New Zealand Economy

New Zealand’s unemployment rate increased to 5.1% in Q4 2024 from 4.8% in Q3 2024. In comparison, Australia’s unemployment rate was 3.9% in the fourth quarter of 2024 (4.1% in January), the largest difference since Q3 2012.

The Reserve Bank of New Zealand has cut the official cash rate by 1.75% to 3.75% over the past six months. New Zealand’s gross domestic product (GDP) rose 0.7% in the Q4 2024 quarter, following a 1.1% decrease in the Q3 2024 quarter, according to figures released by Stats NZ on Tuesday.

The Reserve Bank of New Zealand’s 1.75% reduction in the official cash rate has finally stimulated an upswing in New Zealand house prices. The Real Estate Institute of New Zealand’s (REINZ) House Price Index jumped by 1.4% in February to be 0.5% higher over the quarter.

Statistics New Zealand released net migration data for January, showing that annual net permanent and long-term (PLT) migrant inflows declined to 32,471, continuing the declining annual trajectory. This is just above the post-2000 historical averages (30,000) but is well below the 135,500 October 2023 year peak.

On Thursday, Statistics New Zealand released data on Building Work Put in Place, which showed that residential construction plunged by 4.9% in Q4 2024, to be 25% down from its previous peak in Q3 2022.

The Real Estate Institute of New Zealand’s (REINZ) house price index (HPI) for January was released this week.

New Zealand’s housing bubble has burst after recording one of the world’s largest house price increases during the pandemic.

Statistics New Zealand has released net migration data for December, which showed that annual net permanent and long-term (PLT) migration inflows fell to 27,000, the lowest level since December 2022 and well below 135,600 in October 2023.

Major bank ABS believes that the Reserve Bank of New Zealand will cut the official cash rate by 0.5% at next week’s monetary policy meeting.

I reported on Thursday how 48,000 New Zealand citizens left the country in the year to November 2024.

Statistics New Zealand released the Q4 Labour Force Survey this week, revealing that employment fell over the quarter and the unemployment rate hit a 4-year high of 5.1%.

New Zealand is experiencing a significant outflow of citizens, as illustrated by the following chart from Justin Fabo from Antipodean Macro.

In January, Auckland’s largest real estate agency, Barfoot & Thompson, reported a hefty decline in median and average sale prices.

The Reserve Bank of New Zealand has cut the official cash rate by 1.25% over the past three monetary policy meetings.

New Zealand’s labour market is a mess.

Immigration into New Zealand has fallen sharply, driven by increasing numbers of Kiwis fleeing to other countries (including Australia).

On Thursday, Statistics New Zealand released the national accounts for Q3 2024, which reported a 1.0% decline in GDP over the quarter to be 1.5% lower annually.

Last week’s Q2 official population data from the Australian Bureau of Statistics (ABS) showed that Australia’s net overseas migration has slowed materially, down to 445,700 in Q2 2024 from 555,800 in Q2 2023.

New Zealand has experienced the most significant decline in per capita GDP in the English-speaking world over the past year.

The latest labour force data for New Zealand showed that filled jobs fell by 0.7% in Q3, the second consecutive quarterly decline.

The Reserve Bank of New Zealand has cut the official cash rate by 1.25% over the last three monetary policy meetings.

The Reserve Bank of New Zealand has already cut the official cash rate by 1.25% to 4.25%.

The Reserve Bank of New Zealand’s aggressive monetary policy, which raised the official cash rate to a peak of 5.50%, has successfully deflated the nation’s house price bubble.