Chicken Little – Sky ain’t about to fall (ANZ)

The “bubble” is not about to burst, and we don’t find “Chicken Little” style commentary useful – say ANZ’s Morning Brief authors.

“That said, New Zealand is facing challenges, as we have highlighted many times before, and with euphoria sky high according to both business and consumer confidence surveys, it’s perhaps timely to remind readers of that. New Zealand is navigating a potent combination of legacy issues from the last business cycle (a weak balance sheet and high debt levels) and opportunity (high commodity prices and growing exposure to Asia) – while addressing a fairly urgent and demanding to-do list in terms of housing shortages and a city rebuild along the way.

It’s an outlook fraught with tensions and frictions, and a bun-fight for resources.

Net immigration is set to touch a decade high.