Tropical cyclone Urmil near Vanuatu, 28 February 2026Zoom Earth
Vanuatu’s national disaster management office has issued a red alert for TAFEA province as a tropical cyclone hovers near the province.
Tropical Cyclone Urmil formed southwest of Port Vila on Friday.
It has now been upgraded to a Category 2 according to the Fiji Meteorological Service.
“At 5am local time, 28 February, analysis put this cyclone at 20 degrees South, 169.9 degree East, and that is roughly south east of Tanna island in the TAFEA province,” according to the Vanuatu Meteorology and Geohazard Department’s Tropical Cyclone Supervisor, Jerry Timothy.
TAFEA province is made up of the islands of Tanna, Aneityum, Futuna, Erromango and Aniwa.
Timothy said the cyclone moved into the TAFEA province from the West, from the Western side of the island group, there.
“Most probably the first island, Erromango hasn’t that much of the cyclone, maybe to the west of the island, but Tanna, which is the island in the middle, the tropical cyclone came very close to the south of the island, moving to the south,” he said.
It said heavy rainfalls with flash flooding are expected over low lying areas and areas close to river banks, including coastal flooding over TAFEA today. Very rough seas with heavy to phenomenal swells are expected over the area mention above.
A marine strong wind warning is also current for central and southern waters of Vanuatu. High Seas wind warning is also current for all open waters of Vanuatu. People, including sea going vessels are advised to take precautions.
Jerry Timothy said people can expect wind gusts of up to 105km/h.
Communities on Tanna island were preparing for a night of heavy weather as Tropical cyclone Urmil passed close-by.
Mora Kapum of White Grass Ocean Resort in Lenakel told RNZ Pacific that there was heavy rain and strong winds last night, leading to some minor flooding.
She said there is no serious damage there but there is a lot of cleaning up today, and it’s still very windy.
Red alert
When a RED ALERT is issued, you need to stay in a safe shelter:
Stay tuned and informed through Radio, TV, SMS, or Internet
Turn off all gas and electricity and unplug all electrical items from the sockets
Stay in the strongest and safest part of your house or the evacuation centre and do not go outside
Stay away from doors and windows and keep them closed and locked
Remain indoors or in safe place and continue to listen to the radio and do not go outside until National Disaster Management Office issues the ‘ALL CLEAR’ after the Vanuatu Meteorology and Geohazard Department cancels the cyclone warning for your area.
Take care to avoid dangers caused by fallen powerlines, trees, damaged building and other debris
Support your family and neighbours especially the most vulnerable in your community
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
Tommy Te Puni races to a 100 metres behind Tiaan Whelpton at Sir Graeme Douglas International.David Rowland/Photosport
Two years have passed, but Tommy Te Puni finally has his name in the record books.
Last weekend, the Auckland speedster claimed the national 200 metres mark, when he tore around a bend – but not THE bend – at Christchurch’s Nga Puna Wai Sports Hub and crossed the finish line in 20.35s, slicing two-hundredths of a second off the previous standard.
“It means a lot,” he told RNZ. “Coming off a bit of bad luck and a lot of injuries, it’s pretty good to get one of those on the board.
“Being a New Zealand record, it’s special, not just for me, but for all the people who have supported me, like my family and especially my coach, who sets up all the programmes, and deals with the ups and downs just as much as me.
“I’m really happy, not just for myself, but for everyone else around me that have helped me along the way.”
In November 2023, Te Puni was the victim of a timing malfunction that some believe cost him the first sub-46-second 400m by a Kiwi male at a local club meet.
Since then, he has battled a variety of injuries that have stymied his hopes of ever reaching his potential – until now.
Ironically, one of those injuries seems to have played a part in his current run of form.
Te Puni, 23, broke his foot during a northern hemisphere campaign that included the World University Games in Germany, which delayed his return to the track until the new year.
Instead of running his best times before Christmas, then hitting a wall afterwards, he is only now reaching a peak at the business end of the season.
His performance at the International Track Meet came off the back of a series of quick times over the preceding month. A 10.36s 100m personal best at the Douglas International in Auckland was followed by a solid 10.40s/20.89s double into slight headwinds at Hamilton’s Porritt Classic.
“This was the first week I actually felt fresh,” he explained. “For me, it usually takes quite a few weeks to freshen up, so even leading into Porritt, I wasn’t really feeling that good.
