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Productivity is actually falling. What's happened is that a record number of migrants came in after the fastest rate rises in the country's history, into a historic housing shortage. Competition for rentals (1% vacancy rates in many areas, sometimes lower) has kept the rental yield high, which has in turn buoyed housing prices despite the increase in interest rates. In addition to this, migration and tightening credit are both depressing wages after a short burst of growth during COVID. A big part of this is that work restrictions for student visas have been lifted, which means a flood of full-time cheap labour for those who only use the student visa to gain entry into the country. All of this in a country with a significant money laundering problem in real estate, that has been known about for more than twenty years, and a government that has zero interest in investigating the issue, because 60% of the population either own a home outright, or have a mortgage.

Inflation has started increasing again because the cost of housing is included in the CPI, and government price controls on energy (enacted during COVID) are coming to an end. This likely means more rate rises are on the way, at a time when we're seeing a significant decline in per capita GDP.