Here we are in October already – wow!
It’s been quite a month. Great that Auckland has made it down to Alert Level 3. All going well, Auckland may be back at Level 2 after the announcement on the 4th October.
The “feel” of this latest lockdown has seemed quite different to many people we have chatted with. A sense of “here we go again” rather than the total unknown of Lockdown 1.0 last March/April 2020. Certainly, there seems to have been more of an attitude of “just get on with it” this time around. That’s not necessarily helpful or realistic though, is it?! For many people another lockdown means stress about work, either as an employee or as an employer or self-employed person. For many it is hugely disruptive and difficult to work from home, even if that is an option.
Many New Zealanders are trying to work from home, as well as manage childcare and schoolwork, which can cause a phenomenal amount of stress. If you add in some financial challenges as well that is going to be a hugely difficult situation. If this sounds like you, please do get in touch so that we can help you with strategies and support. Lenders have the systems set up to support you when needed.
We hope you’ve all been coping ok and have managed to enjoy some of the positive aspects of Lockdown – more time for family, more walks, more sourdough adventures!
Now back to that finance stuff…
The CCCFA implementation that we have been mentioning a bit lately has been delayed to 1st December as the Banks can’t be sure they are ready and have everyone trained in time for the planned October deadline with the lockdown limitations. Elise is attending at least 1 webinar a week as each of the lenders and system providers work through their interpretation of the changes.
As always we are working on making our website an easy to use resource for you – with lots of useful info about all things finance, and regular blog updates about what’s happening in the industry and how it might affect you. We would love it if you would go and have a read and let us know what you think!
NZ Funds announced a Zero Fees fund in August. It is a balanced fund, and you must be 100% in. It won’t suit everybody – don’t be fooled by zero fees being the best option – it may or may not work for you, and we are happy to talk with you about whether it is a good option for you! How’s your balance looking? Are you putting in at least $20 per week to ensure that you’re at the full $1042.86 for maximising the government contribution next July? Get that sorted early and you won’t need to make a lump sum payment to get over the line.
Contributing on a regular basis will make a difference to your investment in the long term, so consider making regular payments into your KiwiSaver to make sure that these contributions are working for you through the course of the year.
On the 21st September, the RBNZ published a release detailing their “least regrets” approach to uncertainty.
The Reserve Bank of New Zealand – Te Pūtea Matua makes decisions about official interest rates in a way that is robust in the face of uncertainty about the economy, Reserve Bank Assistant Governor Christian Hawkesby says in a speech published today*.
He has likened the RBNZ’s approach to making monetary policy decisions to the traits of the kotuku.
“But when it comes to making monetary policy decisions under uncertainty, it may be that the kōtuku (white heron) provides a much more fitting metaphor,” Mr Hawkesby says.
A key feature of our least regrets approach is responding to the environment, risks and uncertainties – the starting point of the economy, the balance of risks, and the threats to achieving our key aims of low and stable inflation and maximum sustainable employment.
“It requires an approach that is adaptable, sometimes moving with caution in slow, small steps, and other times moving with confidence, quickly and in large steps to remain successful,” he says.
A couple of weeks ago we talked a bit about what Level 3 looks like in terms of what can and can’t happen when buying or selling.
Obviously, we’re all hoping that we won’t be heading back into Level 3 or 4 any time soon (or at all!) but it is definitely worth being aware of what the different levels mean in terms of how these processes can take place, or not.
The media is full of many frightening headlines in regard to property … “Housing Affordability Worst In 18 Years!” “First Home Values Rise Higher Than The National Average” “Unconsented Work Being Overlooked In Hot Property Market” … it’s a crazy old time, that’s for sure.
We will say it again – be prepared! Talk to us about pre-approval, getting your ducks in a line, knowing the market, knowing your limits. Book an appointment at the Calendly link at the bottom of the page if you want to talk!
Banks and Finance
There’s a bit of variation in interest rates at the moment, with the 1-year interest rates sitting anywhere between 2.5% and 3.8% for most of the main banks. Most 5-year rates are in the 4% to 5% range.
As Auckland is starting to come out of lockdown we should expect to see a series of increases to the interest rates that would have happened had we not gone into lockdown. Give us a call to discuss your situation and make sure we are making the most of the lows rates (depending on your plans).
An update from us.
When ISN’T there lots going on?! Elise has been busy with her renos in Wellington (though a lockdown induced break was a bit of forced down time). Elise is due back from the final trip on Sunday and the property will be on the market, and then it will be back onto her own home renovations.
The Finance Made Easy podcast series with PlainsFM was put on hold due to Lockdown. We are excited to have the series back up and running as we have found a venue to hold us that meets the covid physical distancing space requirements. The next workshop session is coming up next week. Look out for the episode on the Your Community page a few days later!
The big office news is that Bron is leaving us. Bron was head hunted by someone that she applied for a role with prior to working with us. So our loss is their gain. The opportunity was really too good to pass up. We will miss her in the office and wish her all the best with her new opportunity.
We are also welcoming Lisa to the team. While she is taking over Bron’s role, Lisa will bring her own flare to the job and to the team. We are looking forward to getting to know her better, and will do a proper introduction soon!
Until next time,
Elise and the Team