Experts predicted a big fall in home spending following the Covid-19 outbreak. They were wrong. Economist Tony Alexander explains why they got it wrong and why the outlook is brighter than originally thought – especially for those whose profession is focused on improving homes
Earlier this year, when we could see our economy being thrown into recession by the fight against Covid-19, we economists ‘knew‘ what this would mean. We expected interest rates to fall, and they have. We expected the NZ dollar to decline and it did – by almost ten cents for a while. We expected retail spending to fall away and it most definitely did.
We also expected easing house prices, a sustained 40% fall in real estate sales, weak sales of furniture and home out-fittings, and rapidly falling numbers of consents being issued for new houses to be built. We got that completely wrong.