Tim Manning | No Comments »

Dark Forces at Work in Auckland Plan

The unitary plan, which gives effect to the non-statutory Auckland Plan, is akin to a laundry-type list of goals and “feel good” aspirations. The government has every right to feel that the Auckland Council is being less than honest with the people of Auckland. Mayor Len Brown has been forced to admit that he got things terribly wrong when he claimed last month that there are 15,000 sections within the Auckland urban footprint on which housing construction can begin “right now” Last October he put the number at 18,500.

It is clear that both Mr Brown and his deputy Penny Hulse, are unhappy with the governments reaction to the draft Auckland Unitary Plan released last week. Mr Brown does rely on officials to give timely and accurate advice. But while a number of councillors and knowledge-able property developers questioned the figures provided to the mayor, he accepted the advice he was given without question because it suited his ideological perspective. According to the mayor and his deputy there are “dark forces” within the government trying to discredit their directives on where and how AncIdanders should live? By all accounts Ms Hulse has told Housing Minister Nick Smith that he doesn’t understand the council’s proposal. Mr. Brown has written to Prime Minister John Key asking him to change his position that the plan should go through a rigorous submission process before it becomes operative. Against the background of the appalling discrepancy between the initial figures and the reality of available housing land, the government has rightfully asked what else in the plan is based on myth and driven by leftist ideology

I can tell the government that the unitary plan, which gives effect to the non-statutory Auckland Plan, is akin to a laundry-type list of goals and “feel good” aspirations. The Auckland Plan is required by legislation to be evidence-based to support the council’s decision making. It is at this point at which the plan becomes unglued. There is no evidence that Auckland can accommodate the 280,000 additional dwell-ings required. There is no evidence presented that some further peripheral extension to the metropolitan urban limit (MUL) will have a detrimental effect on rural agriculture or horticultural production. There is, however, evidence available that a more compact city leads to greater traffic congestion. The third annual INRIX National Traffic Scorecard showed that the world’s most congested cities are high density European centres such as Milan, Brussels, Paris and London. Despite having sophisticated public transport systems these cities have per-formed poorly compared to low density cities. In fact, 21 of the top 25 most congested cities are in Europe. These cities all have higher population densities than Auckland and suffer massive traffic congestion.

The cost of congestion in Auckland is estimated to be $1 billion a year. This cost will only increase with more urban crowding. Ms Hulse made much of promoting the draft unitary plan as a positive for children. She held up her grandson and declared: “We are building a city for him.” She should read a study, Achieving a Healthy Home Environment, by Flinders University Adelaide. It contains data that shows high-density living and the lack of a backyard is not conducive to children living a fit and healthy lifestyle. A consultant paediatrician, Dr Nicola Spurier, who headed the study, reported that South Australian children with big backyards were less likely to be overweight and inactive than those with small courtyards. It seems to me the “dark forces” in this debate reside in Auckland rather than in Wellington.

Source: National Business Review

March 29 2013 | Tim Manning | No Comments »

Tony Alexander on why Westerners are afraid / disrespectful of the Chinese

Tim Manning 阅读了 Tony Alexander 写的文章, Tony 是BNZ银行的首席经济分析师。 他发表了“与中国一起成长”的系列文章,其中列述了很多有趣的观点,值得您的阅读。

Tim Manning read an article by Tony Alexander (Chief Economist) on why Westerners are afraid /disrepectful of the Chinese.  (Scroll down for English translation.)



这篇评论由Tony Alexander 编写,他是BNZ银行的首席经济分析师。 文中观点仅代表个人,与BNZ银行无关。


  • 当中国成功的让世界历史上最多的贫困人口脱贫,
  • 当中国给予非洲的经济支持比西方国家过去上百年所做的还要多,
  • 当中国的经济在全球金融危机时增长超过40%,而其他西方国家疲于挣扎,
  • 当中国为西方国家的消费者提供了上兆亿的廉价产品,
  • 当中国用闭关锁国的五千年历史作为“和平崛起”不插手他国事务的最好举例?


对 这个问题的回答是 – 有很的原因,有的合理,有的则不然,虽然它们都是辩论的好题材。 这篇文章共收录了55个原因,除了第一个, 其他排序不分前后。 对于这些原因的研究始于2012年9月。收集的材料来源广泛 – 主要是从每天的新闻中取得,而不是从学术研究文献中获得。

本文的作者是Tony Alexander, 他是BNZ银行的首席经济分析师,在惠灵顿地区工作, 邮件联系地址为



我 们不知道在中国大陆的人如何生活以及他们在想什么。我们对他们的了解远不能使我们理解他们的家庭,生活,社会环境,欢乐,以及面临的问题。我们不知道在中 国,高,中,低收入家庭的居住环境会有什么不同。我们不知道中国的学校何时入学,何时毕业,不知道他们要花多久在大学里学习,他们的国家运动是什么,他们 的孩子放学后有什么活动,他们有多困难找到工作, 等等。


同 样,对中国领导人的了解也是如此。传统来讲,中国的政治家们远离民众,与民众通过书面交流,而不是口头沟通。他们也不参与任何家庭形式的活动(例如参加棒 球比赛,观看橄榄球和篮球比赛)。虽然在中国国内,前任的胡主席被树立成祖父式的领导者, 新一代的领导者已经开始使用一个类似于推特的网络帐号。


Why do Westerners fear or show disrespect for China when

•    it has produced the biggest movement of people out of poverty in world history,
•    has done more to provide an economic base for Africa than decades of Western aid have been able to achieve,
•    has grown over 40% since the global financial crisis while Western economies have struggled,
•    has delivered trillions of dollars in cheap goods to Western consumers, and
•    when China’s history for five millennia is one of physical containment as a near land-locked civilisation, which professes itself as having a “peaceful rise” advocating non-interference in other states?

There are many reasons, some valid, some not justified, and all good topics for debate. This document runs through 55 of those reasons in no particular order of importance apart from the first item. Research for this list started in September 2012 and although there will be factors relevant to the discussion which are not mentioned here, eventually a cut-off date had to be selected. The material comes from a wide variety of sources – mainly day to day media rather than academic publications.

The author Tony Alexander is Chief Economist at the Bank of New Zealand, is based in Wellington New
Zealand, and can be contacted at this email address

As noted, the 55 factors are presented in no particular order of importance, apart from the first. And it should be noted that one could undertake a similar exercise for every other country, including New Zealand.

Not enough Understanding of the Chinese Culture and Values

We do not know how mainland Chinese live and what they think. In the West people do not know the Chinese well enough to be able to see them in the same family, living, social situations facing the same joys, delights, problems, and procedures that we experience. We do not know what the inside of a low, middle or upper income Chinese house or apartment looks like. We do not know at what time schools start and finish, how long people spend in university, what the national sports are which children might play after school, how hard it is to get a job etc.

This is a problem because plentiful scope exists for imagining the worst about the Chinese, their values, their lifestyles, and their actions.

The same applies to Chinese leaders. Traditionally Chinese politicians have been remote from their people, communicating in written form and engaging neither in communication through oratory nor familiarisation through participation in typical family activities (attending a baseball game, watching netball and rugby) – though domestically efforts were made to portray previous Premier Wu as grandfatherly. The new Premier has started a Twitter-like account.

We cannot form an opinion as to the honesty and integrity of Chinese leaders which is very problematic because we continually judge and have systems in place to facilitate the judging of those who lead us in the West. Our system of rule is based around continual monitoring of those to whom we give power.

To view Tony Alexander’s website, please go to

March 11 2013 | Positive Relationships | No Comments »