“In New Zealand, it’s a big thing to run 20-point, but it didn’t feel that good. I was overstriding, and I didn’t feel that fresh, so we went back to the drawing board.”
Personal bests over 150m in training had him and coach Elena Brown believing something special was near.
“We were thinking high 20.4s was what I was showing, so 20.35 was a pleasant surprise.”
Te Puni tuned up for his record run with a wind-assisted 10.26s 100m, although wind readings only told half the story. While winner Tiaan Whelpton clocked 10.01s with a 4.9m/s tailwind, four minutes before, the women supposedly ran into a 3.4m/s headwind.
In reality, the wind was a swirling side, so meet organisers switched the 200m start to take advantage of conditions around the bend. Three years ago, they did the same for Rosie Elliott, when she clocked a 22.81s national women’s record.
The maximum allowable tailwind for record purposes is 2.0 m/s. Te Puni’s 200m wind was 1.2 m/s.
“It’s a northwesterly, a true tailwind around the bend, but not helping you too much down the straight,” he said. “You come off the curve, you slingshot and just hold that momentum through to the finish line.
“The wind is coming from a direction that it doesn’t fully hit the wind metre, which is really good.”
Te Puni’s achievement sets up the unique prospect of all three men’s sprint records falling in the same season.
Whelpton has now gone under the 100m standard twice with excessive winds, while clocking 10.10s – 0.02s outside the national mark – legally. He only needs the right wind to break the record and possibly crack 10 seconds.
Last season, Lex Revell-Lewis broke 46 seconds for the 400m (45.88s) and showed he was capable of faster still, when he clocked 10.36w/20.49s at Christchurch.
Six runners beat 10.50s over 100m at the ITM, albeit wind-assisted. In seventh, 14-year-old Vern Toaloamai-Holden recorded 10.67s.
Four runners beat 21.00 seconds over 200 metres, another slice of NZ sprinting history.
Why is NZ sprinting enjoying a resurgence?
“It’s a good question,” Te Puni mused. “I think it’s just a question of timing, when everyone’s around a similar point, but you also have trailblazers like Tiaan, trying to get that 9.99s.
“It’s inspiring for people, and you want to chase those top guys. When I ran the 200m, they’re all chasing me, but it’s not like there’s someone who’s clear and above everyone else that you lose motivation.
“There’s a bit of luck with the depth, and everyone wants to beat each other.”
For their part, meet organisers have done their best to provide optimal conditions for performances.
“I’m sure all athletes will agree with me, but when you turn up to a race and there’s no hope of them flipping the track, and you have to run into a three-metre headwind… that’s not much fun.
“If they flip the track and the wind’s blowing at three, but I might get lucky, and get a 1.5 and new PB (personal best). Psychologically, that just gets you more amped up to race.
“They did it at Cooks [Whanganui], they did it at Sir Graeme [Douglas International], they did it at Christchurch… I’m pretty sure they’ll do it for the 100s and hopefully 200s at nationals.”
A community initiative to promote national relay teams has also created a collective approach to what was previously an individual sport, while fostering competition within the squad.
Early attempts at a men’s 4x100m record have seen Te Puni miss out on the top foursome, but current form may force a selection rethink.
“It gives a lot of athletes more opportunity to potentially get onto that world stage, but it also ties into wanting to be in that team and getting that spot,” he said. “The relays elevate the competition, because you don’t want that guy or that girl to get your spot, so you want to perform the best you can.”
Te Puni hasn’t contested the 400m this summer, but wouldn’t rule out another shot at that record in the future.
.
“We’re trying to work out where to get one in, but because I only really started running at the start of this month, there wasn’t really time to fit in a 400,” he said. “We were thinking about Sir Graeme Douglas, but stuck with the short sprints, because that was where my shape was at the moment.
“We’re keen to get one in March maybe. I’m not sure, but it would be nice to run another one, because my speed is at an all-time high at the moment and that typically bodes well for a quick 400.
“At the moment, it’s just 200, especially with nationals.”
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
The Hurricanes are looking to make it two from two against Pacific teams, as they head to Lautoka to play the Fijian Drua on Saturday afternoon.
Callum Harkin will start at first-five for the Wellington-based outfit, while the Drua are still chasing their first win of the Super Rugby Pacific season.
Anaru Morunga is on trial for the alleged murder of his ex-partner and the mother of his two children, Jasmaine Reihana.NZME/SUPPLED
Warning: This article discusses graphic violence and may be upsetting to some readers.
