Mortgage industry given reassuring words on coming recession

The comments came from the independent economist Cameron Bagrie, speaking to a webinar put on by the brokers lobby group, Financial Advice New Zealand.

A recession has been forecast by a range of groups including the Reserve Bank and is now seen as virtually inevitable.

It comes as advisers face higher costs due to ever more onerous compliance obligations at a time when the real estate market is shrinking.

Combined, these two things mean a recession is the last thing they need.

But Bagrie had some words of comfort for them, saying the recession would come from a high base.

“Recessions involve change, things heading backwards,” he said.

“But for a lot of economies, things have been so damned good, we are so up in the success line, that if we pull back a little bit, it might satisfy the technical definition of a recession, but I characterise it as something less good rather than absolutely bad.”

Bagrie said levels count, and things had been so good for the past few years, that a pull-back might tick the box and qualify as a recession, but real economic conditions would still be good for a lot of businesses.

In his talk, Cameron also questioned the quality of state rulemaking, citing the Credit Contracts and Consumer Finance Act (CCCFA) as an example.