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  • Robert MacCulloch

A couple of days ago Down to Earth Kiwi queried the meaning of this formal public statement by the Reserve Bank on the topic of the run-away housing market: "Resilient household incomes, bolstered by wage subsidies .. and supply constraints including land use restrictions and barriers to the supply of infrastructure have also contributed to the recent surge in demand".


Seems like they were saying less supply leads to more demand. We queried it direct with the boss. So today the Bank changed it to read: "Resilient household incomes, bolstered by wage subsidies .. & supply constraints including land use restrictions & barriers to the supply of infrastructure have also contributed to the recent surge in prices".


Spot the difference.


Sources:

https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Factsheets%20and%20Guides/guide-houseprice-sustainability.pdf?la=en&revision=5f763081-a4bd-4d54-93ab-edc0e1f43828

  • Robert MacCulloch

Whereas the news in NZ has largely so far centered on the availability of supplies of our vaccine and the speed of the roll-out, the news in countries like the US is shifting to what's happening on the demand side.


The Guardian newspaper in the UK reports that "declining demand for Covid-19 vaccines in the US is causing states across the country to refuse their full allocations of doses from the federal government, despite concerted efforts to raise national take-up rates ... US oversupply comes as countries suffering worsening Covid infections are calling on the Biden administration to release vaccine supplies".


Whatever weakness there is on the demand-side in the US, wouldn't one expect it to probably be even weaker in NZ? Since, unlike the US, we don't have community cases of the virus, so there has to be less urgency to get vaccinated here compared to the States. Who knows how this will play out, since, as we noted in a previous blog, when it comes to the demand-side, psychological factors play a hugely important role.


Sources:


https://www.theguardian.com/world/2021/may/08/us-coronavirus-vaccine-demand-states-turning-down-doses


 

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