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4:21 pm, July 29th, 2026 - 16 comments
Categories: 2026 oil crisis, economy, national, same old national, uncategorized -
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The very worst crisis is the one from which you learn nothing.
New Zealand has not had an economic stagnation and housing market price decline this bad since the 1970s.
For those old enough to remember that far back, there were multiple causes to our sustained stagnation back then. They will sound quite familiar to what we have been going through for 5 years.
There were the two oil shocks in 1973 and 1979, when OPEC dramatically restricted oil supply. This made oil prices surge worldwide and a much stronger set of price increases in inflation including freight and retail and fuel. New Zealand’s real GDP per capital growth just died.
Sustained oil shock:
We lost a huge direct market for our meat, wool and dairy when the United Kingdom joined the EEC. Prices for all our key exports were depressed hard.
The wool boom that had been sustained through most of the 1960s simply dropped in price for all the cross-bred strong wools we had favoured, and rural land prices for hill country went way down. Farmer walk-offs and suicides went up steeply.
Trade crisis through tariffs and war:
The New Zealand government programme of heavy borrowing from overseas creditors ran out. This triggered an even deeper recession.
Massive heavy overseas borrowing under National:
And the killer for everyone working their asses off: between 1974 and 1980, New Zealand house prices dropped by about 40% in inflation-adjusted terms. This current one in no small part caused by Reserve Bank changes to lending policies.
House price collapse:
That graph ended at 2014. 12 years is a very, very long time ago.
Now, of my aunties and uncles that are still alive and remember the lingering effects of the Great Depression lasting into Northland into the 1940s, they can remember a time worse than this or the 1970s.
But for my generation, this is looking worse than the 1970s..
From the 2021 peak through 2026, nominal house prices dropped, and with persistent inflation, real national house prices similarly declined by around 30%, sending values back to 2019 levels. In heavily affected regions like Auckland and Wellington, real price declines have reached 35% to 40%.
Both the 1974–1980 and 2021–2026 periods have been characterized byreal GDP growth averaging roughly 1.5% to 2.2% annually, high inflation eroding household purchasing power, and global energy/geopolitical shocks disrupting established trading terms and increasing domestic costs.
New Zealand’s unemployment rate is not now as severe as the late 1970s, but it is most certainly hitting Maori and Pasifika and youth the hardest just as it did then.
The National coalition response this term is to:
National’s plan has not worked in the past and will not work in the future, has failed to constrain inflation, failed to stabilise house prices, failed to generate economic growth, and failed to prepare us for precisely the same conditions we found ourselves in 50 years ago.
The sole reason we are not seeing thousands more New Zealanders going bankrupt is because after 20 years, Kiwisaver – a now fundamental New Zealand Labour institution – is doing its job cushioning some from the abslute worst of this crisis:
The results of National’s leadership in the economy are evident.
The ANZ predicts property prices will contiue to fall, across the country but particulary in the North Island.
The BNZ’s Chief Economist Mike Jones shifted forecasts to a flat property market for 2026, warning that inflation-adjusted (real) house prices could face multi-year lows due to rising floating mortgage rates heading toward 7% by 2027.
Kiwibank expects economic growth of 1.2% but inflation heading to 4.5% this year and next.
Since we are a fragile and accident-prone nation, we ought also to imagine it all getting much worse, just like the 197s. Thakfully Brian Easton has the sitorical memory for that:
Unlike 2008, the Crown balance sheet is no longer well placed to withstand a further major shock. Pick your nightmare: another international financial crisis as the current Minsky boom crashes, a major natural hazard, foot and mouth disease…it will not creep up on us, like global warming.
One morning you will turn on your radio, or whatever, and the world will have changed overnight.”
If you check into Brian Easton’s article which contrains the GDP growth scenarios, we are already at Scenario B.
If your job security or financial security have gone backwards, vote this government out.
It is in the interests of the 99% of New Zealanders who are affected by this massive and prolonged economic damage to vote this government out.
Many many people can’t afford housing now. It’s a major driver of poverty in NZ. Why would we want house prices to increase faster again?
I'm a home owner. I want house prices to fall.
Me too. So does the majority of my family (I admit that I haven't raised it with absolutely all of them… I come from a substantial clan).
