See­ing the signs of the ‘prop-oca­lypse’

The Tribune (NZ) - - BACKYARD BANTER - ROB STOCK rob.stock@fair­fax­me­

Apoca­lypse cult mem­bers tend to be on the look­out for signs of the rap­ture.

They hope fer­vently to see oceans turn­ing red, deadly plagues, famines and earth­quakes as these are signs they’ll soon be with their God.

There’s been a vein of dooms­day prophets ex­pect­ing (hop­ing for) a New Zealand ‘‘propoca­lypse’’.

To date their pre­dic­tions of the hous­ing bub­ble burst­ing have proved wrong.

The lat­est prog­nos­ti­ca­tion on this front was for an 11 per cent fall in property prices by 2019.

Okay, not re­ally a property apoca­lypse. For that you need Bri­tish, or Ir­ish-style nega­tive eq­uity, and thanks to the Re­serve Bank’s un­demo­cratic mort­gage lend­ing re­stric­tions, most re­cent buy­ers have had to have de­posits of 20 per cent or more.

I ac­cept pre­dic­tions with in­ter­est, but lit­tle faith. I won’t be plan­ning my life around them.

Hu­mans are rot­ten at pre­dict­ing the fu­ture.

We seem hard-wired to give cre­dence to in­for­ma­tion that sup­ports our be­liefs, and dis­count that which con­tra­dicts them.

We are over-cred­u­lous of opin­ion-lead­ers with an axe to grind.

We are apt to wake up and find the world is far more com­pli­cated than we thought.

Dur­ing a work­ing life­time of see­ing prophe­cies miss the mark, I have stayed out of the prophecy game.

Un­til now, that is. I am start­ing to see prophetic ‘‘signs’’ ev­ery­where.

The first sign is the des­per­a­tion of the young suits.

My great theme of the last two years has been the sad, and des­per­ate well-paid suited types ei­ther un­able to buy a place, or adopt­ing des­per­a­tion strate­gies like buy­ing places in cheaper far­away places, and ei­ther ac­cept­ing mega com­mutes, or car­ry­ing on rent­ing.

When bright young white bankers can’t buy a half-de­cent place within 15 kilo­me­tres of work, you know things are out of whack. Cap­i­tal, not in­come, is the thing you need to buy a house these days.

Se­nior econ­o­mists and ris­ing business lead­ers can’t af­ford to buy within five kilo­me­tres of my leafy sub­urb home.

Re­cently, we were even treated to the head of an Aus­tralian bank call­ing for tougher lend­ing re­stric­tions.

There’s been an in­crease in clever, but un­help­ful news ar­ti­cles about peo­ple liv­ing in tiny homes, rentvest­ing, buy­ing with friends, com­mut­ing to Auck­land from Hamil­ton, etc.

Even the cheer­lead­ers for ris­ing house prices have gone quiet lately. The Na­tional Gov­ern­ment, the de­fender of priv­i­lege, has been look­ing un­com­fort­able.

These are signs we are at an ex­treme mo­ment in our his­tory, and at a height­ened risk of eco­nomic up­heaval.

New Zealand has gone so long with­out a real eco­nomic cri­sis, we have al­most for­got­ten they can hap­pen.

For house­hold­ers, this is a time to save and pay down debt.

No­body ever re­gret­ted hav­ing paid off debt be­fore in­ter­est rates rose, or eco­nomic tur­bu­lence struck. For savers, this is a time to keep your nerve, carry on dripfeed­ing money into the mar­ket.


Apoc­a­lyp­tic think­ing is of­ten wish­ful think­ing.

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