Hi there!
Here we are 1/3 of the way through the year already and instead of settling down into old familiar rhythms, our clients and the team at Building on Basics are finding that the pace seems to be steadily increasing. The property market continues to operate at speed and the Government is rolling out major initiatives that are creating opportunities and uncertainty in equal measure.
Accountants have been busy finalising accounts for the 19-20 Tax year, helping people and businesses affected by Covid-19 and then dealing with the changes to the bright line tests and the interest deductibility and how this will affect their clients.
Ever since Covid-19 was declared to be at pandemic level, economists and politicians have been struggling to come to terms with predictions of what is to come and how to best combat the effects.
It has taken bold initiatives such as lockdowns and massive stimulus packages to get us to where we are today. It seems that change is now the major constant, and we all need to deal with a bit of uncertainty and to continue to respond to changing situations.
With so many new rules that you may not be fully aware of, seeking advice from the various experts involved in your business and in your life has never been more important. Making mistakes due to not understanding the new rules and regulations could have devastating consequences financially if you do not seek the appropriate expert advice.
It may appear that the days of the mum and dad investors is over, but this is only true if they do not seek good council when making financial decisions.
The new Financial Advisers Act has put a greater emphasis on Financial Advisers ensuring that their clients can show an understanding of their decisions, and with this comes more paperwork for Financial Advisers to prove the understanding. As a result of that, you will be noting some new documents as we continue to support you with your financial goals.
Please be patient with us as we continue to “bed in” our new systems which are here to provide us with the tools to improve our service and ability to support you all.
As part of our commitment to looking after you and providing financial understanding we do regular blogs on topics of the day or about aspects of financial products, such as credit cards and loan types. If there is a subject that you would like us to cover let us know!
KiwiSaver
A reminder that from July 1 2021, the default KiwiSaver fund will change from a conservative to a balanced fund. If you haven’t chosen which fund holds your money or how it’s invested, we urge you to do so! We can talk you through your options, it’s a good idea to review your KiwiSaver regularly.
If you are looking to buy a first home or retire in the not-too-distant future, you will want to be sure that you are making the most of your KiwiSaver.
If your income has changed you should check that you are on the correct PIR rate.
It’s now just 2 months until you need to have put the full $1042.86 into your KiwiSaver account to get the full government contribution of $521.43.
As always, we are happy to help you check whether you are on track to get the full contribution. Get in touch with us if you want assistance with your KiwiSaver!
Property Market
A week or so ago we blogged about the property market in Otautahi Christchurch – over 50% more house sales than the same time last year, and the median house price is now over $600,000. It’s the same story around the country, with the national median price reaching $826,300 in March.
So what’s happening since the 23rd March announcements? Are real estate agents and lawyers seeing measurable differences in the property market? According to Tony Alexander’s survey there has been a bit of a drop in investors and first home buyers looking for mortgage advise.
Interestingly, this is not the case for us at Building on Basics. We are still seeing lots of interest from investors and a steady flow of First Home Buyers. Early days!
Banks and Finance
Bank turn-around times continue to be slow due to the huge volume of requests and Valuers are also struggling to keep up with the demand. The banks are wary of the new tax changes and the impact this will have on investors, and with the long term interest rates beginning to move we note that the banks are looking even more closely at income servicing.
If you are sure you are intending to hold onto your property for at least another 5 years then consider locking in the cheap rates while they are still available.
Get your ducks in a line if you are planning to get finance! Email us to make an appointment or use the Calendly booking button at the bottom of the page – we are happy to discuss your situation and make a plan with you.
RBNZ
The OCR stayed the same at the latest announcement, and many of the banks are looking to begin to increase the long term interest rates. ANZ lifted their 5 year rate back in February and some of the other main retail banks are beginning to do the same now.
An update from us
After a year with us Janneke has left for a new job closer to home. We will miss her in the office! Replacing her is Bronwyn Daines. We’re stoked to have Bron on the team. She has lots of experience in customer care roles, with a background in the insurance industry. She is learning the ropes and getting the hang of our quirks… good luck Bron!
The last month has been a challenge getting our data into our new system and while we still have a few issues to be resolved we are beginning to get the hang of the new system. We apologise if we have been slow to respond, do send a message if you are worried that we have forgotten you! We haven’t.