After two weeks of silence, the defence in a murder trial finally rose and shifted the focus from the brutality of an alleged act to the question of the accused’s state of mind.
As Anaru Morunga’s trial nears its end, today marked the first moment defence lawyer Arthur Fairley addressed the jury and reframed the case.
“We’re dealing with this man’s mind. Not your mind, not my mind … it’s what this man’s mind thinks,” Fairley said in his closing statement.
Morunga has been on trial in the High Court at Whangārei on eight charges, including murder, related to events surrounding the death of his ex-partner, 35-year-old Jasmaine Reihana.
The couple had two children together but separated in 2018. It was unclear what the status of their relationship was at the time of her death on 8 September, 2024, after they had attended a tangi together in Ōtorohanga.
For 10 days, the jury has heard evidence from multiple Crown witnesses, including forensic experts and police officers, about events that occurred across the days leading up to Reihana’s death.
The Crown alleges Morunga murdered Reihana by stabbing her at the Pouto peninsula home in Northland that he shared with his mother, Suzanne Morunga, and her partner Michael Jones.
He is also accused of arson after allegedly setting Reihana’s car alight with her body inside at the far end of the Ripirō Beach farm, before fleeing and leading police on a State Highway 12 chase that ended with his arrest near the Brynderwyn Hills.
Today, he changed his plea on two of the eight charges he has been defending, admitting charges related to unlawfully taking a tractor and quad bike owned by his boss, Chris Biddles.
On the other charges, Morunga has repeatedly acknowledged killing Reihana, telling police he cut her throat before placing her body in her car and towing it to the beach by tractor. He continues to deny that he was the one who set the vehicle alight.
That admission has not only been heard by the jury through his evidential interview with police played in court, but also when he chose to take the stand yesterday.
“I just walked over to her, grabbed her, pulled the knife out and cut her throat,” he said in his police interview recorded in September 2024.
But when he gave close to four hours of evidence yesterday, his narrative changed.
He claimed Reihana had a gun and he had to kill her to protect his family.
“I pulled, she pulled, I won,” he testified.
He then demonstrated for the court how he cut Reihana’s neck.
In Crown closings, prosecutor Bernadette O’Connor told the jury Morunga was making things up to fit the evidence that had been presented.
“Folding up the paper napkin so it resembled a knife. Not something he was asked to do, something he did of his own volition to demonstrate how he killed Ms Reihana,” O’Connor said.
“Claiming he didn’t mean for her to die. I submit that flies in the face of the evidence and flies in the face of common sense.
“He meant to kill her.”
O’Connor said there were eight pages of transcript of Morunga detailing the slaying, even saying he was good with knives and trained to kill animals humanely.
“He didn’t seem to afford that humane killing to Jasmaine Reihana,” O’Connor said.
She said the new story about a gun being present was “simply not true”.
“When I pointed out he has never mentioned it, he said ‘I was a very broken man then’,” O’Connor said.
“A broken man? Or a man who was relaxed, enjoying his moment in the spotlight?”
O’Connor said Morunga had made a “fantastical story” that Reihana was having an affair, she was going to kill his family and sell his children to the Mongrel Mob.
“He will come up with anything that he can to get away with murder.”
O’Connor said he was high on methamphetamine, and being under the influence of drugs was not a defence to murder.
“The fault for her murder lies solely and squarely at the feet of Anaru Morunga.”
During the trial, Morunga’s lawyer, Arthur Fairley, did not cross-examine many witnesses and did not give an opening statement to the jury.
Today, in his closing address to the jury, he began by acknowledging the overwhelming evidence presented at the trial.
“I would suggest to you, members of the jury, there wouldn’t be a heart in this room that wouldn’t be tugged by that,” Fairley said.
“But in this room, in a trial like this, we’re not allowed to have our hearts tugged.”
Fairley said the key issue for determining the murder charge relied on establishing Morunga’s intent.
“The facts are, none of us were there,” Fairley submitted.
“He made some remarkable concessions for a man in a murder trial.
“Here’s the point. You might think the mind we’re dealing with at the material time had an imaginative grip of reality. But that’s the quality of the mind that has to be taken into account.”
Fairley submitted that Morunga had not uttered that he was going to kill Reihana before, during or after the act and therefore did not have murderous intent.
“Isolate what the issues are and try to give some analysis,” Morunga said.
