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09/08/2013

22/07/2013

“It is not the mountain we conquer but ourselves.”
~ Sir Edmund Hillary.

19/07/2013

Kiwi stay home as Aus economy cools
JAMES WEIR

New Zealand is seeing the biggest gain in net migration for four years, with the former flood of people leaving for Australia slowing to a steady stream.

Statistics New Zealand figures out today show that overall 2300 more people arrived to stay here long term, than left the country in June. That was the highest monthly net gain since the middle of 2009, before the Canterbury quakes sparked a rush of people leaving for Australia.

The increasing net gain of migrants over the past six months reflects both more people arriving and fewer New Zealanders leaving for Australia, Statistics NZ said.

That was because the New Zealand economy was picking up, while prospects in Australia were cooling as that economy slowed.

The seasonally adjusted net loss of 1600 migrants to Australia in June 2013 was the smallest net loss since July 2010 (also 1600). The latest net loss to Australia was well down from a high of 3600 recorded in September 2011.

In the June 2013 year, New Zealand had a net gain of 7900 migrants. This is up from a net loss of 3200 in the June 2012 year, but below the annual average of 9,400 over the last 10 years.

19/07/2013

They Say Less is more

13/07/2013

Big Mac index shows Kiwi overvalued
LAURA WALTERS 12/07/2013

The New Zealand dollar is overvalued by 6.3 per cent (adjusted on a GDP per capita basis), according to The Economist's Big Mac index.

The index, which is published twice a year, was started by the business publication in 1986 as a light-hearted guide to whether currencies are at their "correct" level.

It is based on the theory of purchasing-power parity (PPP). This is the notion that in the long run, exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services - in this case, a burger - in any two countries.

The price of a Big Mac in New Zealand is US$4.30 (NZ$5.50), compared with US$4.56 (NZ$5.81) in the United States.

At present, US$1 can buy about NZ$1.28.

The index, when it compares New Zealand's fair-value exchange rate with New Zealand's gross domestic product per capita, calculates the kiwi as 6.3 per cent overvalued.

This adjusted index addresses the criticism that you would expect average burger prices to be cheaper in poor countries than in rich ones because labour costs were lower, The Economist said.

The Big Mac adjusted index said the kiwi was overvalued by 11.5 per cent at the start of the year.

PPP signals where exchange rates should be heading in the long run, but it says little about today's equilibrium rate.

Westpac market strategist Imre Speizer said readings from more conventional long-term PPP readings also placed the kiwi as overvalued.

Westpac's PPP had the kiwi overvalued by 25 per cent in the long term, he said.

The burger index was usually consistent with more conventional currency valuations, he said. "Even serious academic economists keep an eye on it."

It was difficult to get an accurate PPP measure as it was hard to find an identical basket of good across a range of countries, he said.

The easily digestible exchange rate index was "not to be dismissed".

"But if you wanted a serious currency valuation, you wouldn't just rely on the price of a hamburger," Speizer said.

The GDP-adjusted valuations in the index were an improvement, he said.

Burgernomics was never intended as a precise gauge of currency misalignment, The Economist said on its website.

However, the Big Mac index had become the subject of at least 20 academic studies, it said.

The GDP adjusted index has the Australian dollar undervalued by 12.9 per cent and the British pound undervalued by 3.4 per cent.

The countries that stood out on the index were Brazil, which, according to the adjusted index, was overvalued by 71.6 per cent, and the Hong Kong dollar, which was undervalued by 44.8 per cent.

The kiwi was trading at US78.30 cents early this afternoon.The website said PPP signalled where exchange rates should be heading in the long run, but it said little about today's equilibrium rate.

- © Fairfax NZ News

13/07/2013

N NZ Herald on 10 July 2013

Lack of space' in Auckland CBD
By Colin Taylor
5:30 AM Wednesday Jul 10, 2013

Construction vital for businesses to flourish.

EXPAND

Deferment of new office construction in the Auckland CBD will restrict growth within New Zealand's largest employment zone, predicts Chris Dibble, Auckland research manager at Colliers International.

"For 2 years the Auckland CBD office vacancy rate has declined and is forecast to remain historically low," Dibble says. "The top end of the market will soon be under significant pressure with a lack of space limiting options and hampering the growth of businesses that want to expand."

While some of the businesses in prime office space may shift to city fringe or secondary accommodation, many will want equivalent or better quality space within the CBD, he says.

"Given the lead time required for construction, there needs to be a new office building in the CBD started sooner rather than later so that Auckland's growth is not hampered."

According to the latest survey by Colliers International Research, businesses occupying top-end space are the most active segment of the market, with the prime vacancy rate almost halving in the past two years, reaching 5.8 per cent in June 2013.

"While there is a limited pool of large tenants that are not on long leases and who are able to pre-commit, there is still leasing activity," Dibble says.

"Two notable examples in the past seven months are major lease renegotiations by law firms Russell McVeagh of 6200sq m and Bell Gully of 6500sq m. Both are in the Vero Centre and were negotiated by Rob Bird and Paul Dyson of Colliers International."

Dibble says efficient premises may be able to accommodate employment growth in less space, but there will be a tipping point with overflow requiring businesses to move to new premises.

"Without this new space, business and employment growth will be restricted, putting the brakes on the engine room of Auckland," he says.

10/07/2013

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10/07/2013

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