Well this certainly hasn’t been the month we expected! Back into a Level 4 lockdown, at the discovery of the Covid-19 Delta variant here in little old NZ! Are you ok? These lockdowns have massive impacts on our lives – for some of us it means no work or trying to figure out how to keep our businesses afloat, and for others it means anxiety about the virus, anxiety about being a frontline worker, and anxiety about potentially needing to self-isolate if we have been in one of the (many!) places of interest. Whatever is going on for you, we want you to know that we are really happy to chat. Send us an email if you want to touch base.
If you’re struggling financially now is a good time to reach out to us as well. Better to be pro-active and start planning now how to get back on track, rather than slip further – we can help you figure out a way to get through this financially difficult time.
We told you last month about the Finance Made Easy podcast series that we are doing with PlainsFM. Unfortunately the lockdown has paused the series, but we are looking forward to getting back to it as soon as we can.
You can listen to the previous episodes on the Your Community page on our website.
We learnt last lockdown that moving your KiwiSaver to a conservative fund as a response to the Covid-19 situation was actually a mistake! This was because by doing that, KiwiSaver members locked in the losses rather than leaving their funds to recover. Hopefully everyone is feeling confident in the ability of the economy to bounce back, and no one has felt the urge to move their funds. If you have, don’t panic, just get in touch with us for a chat about the best way forward.
This time around the markets have not been as dramatic in their response as the world markets were already managing around the Delta variant, it is only the NZ markets that needed to consider and adjust for the NZ conditions.
Send us an email for KiwiSaver help, or book a meeting at the Calendly link at the bottom of this page.
In his latest market survey, Tony Alexander found that Mortgage Advisers are seeing more First Home Buyers coming forward. Maybe the regulations that came in in March are starting to take effect! Investors seem to be more wary, with many choosing to fix for 3 year terms to lock in the still fairly low interest rates.
A couple of weeks ago, the RBNZ published a release stating that house prices are above their sustainable levels. They suggested that this was in part due to a turn around in demand, with low population growth in NZ since the first outbreak of Covid-19, and also house building being at a record high. The expectation is that the house price inflation that we have been seeing in the last year or so will moderate significantly in the period ahead.
House values fluctuate on a daily basis, depending on the buyers and houses on the market at the time. Only 3 times in the last 20 years have property values dropped over a 12 month period. The discussion about property value sustainability is an important one and we will be talking about it in the coming weeks – in particular about how the drop in house values could impact you.
In our last newsletter we said that the OCR was likely to go up at the next announcement, which was on the 18 August. Well that didn’t happen! Covid-19 reared its ugly head again. The RBNZ chose to leave the OCR at 0.25% as it seemed like the best option was to be cautious as the country was heading back into lockdown. If we are out of lockdown the OCR will definitely be increasing at the next review in October. The RBNZ will of course be taking into consideration the impacts of this most recent lockdown but we do still expect to see a rise in the rate.
As an aside, the RBNZ Te Putea Matua recently updated their brand to “better reflect our purpose and the mahi we do on behalf of all New Zealanders”. Alongside their cool new logo, they intend to emphasize simple and real language and imagery to reflect the diversity of people in Aotearoa New Zealand. Good on them! As you’ll be aware, we are all about making all that intimidating “finance stuff” more accessible and understandable.
Banks and Finance
Many of you will have read that ANZ jumped the gun on raising interest rates! The bank put their rates up in anticipation of the OCR rising in August, and when this didn’t happen they then decided to lower the rates again a couple of weeks later. We are hoping that the other banks will do a rate check too.
The banks are really focused on the CCCFA changes that are due to come into effect in October, and many are starting to implement the policy changes now in anticipation. The key change that the banks are looking at is the responsible lending, and checking that your expenses are truly what you are declaring them to be.
An update from us.
Elise’s renovations in Wellington had been progressing well, but are now stalled due to the lockdown. So many people are in this boat! Tradies are juggling the work that they had in the pipeline along with rescheduling the jobs that they were already working on. Maybe the only bonus is that some parts of the supply chain have had the opportunity to catch up a bit, while others will be impacted by the production lines being closed due to being the lockdown.
As for us, we are able to work from our homes, so on we go! We are at the end of the phone (or email) if you would like to run anything by us.
We look forward to hearing from you if there is anything we can help you with and do keep an eye on our Facebook and blog for useful information and tips.
Until next time,
Elise and the Team