“On the murder, they can’t make you sure what was in this man’s head at the material time.
“If they can’t make you sure, he’s not guilty of murder; it’s manslaughter.”
The jury was released for the weekend and will return on Monday for Justice David Johnstone’s summation of the case.
‘That’s Not A Knife’ on the launch pad at LC-2.Supplied / Rocket Lab
New Zealand-founded company Rocket Lab has successfully launched its latest space mission for the US Department of War.
The HASTE rocket, called ‘That’s Not A Knife’, lifted off from Wallops Island in Virginia in the US at 1pm on Saturday (NZ time) from Launch Complex 2 at the Mid-Atlantic Regional Spaceport.
It was Rocket Lab’s second successful launch of a hypersonic test mission for the US Department of War’s Defense Innovation Unit, and the seventh HASTE rocket launch overall. Rocket Lab said all HASTE missions to date have achieved 100 percent success.
The launch was the company’s third of the year and its 82nd overall.
HASTE stands for hypersonic accelerator suborbital test electron, and is a suborbital testbed launch vehicle.
Suborbital missions enter space but don’t stay there.
The mission deployed DART AE, a scramjet-powered aircraft developed by Australian aerospace engineering firm Hypersonix, into a suborbital hypersonic flight environment at several times the speed of sound.
‘That’s Not A Knife’ mission payload.Supplied / Rocket Lab
Rocket Lab said the work was supporting a critical national priority to advance hypersonic technology for the United States and its allies.
Rocket Lab’s vice president of global launch services, Brian Rogers, said the launch was another proud moment for the HASTE team and a great showcase of the important commercial platform it has become for the Department of War.
‘That’s Not A Knife’ on the launch pad at LC-2.Supplied / Rocket Lab
“Regular and reliable HASTE launches are helping to accelerate hypersonic readiness for the nation, and we take pride in providing the foundation to a new era of testing of this critical technology to protect the United States space security,” said Rogers.
Hypersonix chief executive Matt Hill said successfully flying DART AE in a real hypersonic environment marked a major milestone for the company’s flight test programme and moved it closer to delivering reusable hypersonic capability.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
Most forecasts expect house prices to rise less than 5 percent this year.RNZ / REECE BAKER
New Zealand’s economy is expected to continue to slowly recover this year.
But unlike previous recoveries, this time, it’s not likely to be dragged up by rising house prices. Most forecasts are for prices to rise less than 5 percent this year – and some forecasters expect half that.
Michael Gordon, a senior economist at Westpac, has issued a new report looking at whether the economy can have a sustained recovery without help from rising house prices making people feel wealthier.
He said he had encountered scepticism about whether it was possible. But he said, in part, it was already happening.
“Retail spending has consistently risen over the last five quarters, at a time when house prices were effectively flat. But it’s not certain that this can be maintained in the face of what are some still-subdued house price expectations for the year ahead.
“The recent economic literature points to a solution. There is growing support for the idea that what we observe as a ‘housing wealth effect’ is actually more of an income expectations effect, driving both spending and house prices higher.”
He said it had been clear in the past that when house prices were rising, people tended to be more willing to spend because they felt their house was “doing the saving for them”.
“We’ve noted in the past that there has historically been a strong relationship between housing wealth and household spending in New Zealand, and arguably stronger here than in other developed economies. But the relationship doesn’t hold all of the time, and especially not in more recent years, as Covid and the subsequent policy responses have led to significant volatility in both house prices and consumption.”
He said even in the absence of house prices lifting in many parts of the country, lower interest rates were having a difference in the economy. Retail sales volumes rose 0.9 percent in December, more than had been expected.
He said there was growing evidence that when people expected their incomes to rise in future they tended to both spend more money and to push house prices higher.
“The magnitude of the effect on house prices will depend on how responsive the supply side is – historically New Zealand’s housing supply has been fairly unresponsive, but there are signs that this is improving.
“All of this is not to say that housing wealth effects don’t exist. But their impact may be in amplifying the economic cycle, rather than being an essential driver of it. We feel that our household spending forecasts have been suitably tempered to match our view on house prices – spending growth of 3 percent to 4 percent over the year ahead is quite achievable in the early stages of a recovery, when the economy still has substantial spare capacity to be used up.”
Shamubeel Eaqub.Supplied
Simplicity chief economist Shamubeel Eaqub said there had been regions that had experienced economic growth without house price growth.
