Podcast Appearances
So even only two to three weeks into this conflict, there's already people out there on the ground right now in certain countries
industries related to construction seeing those price increases coming through and and he said his part of his feedback was that you know very surprised about how quickly that had come through but if it's going to be indicative of other industries as well you know the reserve being here is definitely going to have to keep an eye on those second round price impacts because it might already be starting to flow through and this this person said well you know he might not necessarily be intending to pass those cost increases on to customers straight away you know there's this idea that
in a weak demand environment, perhaps firms have to just eat some of that cost and wear some of that cost for a start, but you can't do that forever.
And yes, you might like to do that at the start, but it may only be a matter of time until that has to be passed on.
So yeah, just a bit of an anecdote into, that's probably not going to apply in every industry, but just a bit of an anecdote there that in our construction industry,
we're already seeing that anecdotally start to flow through and definitely related to that that wider sort of so-called second round thing that I talked about where it's to do with transport cost increases you know that gets passed through that feeds into other industries so and that's what the Reserve Bank's really concerned about is that second round impact where it gets a bit more embedded and it's not just a sort of flash in the pan so um
Yeah, I don't know.
Have you heard anything around that that's going on in Australia?
Are people already thinking about those so-called second round effects passing at all?
Okay, gee, interesting chat.
I mean, we should probably sort of wrap it up, I think, but I guess I've been trying to think sort of rapidly how I sort of summarise that and how you come to a sort of end conclusion, I guess, in terms of the global economy, the differences and similarities between Australia and New Zealand.
And I suppose tying it into the housing market, it's sort of, we're obviously at different junctures, but
Coming from a different perspective as well in terms of our economy and like I say it doesn't necessarily look like we're going to see increases from our Reserve Bank in the near term so might give households a little bit more breathing room but we're already in a relatively soft housing market environment so that's sort of helping the Reserve Bank I guess there's definitely not any inflationary pressure coming from the housing market whereas you know you've already had a couple of rate hikes
that inflationary pressure coming through, the housing market's been a lot stronger, affordability more stretched, but maybe at a turning point.
Yeah, I suppose, you know, there's always going to be, sometimes we have to settle for murkiness, I guess, and it's just, I guess, going to be really interesting to see how both markets play out.
People have been speculating here that we might start to see a bit of an upturn in house prices this year.
Maybe now that just goes on the back burner a little bit because, of course, that confidence factor is going to be missing or at least being pegged back in this new environment.
Yeah, we'll have to see how it all plays out.
I guess as one final question, are you seeing what this uncertainty, this global risk, and especially the two official cash rate hikes already, is that starting to pass through to mortgage rates?
Are people seeing that in their borrowing costs already?