PHOTO: Cameron Bagrie on The AM Show. Images – Getty Images/The AM Show
While the Government has crowed about its success in keeping the economy afloat during the biggest crisis of a generation, not everyone’s benefitting.
Household wealth is on track to increase $800 billion in just two years thanks to ballooning asset prices. It increased $402 billion in the year to March 2021, rising almost as much in 12 months as it had in the previous four years put together.
And it’s on track to do the same again, economist Cameron Bagrie told The AM Show on Tuesday.
“By any benchmark, that is absolutely off the charts. You’re talking numbers here that are around two times the size of GDP or the general economy.”
The result – at least for those who own property and other assets inflating in price thanks to the Reserve Bank’s record-low interest rates – is they feel richer and are more likely to spend, which Bagrie says “has been a pretty big part of getting the New Zealand economy back on track”.
“The worry is that… the massive dichotomy between the haves and the have-nots. We’ve got what’s called the K-shaped recovery. Some parts of society, if you’ve been on that property or asset price ladder, you’ve benefited tremendously from low interest rates and asset prices moving up.”
READ MORE VIA NEWS.COM.AU
- Price of average Kiwi home cracks $1 million
- Abandoned land for sale
- Developers bailing out of house buyer contracts via sunset clause
- Prime Minister Jacinda Ardern is now a property millionaire
- China’s ticking time bomb a massive threat to the NZ property market
- NZ property sales plummet 21.7% | REINZ
- Angela Bloomfield, actor and real estate salesperson
- Global financial crash: China Evergrande heading for ‘bankruptcy in days’ | WATCH
- How high will interest rates rise? | WATCH
- Tim and Arthur win The Block NZ 2021 with biggest cash haul in show’s history