“It’s true that we are very reliant on that channel to supercharge everything … the residential property mortgage market is such a big source of capital into any kind of investments that we make. If house prices are not increasing, we just have less capital to invest. And that’s including in businesses.
“That long tail of small businesses quite often relies on borrowing against the mortgage to be able to grow their businesses. That can be one of the constraints. It absolutely doesn’t go away but does it mean we can’t have any growth without it? I don’t think so. Does it mean we might have less growth or a less rapid recovery to a more dynamic state? Very likely.”
He said there had been economic growth before house prices boomed, and some of it was very strong.
“In fact, quite a lot of the economic growth we might have had post 2000 you might argue wasn’t actually very good quality… when I look at history and I look at our regions, there are periods of history where we’ve had economic growth without house prices running away from incomes. We’ve had economic growth in our provinces that haven’t always experienced high house prices.”
He said much of the downturn had been driven by the drop in disposable income available to households as the price of essentials rose.
But there is also a whole bunch of pent up demand to do things, whether it’s to do work on your homes, to replace things, replace the car, invest in your business, whatever. People have had plans that have been postponed. Recessions tend to be less about things being killed and more about things being postponed.
“The maintenance still has to be done. The expansion will still happen if you think the customers are there. And it’s that chicken and egg. What comes first? Certainly, I think right now what we’re seeing is there’s quite a lot of growth in the provinces… we’ve had pretty good news for sheep and beef farmers as well. When was the last time that happened?
“Wool prices have been pretty good this season so far. Dairy prices plus the payout from selling off our brands businesses. There’s a fair bit of money that’s going to be floating around. I think that might act as a bit of a catalyst. And of course, that reduction in interest rates.
“The big thing that’s going to be the catalyst here, I think, is whether or not banks are out lending. That’s probably the biggest unknown… not just for the price but the quantity of credit. It’s essential debt that supercharges the cycle.”
He said even though it felt like a grinding recession, some people were doing fine.
“It’s not like everybody is experiencing this equally. I think there is a risk in thinking that’s the case. There will be some people who have been waiting to make investments. They have the resources, they have the capital. They have the plans. They might decide now is a good time to make those investments.”
Most forecasts expect house prices to rise less than 5 percent this year.RNZ / REECE BAKER
New Zealand’s economy is expected to continue to slowly recover this year.
But unlike previous recoveries, this time, it’s not likely to be dragged up by rising house prices. Most forecasts are for prices to rise less than 5 percent this year – and some forecasters expect half that.
Michael Gordon, a senior economist at Westpac, has issued a new report looking at whether the economy can have a sustained recovery without help from rising house prices making people feel wealthier.
He said he had encountered scepticism about whether it was possible. But he said, in part, it was already happening.
“Retail spending has consistently risen over the last five quarters, at a time when house prices were effectively flat. But it’s not certain that this can be maintained in the face of what are some still-subdued house price expectations for the year ahead.
“The recent economic literature points to a solution. There is growing support for the idea that what we observe as a ‘housing wealth effect’ is actually more of an income expectations effect, driving both spending and house prices higher.”
He said it had been clear in the past that when house prices were rising, people tended to be more willing to spend because they felt their house was “doing the saving for them”.
“We’ve noted in the past that there has historically been a strong relationship between housing wealth and household spending in New Zealand, and arguably stronger here than in other developed economies. But the relationship doesn’t hold all of the time, and especially not in more recent years, as Covid and the subsequent policy responses have led to significant volatility in both house prices and consumption.”
He said even in the absence of house prices lifting in many parts of the country, lower interest rates were having a difference in the economy. Retail sales volumes rose 0.9 percent in December, more than had been expected.
He said there was growing evidence that when people expected their incomes to rise in future they tended to both spend more money and to push house prices higher.
“The magnitude of the effect on house prices will depend on how responsive the supply side is – historically New Zealand’s housing supply has been fairly unresponsive, but there are signs that this is improving.
“All of this is not to say that housing wealth effects don’t exist. But their impact may be in amplifying the economic cycle, rather than being an essential driver of it. We feel that our household spending forecasts have been suitably tempered to match our view on house prices – spending growth of 3 percent to 4 percent over the year ahead is quite achievable in the early stages of a recovery, when the economy still has substantial spare capacity to be used up.”
Shamubeel Eaqub.Supplied
Simplicity chief economist Shamubeel Eaqub said there had been regions that had experienced economic growth without house price growth.
