Is NZ’s Property Market Unproductive? The Real Economic Impact | Episode 415

·12 min·1 clip

James Blair questions how the S&P 500 is a productive asset class for New Zealand, setting up a debate on property's economic role.

In episode 415 of Cheques and Balances, hosts James Blair and Michael Vincent examine the economic impact of New Zealand's property market. The episode opens by challenging the common narrative that property is an unproductive asset class, questioning whether alternatives like the S&P 500 are any better for the local economy. The hosts, both qualified financial advisers, have long discussed on their podcast that people often invest in property instead of shares or businesses, which are seen as more productive. They break down the numbers, showing that the property sector directly contributes over $50 billion a year, about 15% of New Zealand's GDP, and employs 235,000 people, or 10% of the national workforce. This data counters the trope that property doesn't employ anyone. The discussion highlights the wide range of industries supported by property, including construction, real estate services, and suppliers like brick and tap companies. A key point is the misconception that property only refers to residential investment properties; the hosts clarify that it includes commercial, industrial, and office properties. They compare the property industry to others, noting it employs more people than retail trade. The episode touches on KiwiSaver, with $1.6 billion invested in property and Sam Stubbs using Simplicity funds to build rent-to-own housing to address supply issues. After a break, the hosts explore how to make the property market more productive, suggesting shifts toward commercial property, modernizing construction to prevent leaky houses, and considering golden visas to attract foreign investment. They debate the touchy subject of selling expensive houses to foreigners, arguing it brings value to New Zealand. The episode wraps by reiterating that property is a significant part of the economy, even if not as productive as some asset classes, and encourages listeners to subscribe.

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