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15 hours from now our stage 4 lockdown in NZ ends. Most companies were given 12 weeks pay per employee, so might be no drastic changes for another 8 weeks. Most companies have been closed for 4 weeks so unable to declare bankruptcy, and only a small proportion will reopen tomorrow. There are many businesses who do not have contingencies for 4 weeks downtime, let alone more. Many industries will simply cease to exist, at least for the near future: tourism, restaurants, hotels, casinos, pubs, bars, bricks and mortar retailers, stadiums, airlines and (insert others). NZ is an economy based primarily on tourism and exports of food and forestry. I'm not sure to what extent these export industries have been affected, but it will be negative across the board, so there are likely to be bankruptcies and job losses possibly at a massive scale. Most of these jobs will return eventually, assuming global trade resume. It's possible it doesn't resume at all, or only in part. Tourism is just fubar so I can't see how there won't be a complete collapse of each and every business in tourism. I'd say this sector is unlikely to recover in the next few years, if ever.
This economic destruction aside, NZ is the best placed country in the world for eradicating the virus entirely, and we may benefit from this long term in many ways. I've written previously about how I predict the NZ population will increase by orders of magnitude due to reduced impacts from climate change. Being the only country in the world to be covid free might be a huge drawcard to the million kiwis living overseas, and the rich who are prepared to pay big money for citizenship. There is discussion about selling citizenship to billionaires who are prepared to invest multi millions in businesses that create NZ jobs.
While there is universal agreement that the property market will collapse, I disagree. We still have a shortage in NZ, and regardless of the employment situation people still need somewhere to live. I expect that in Australia the 600,000 kiwis will lose their jobs, either naturally or by some executive decision to reserve jobs for Australian citizens. So I expect many of those 600,000 to return to NZ, and they too will need somewhere to live. They might not get employment here either, but at least they are safe from covid and get government assistance and free health care. These 600,000 might have a family, so we could be looking at an influx of several million, which would be a 50% increase in our population. Our infrastructure will not handle even a fraction of that, so many jobs will be created.
On the other hand, short term many will be unable to pay their mortgage, resulting in mortgagee sales. There will also be far less people able to secure a new mortgage, so prices are likely to take a swift sharp dive, followed by a slow steady recovery as jobs come back. The country is likely to be slowly unlocked by region, depending on new cases, so Auckland is likely to be the last place to get back to normal. In addition, it's likely that people will want more social distancing, meaning less of the city life and more of the country life. Also without jobs to draw people into the city, there won't be the demand for city living. This may result in lower demand for Auckland property and higher demand for satellite cities and towns. In my city of Whangarei, we are going to build a new port, and it's possible Whangarei booms for the next few decades, rivaling Auckland for business, especially in the import / export sector.
Remember, this is the damage likely in a country that will be covid free. How can other countries fare any better?
This economic destruction aside, NZ is the best placed country in the world for eradicating the virus entirely, and we may benefit from this long term in many ways. I've written previously about how I predict the NZ population will increase by orders of magnitude due to reduced impacts from climate change. Being the only country in the world to be covid free might be a huge drawcard to the million kiwis living overseas, and the rich who are prepared to pay big money for citizenship. There is discussion about selling citizenship to billionaires who are prepared to invest multi millions in businesses that create NZ jobs.
While there is universal agreement that the property market will collapse, I disagree. We still have a shortage in NZ, and regardless of the employment situation people still need somewhere to live. I expect that in Australia the 600,000 kiwis will lose their jobs, either naturally or by some executive decision to reserve jobs for Australian citizens. So I expect many of those 600,000 to return to NZ, and they too will need somewhere to live. They might not get employment here either, but at least they are safe from covid and get government assistance and free health care. These 600,000 might have a family, so we could be looking at an influx of several million, which would be a 50% increase in our population. Our infrastructure will not handle even a fraction of that, so many jobs will be created.
On the other hand, short term many will be unable to pay their mortgage, resulting in mortgagee sales. There will also be far less people able to secure a new mortgage, so prices are likely to take a swift sharp dive, followed by a slow steady recovery as jobs come back. The country is likely to be slowly unlocked by region, depending on new cases, so Auckland is likely to be the last place to get back to normal. In addition, it's likely that people will want more social distancing, meaning less of the city life and more of the country life. Also without jobs to draw people into the city, there won't be the demand for city living. This may result in lower demand for Auckland property and higher demand for satellite cities and towns. In my city of Whangarei, we are going to build a new port, and it's possible Whangarei booms for the next few decades, rivaling Auckland for business, especially in the import / export sector.
Remember, this is the damage likely in a country that will be covid free. How can other countries fare any better?
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