“It’s true that we are very reliant on that channel to supercharge everything … the residential property mortgage market is such a big source of capital into any kind of investments that we make. If house prices are not increasing, we just have less capital to invest. And that’s including in businesses.
“That long tail of small businesses quite often relies on borrowing against the mortgage to be able to grow their businesses. That can be one of the constraints. It absolutely doesn’t go away but does it mean we can’t have any growth without it? I don’t think so. Does it mean we might have less growth or a less rapid recovery to a more dynamic state? Very likely.”
He said there had been economic growth before house prices boomed, and some of it was very strong.
“In fact, quite a lot of the economic growth we might have had post 2000 you might argue wasn’t actually very good quality… when I look at history and I look at our regions, there are periods of history where we’ve had economic growth without house prices running away from incomes. We’ve had economic growth in our provinces that haven’t always experienced high house prices.”
He said much of the downturn had been driven by the drop in disposable income available to households as the price of essentials rose.
But there is also a whole bunch of pent up demand to do things, whether it’s to do work on your homes, to replace things, replace the car, invest in your business, whatever. People have had plans that have been postponed. Recessions tend to be less about things being killed and more about things being postponed.
“The maintenance still has to be done. The expansion will still happen if you think the customers are there. And it’s that chicken and egg. What comes first? Certainly, I think right now what we’re seeing is there’s quite a lot of growth in the provinces… we’ve had pretty good news for sheep and beef farmers as well. When was the last time that happened?
“Wool prices have been pretty good this season so far. Dairy prices plus the payout from selling off our brands businesses. There’s a fair bit of money that’s going to be floating around. I think that might act as a bit of a catalyst. And of course, that reduction in interest rates.
“The big thing that’s going to be the catalyst here, I think, is whether or not banks are out lending. That’s probably the biggest unknown… not just for the price but the quantity of credit. It’s essential debt that supercharges the cycle.”
He said even though it felt like a grinding recession, some people were doing fine.
“It’s not like everybody is experiencing this equally. I think there is a risk in thinking that’s the case. There will be some people who have been waiting to make investments. They have the resources, they have the capital. They have the plans. They might decide now is a good time to make those investments.”
Most forecasts expect house prices to rise less than 5 percent this year.RNZ / REECE BAKER
New Zealand’s economy is expected to continue to slowly recover this year.
But unlike previous recoveries, this time, it’s not likely to be dragged up by rising house prices. Most forecasts are for prices to rise less than 5 percent this year – and some forecasters expect half that.
Michael Gordon, a senior economist at Westpac, has issued a new report looking at whether the economy can have a sustained recovery without help from rising house prices making people feel wealthier.
He said he had encountered scepticism about whether it was possible. But he said, in part, it was already happening.
“Retail spending has consistently risen over the last five quarters, at a time when house prices were effectively flat. But it’s not certain that this can be maintained in the face of what are some still-subdued house price expectations for the year ahead.
“The recent economic literature points to a solution. There is growing support for the idea that what we observe as a ‘housing wealth effect’ is actually more of an income expectations effect, driving both spending and house prices higher.”
He said it had been clear in the past that when house prices were rising, people tended to be more willing to spend because they felt their house was “doing the saving for them”.
“We’ve noted in the past that there has historically been a strong relationship between housing wealth and household spending in New Zealand, and arguably stronger here than in other developed economies. But the relationship doesn’t hold all of the time, and especially not in more recent years, as Covid and the subsequent policy responses have led to significant volatility in both house prices and consumption.”
He said even in the absence of house prices lifting in many parts of the country, lower interest rates were having a difference in the economy. Retail sales volumes rose 0.9 percent in December, more than had been expected.
He said there was growing evidence that when people expected their incomes to rise in future they tended to both spend more money and to push house prices higher.
“The magnitude of the effect on house prices will depend on how responsive the supply side is – historically New Zealand’s housing supply has been fairly unresponsive, but there are signs that this is improving.
“All of this is not to say that housing wealth effects don’t exist. But their impact may be in amplifying the economic cycle, rather than being an essential driver of it. We feel that our household spending forecasts have been suitably tempered to match our view on house prices – spending growth of 3 percent to 4 percent over the year ahead is quite achievable in the early stages of a recovery, when the economy still has substantial spare capacity to be used up.”
