The three most Important Lessons to be learnt from 2010 all reference ‘housing’


This Rodney’s Raving looks at some lessons that should be learnt from the 2010 experience. These lessons are of valuable, on-going relevance to firms and individuals impacted by cycles in both economic growth and housing market activity.

Excerpt from report—

“Economic activity fell $51m in the 2010 September quarter based on the more accurate production measure of GDP. Residential building activity fell $102m in the September quarter. These are Stats NZ numbers. Simplistically, if residential building activity hadn’t fallen in the September quarter, GDP would have increased in line with the RBNZ’s estimate of 0.3%. Residential building activity will have fallen further in the December quarter, meaning economic growth will be weak and possibly even negative.

What can we learn from the 2010 experience? I believe the most important lessons are:

1. The pivotal role the housing market plays in economic cycles.

2. The economic forecasters are particular bad at predicting housing market cycles.

3. A coal-face understanding of what is going on in the housing market and economy more generally is critical, especially when left-field events, like the property tax changes, have a major impact.”

 

Click to read Rodney’s 4-page raving here

Source: Rodney Dickens -Managing Director and Chief Research OfficerStrategic Risk Analysis Limited  / http://www.sra.co.nz

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