Economist Shamubeel Eaqub says the new Government doesn't necessarily mean the financial pain will ease for everyone.
Eaqub joined Newshub Nation on Sunday morning to unpack what National's election win could mean for the housing market and the wider economy.
"People are sort of hoping somehow they're going to get this relief because of a change of Government, but that's not what happens," he told co-host Rebecca Wright.
"The cost of living is really affected by what's happening globally, because of the synchronised global inflation shock, and what the Reserve Bank does."
Eaqub said the longer interest rates stay at high levels, "that means we're going to be hurting for a lot longer".
What kind of economy does the new govt inherit?
A possible National - ACT - NZ First coalition Government will inherit a "very much a mixed bag" economy, Eaqub said.
"They're inheriting - I think - dark clouds, but starting from as good a position as possible with low unemployment and lots of businesses, all wondering what's going to happen next."
The International Monetary Fund's (IMF) latest report predicts GDP growth in Aotearoa will drop marginally from 1.1 percent currently to 1.0 next year.
Eaqub said consumer and business confidence is low, "but the economy is still chugging on, we've still got more jobs, we've got more businesses being started".
Unemployment is at 3.6 percent, and annual inflation is 6.0 percent as of August, with new inflation data out next week.
"I expect the Reserve Bank will maintain interest rates where they are for quite some time, because they're not confident that inflation is going to come off soon enough."
The incoming Government also has to deal with annual net migration hitting a record high in October, rising above 100,000 for the first time.
Migrant arrivals totalled 225,000, while 115,000 departed.
Eaqub said the record-high number is a double-edged sword.
"It's great that we can fill vacancies, and the economy looks good, but we don't have enough roads, houses, nurses, doctors."
He's also concerned we are losing too many Kiwis overseas.
What about the housing market?
In terms of the housing market, Eaqub said demand is likely to increase "at the margin" due to easing pressure on investors and the return of foreign buyers.
That's despite the high cost of borrowing money due to high interest rates.
"Also, the National Party moving away from some of the housing supply rules means we're going to be building less houses."
That means we'll likely see "house prices going up".
Eaqub said only "some groups will be better off" under National's policies.
"People getting bigger tax cuts will have more money in their bank account. Parts of the economy, like in real estate, will be feeling quite chipper."
And that's indeed the case - as property investor Steve Goodey told Stuff he was a "very happy camper" upon hearing National had won the election on Saturday.
"All my investments and all my business is in property," he said.
Both National and ACT pledged to reinstate tax breaks to property investors - by allowing mortgage interest deductibility and reducing the bright-line test.
Another property investor, Michael Burge, told Stuff he "will look to purchase more" after the win.
"Everyone involved in real estate is very happy at the moment."
Kelvin Davidson, CoreLogic's chief property economist, said National's policies will likely lead to higher house prices.
"But it won't change stretched affordability, high mortgage rates, and possible debt-to-income ratios next year."
Davidson said house prices will potentially rise if the new Government backpedals on Resource Management Act reform and pushes for less development of brownfield land with more intensified housing.
Infometrics chief economist Brad Olsen said interest rates had more influence on house prices than any Government policy.
The other big structural issues
Eaqub said many polls showed the public was worried more about the cost of living rather than the big long-term issues.
"So it's been very kind of short-term focused [this election]."
Eaqub said there hasn't been much talk of "unsexy" issues like competition, our ageing population, or productivity.
"How are you going to drive the engine of the New Zealand economy?"
The Government and councils agreed to bail out property owners in Tāmaki Makaurau and Te Matau a Māui / Hawke's Bay, following the Anniversary Day floods and Cyclone Gabrielle.
Eaqub called the ad hoc bail-outs to those natural disasters "stupid".
He said future Governments can't keep doing that.
"We don't have a lot of fiscal headroom. Every time there's a crisis we borrow money and we try and deal with it that way. But you can't keep doing it.
"Especially when our population is ageing and most of our taxes are paid by young people."
Eaqub urged the incoming Government to work on big, structural economic policies.
"I want to see what that plan is, because so far we haven't seen it."
Watch the full interview above.
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