Shamubeel Eaqub.Supplied
Simplicity chief economist Shamubeel Eaqub said there had been regions that had experienced economic growth without house price growth.
“It’s true that we are very reliant on that channel to supercharge everything … the residential property mortgage market is such a big source of capital into any kind of investments that we make. If house prices are not increasing, we just have less capital to invest. And that’s including in businesses.
“That long tail of small businesses quite often relies on borrowing against the mortgage to be able to grow their businesses. That can be one of the constraints. It absolutely doesn’t go away but does it mean we can’t have any growth without it? I don’t think so. Does it mean we might have less growth or a less rapid recovery to a more dynamic state? Very likely.”
He said there had been economic growth before house prices boomed, and some of it was very strong.
“In fact, quite a lot of the economic growth we might have had post 2000 you might argue wasn’t actually very good quality… when I look at history and I look at our regions, there are periods of history where we’ve had economic growth without house prices running away from incomes. We’ve had economic growth in our provinces that haven’t always experienced high house prices.”
He said much of the downturn had been driven by the drop in disposable income available to households as the price of essentials rose.
But there is also a whole bunch of pent up demand to do things, whether it’s to do work on your homes, to replace things, replace the car, invest in your business, whatever. People have had plans that have been postponed. Recessions tend to be less about things being killed and more about things being postponed.
“The maintenance still has to be done. The expansion will still happen if you think the customers are there. And it’s that chicken and egg. What comes first? Certainly, I think right now what we’re seeing is there’s quite a lot of growth in the provinces… we’ve had pretty good news for sheep and beef farmers as well. When was the last time that happened?
“Wool prices have been pretty good this season so far. Dairy prices plus the payout from selling off our brands businesses. There’s a fair bit of money that’s going to be floating around. I think that might act as a bit of a catalyst. And of course, that reduction in interest rates.
“The big thing that’s going to be the catalyst here, I think, is whether or not banks are out lending. That’s probably the biggest unknown… not just for the price but the quantity of credit. It’s essential debt that supercharges the cycle.”
He said even though it felt like a grinding recession, some people were doing fine.
“It’s not like everybody is experiencing this equally. I think there is a risk in thinking that’s the case. There will be some people who have been waiting to make investments. They have the resources, they have the capital. They have the plans. They might decide now is a good time to make those investments.”
Outside the central Auckland Library on Lorne Street.RNZ / Lucy Xia
A 65-year-old man has appeared in court over a serious stabbing in Auckland’s CBD on Friday night.
Police confirmed the incident occured in the area in front of the Auckland Central City Library, and a knife was recovered at the scene. One person was left with critical injuries and another seriously hurt.
Detective Senior Sergeant Ash Matthews had said emergency crews were called to Lorne Street about 10.20pm where a knife had been recovered and the man was arrested by responding staff.
The man was facing two charges of causing grievous bodily harm.
He appeared at the Auckland District Court in a blue boiler suit shortly after midday on Saturday. No pleas were entered and the man was remanded in custody.
He was granted interim name suppression.
Cordons were in place overnight in the area in front of the library entrance, but had been lifted by midday Saturday.
Police said a scene examination was conducted on Saturday morning.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
American musician Neil Sedaka, who had a string of chart-topping hits in the 1960s and 1970s with songs like ‘Laughter in the Rain’, has died at age 86, his family said Friday.
Over a career spanning six decades, Sedaka scored three number-one hits in the United States and also wrote chart-topping songs for other artists.
“Our family is devastated by the sudden passing of our beloved husband, father and grandfather,” Sedaka’s family posted on his Facebook page, describing the late artist as a “true rock and roll legend.”
Born in New York, Sedaka’s musical career began in the late 1950s. One of his first successes was writing ‘Stupid Cupid’ for one of the era’s most popular US female vocalists, Connie Francis.
Sedaka, an accomplished pianist, became a star in his own right in the early 1960s, with pop hits including ‘Breaking Up Is Hard To Do’.
His popularity faded in the second half of the 1960s as bands like The Beatles came into fashion, but it revived in the 1970s with easy-listening favourites like ‘Laughter in the Rain’ and ‘Bad Blood’.
Sedaka’s ‘Love Will Keep Us Together’ became a number one hit for the husband-and-wife recording duo Captain & Tennille in 1975.
Sedaka had dropped out of the charts by the 1980s. He remained a showbiz fixture and kept performing even as commercial successes waned.
No cause of death was given.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand