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[Chris W]

Want to see some hyperinflation happening in the world currently?

Here you go. What happens to local residents living in these economies?

...

[Chris W]

Hyperinflation has occurred in many countries recently - Zimbabwe, Venezuela, Argentina.

Also has happened in history - Germany Weimar Republic, Hungary post World War 2.

When hyperinflation hits the local economy, look what happens to the local residents in those countries....

[Chris W]

Barry Sternlicht is talking is own book. His real estate investment fund has stopped making redemptions to his investors by limiting redemption requests....

[Chris W]

Some mathematics:

Another common line of reasoning is buy property as the mortgage erodes with inflation.


https://www.oneroof.co.nz/news/can-r...mortgage-41757


So how has that worked out in 2022?

1) House prices have fallen 15.2% in nominal...

[Chris W]

Also interesting to note inflation adjusted price changes since peak.

National: -20.7%
National (ex Auckland): -17.4%
Auckland: -25.3%
Wellington: -28.5%

Some people were saying early last year that house prices won't fall due to inflation....

[Chris W]

Similar in many other countries where residential real estate is the most favoured asset for local residents.

e.g Australia, US, Canada, UK, NZ....

[Chris W]

New Zealand - REINZ Housing Price Update (December 2022)

Prices MoM (since peak):

- National -1.6% (-15.2%)
- National (ex-Auckland) -1.3% (-11.6%)
- Auckland -2.1% (-20.1%)
- Wellington -2.5% (-23.5%)

[Chris W]

Is that what the RBNZ is trying to do?...