House wealth is largely theoretical. You buy and sell in the same market. None of us *want* to sell at 1.5 million, in order to buy at 1.1 (if downsizing) or 1.75 (if upsizing).
We would be perfectly content to sell at 750K, to buy at 550K (downsize) or 950K (upsize)
I don't think that anyone wants the housing market to tank. But the majority of us would be happy to have flatline or gradually settling house prices over the next decade – giving wages a chance to catch up.
The issue with NZ economics (or at least, one issue), is that we use theoretical housing wealth as a measure of the health of the economyh.
The best example of this I heard was a guy with a family in Dublin, who had a friend say he should sell his house, since it was worth two million euros. "And what, go live in a hollow tree?"
The difference in the housing market is a two speed economy. If you have tried to build for the lower two thirds of the country, your values are dropping steadily.
The top third who own properties in 'desirable areas at the two million to ten million' it is a different world, as overseas buyers are invited in and our best is very affordable to well heeled foreigners.
To well heeled people, this is a good government,as their wealth is up, to ordinary people it is a government that has made them poorer by removing funding and government jobs, making them bridge the gap of low earnings and high prices by using their short and now long term savings meantime their less desirable assets are sinking.The poor get poorer and the rich get richer.
Low tax means user pays, which drives up the cost of insurance, as the state stops underwriting. "You are on your own" as collective action to avoid calamity is seen as communism
Austerity means just that. They are ideological idiots who keep doing the same thing to each new generation,
The rich economy makes money from assets, not work.
They promise the moon and give cheese.or nothing at all.
The current stagflation is a reprise alright.
1970's
Unemployment went from 0.8% to 1.7% 1976–1978.
Then climbing toward 5.9%–7.1% by the end of the decade and into 1980.
https://teara.govt.nz/en/nga-uniana-maori-and-the-union-movement/page-4
Inflation was high, but at least wage increases matched it – union awards.
I have no problem with property values back at 2019 levels in the North Island and no higher this decade.
We need more jobs and incomes growth relative to property – rather than otherwise.
https://thestandard.nz/open-mike-29-07-2026/#comment-2068097
2019 is still much too high. That was well after the substantial house price inflation which occurred post 2015.
I'd be perfectly happy to have housing prices drop back to 2010 levels.
https://www.macrotrends.net/4777/new-zealand-home-prices
The picture you paint doesn't feel wrong, yet officially there's no recession currently. I did a check with the gizmo, and it only found this: https://www.rnz.co.nz/news/business/595009/nz-economy-to-dodge-recession-but-faces-rocky-year-westpac
I agree that our political ambience seems to have a miasma happening, causing folks to become somewhat deviant. Lux spat the dummy, so the establishment is spooked.
I suspect his mentor told him to do that. Gotta keep them sheeple away from the gate. Goddam gate is an open opportunity! Penny drops, Key hits his phone button…
Learning anything about how to control our aggressions and greeds can't be impossible. But rationality is twisted when it comes to holding your own at the top of society and control. Below on Thailand's advanced state which it reached as early as 1350 emphasises the confused nature of our thinking and drives.
How hard it will be to wrest our country from the mercantile madness that we suffer from today in Kiwiland and even the large old civilisations. Question – How do we step back, get the spoiled children in charge to give up their seats in our present game of Unmusical Chairs?
We have trained citizens in the country who keep telling us what we need to know. But we have agreed to let these Sideshow Charlies run the country and they want to stay cemented in, with us unable to regain a logical system. We vote with no knowledge of the deeper drives of the candidates, ruling their capabilities, and many are 'Only here for the beer'. The Thailand* story sounds familiar – a cycle of advance then destruction, repeat.
Thinking of well-informed professional people should be listened to and accepted eg in economics:
Not like household economics – The full text can be found on video at https://realityofeverything.org/speakers/ganesh-ahirao/
by Roy Murphy July 29, 2026
“The metaphor of ‘government is like a household’ is wrong, dangerous and insidious, and must be refuted outright. It is a lie and totally without any economic or theoretical underpinnings.”
That’s the conclusion of Dr Ganesh Ahirao, a Wellington freelance economist who was the Chair of the Productivity Commission and a Research Director at Business and Economic Research Ltd. He was speaking at the Reality of Everything symposium at Victoria University which discussed how humanity is destroying the world’s resources at an accelerating rate…
…His colleague Morgan Edwards, a PhD student at the University of Otago, said the Crown Settlement Account covers all core Crown Government spending – basically the Government’s bank account. “The reality of public finance is really simple: the New Zealand government creates money when it spends.”
The government doesn’t use taxes or borrowing – so the balance of the Crown Settlement Account is irrelevant. Edwards said, “Government spending is money creation.”…
* "Undefeatable" Medieval Nerve- Center: https://www.scoop.co.nz/stories/HL2607/S00083/undefeatable-medieval-nerve-center.htm
Wednesday, 29 July 2026, 3:51 pm Opinion: Richard S. Ehrlich :
Ayutthaya [Thailand] liked to flaunt its wealth. Many of its marvelous structures and statuary were built as a competitive display of status and power, as well as a humble effort to make spiritual Buddhist "merit" for one's own journey towards reincarnation. Everyone who was anyone in Ayutthaya — or at least anyone with treasure to spare — built temples here along the twin rivers and canals, when monarchs, merchants, and mystics splurged on constructing temples to Lord Buddha.
Ayutthaya's grand palaces symbolized the city's status as a nerve-center for some of the finest art and cultural displays of its time as Thailand's capital from 1350 to 1767.
Alas, Ayutthaya fell victim to pillaging by several Burmese military assaults, especially in the 1500s, and was finally destroyed when it fell into the hands Burmese invaders in 1767 after a year-long siege. Victorious Burmese allegedly melted Buddha statues for their gold, and enslaved 90,000 citizens who were taken back to Burma along with royal family members…
International trade routes linking Europe, India, China and Japan criss-crossed Ayutthaya amid an exchange of porcelain, silk, silver, animal hides, teak, tin and sugar….
…Today, however, such real politick maneuverings are met with regret by Thais and tourists who flock to Ayutthaya to wander amid the traces of what the Burmese could not destroy — both in stone and spirit — and which are being lovingly cherished by the people who live here.You'll also see craftsmen busily repairing various domes, steeples and statues as part of a restoration project which hopes to quality Ayutthaya as Thailand's first "Historic City," which will give it more prestige and much-needed funds to conserve the sites…
The little NZAO had managed to achieve, which was good for us, is being destroyed and it is painful too for us to experience this. Can we miss the damage part and go straight to the recovery and treasured part?
Housing being the great speculative investment (and money not being put into actual productive business) has played a big role in our current demise.
And incomes are not keeping up with costs.
Inequality is getting worse, and all the problems associated with that.
Foreign ownership/oligarchy is stripping this country of its own resources.
This government is a bad one.
You haven't included the Rogernomics era (which was only technically "Labour" if you think that the big movers and shakers of the time later formed ACT;
You also haven't included Ruthenasia. In my adult lifetime (I joined the workforce in 1986, just as Roger's razor gang got up to speed) the 1991 black budget was the worst I experienced.
But, I have to agree these are really bad times and we've had a government that has done nothing to help 'the bottom 90%'.
If you're interested in how things were during Rogernomics and Ruthenasia, here's about the best unbiased documentary of those times: https://www.youtube.com/watch?v=8PISea_Tc4k&t=1173s
Quite true as it's actively sought to make it worse for the bottom 90% via the wealth transfers, privatisation and anything Seymour touches.
"Someone else's country" is a brilliant documentary.
I saw it first at a Film festival in the 1990s – and later bought it on DVD.
People have been exiting their first homes unable to afford to live in them, most crossing the ditch likely never to return.
Congrataluations coalition. They've repeated Muldoon's effort in driving thousands offshore while the corporate media keeps the sheeple distracted and uninformed.
In the naki recently to observe the usual kiwi apathy amongst some visible resistance to that briandead LNG idea one of their 'think' tanks probably feed them.
It's our worst recession because Willis and Co have actively encouraged it with their many idealogical moves, focused cuts wrapped up in various culture wars.
We are not learning from experience, but we should. The reward for failure is experience
it’s very expensive to waste those learnings. https://open.substack.com/pub/tadhgstopford/p/the-sovereigns-dividend?r=59s119&utm_medium=ios
Count yourself lucky if you've got a job, your health and a supportive family.
The world is changing fast (just look at Bordeaux). Nature doesn't give a damn whether or not there is a recession; she has a different agenda.