1. NZ’s major structural economic weakness is its heavy load of foreign debt. This is mainly private sector debt, and much of it is attributable to banks having to go offshore to fund mortgage loans into what remains one of the world’s most grossly overvalued real estate markets (relative to earnings). Whilst the Treasury can’t seem to summon enough nerve to bight the bullet, the bravest step it could take to protect the nation’s long-term economic health would be to eliminate real estate’s privileged tax position in order to reduce the private sector’s debt load and redirect savings to more productive purposes.

2. As for Kiwis investing in the US. Sure, there might be some very long-term opportunities. However, there is a need to be realistic about what is going on: first, demographics (ageing boomers wanting to downsize and monetize what’s left of their real estate ‘investment’ to fund retirement) will sit heavily on medium- and high-end property for years; second, property as an investment has benefited inordinately (worldwide) from a credit expansion which began in the early 1980s and went parabolic after the turn of the century – and it isn’t coming back any time soon, which will place a heavy burden on properties in all price ranges. The world has changed immeasurably in the last two years. Beware of trying to catch a falling knife and, at the very least, ask why so few cashed-up Americans (of whom there are still a lot) are rushing back in. Probably because there’s a lot more pain to come, certainly in the bubble states.