As we move inexorably along in the second decade of the 21st century, I thought it might be interesting to get a sense of how time ‘flies’, as we set up for yet another year.
The 50th anniversary of the assassination of President Kennedy and all the TV shows reviewing that terrible day brought back my vivid memory of reading the Christchurch Star placard outside of a dairy in Bealey Ave, Christchurch – “KENNEDY SHOT DEAD”.
Now, it has occurred to me that over 59% of all the people in the world right now were not yet born on that day. Babies born in the year of the 9/11 tragedy in the USA are in high school this year, and the high school students of that time are working and/or have graduated from university.
The point here is that while we remember key events, time marches on and can slip away on you without you realising it. Perhaps 2014 is the year for you to take action for your benefit… Maybe your first step into the investment property market or home ownership?
Is the timing right?
2014 is the year where a robust New Zealand economy will out-perform most of the other economies in the developed world. You don’t have to be a rocket scientist to know that a perfect symphony of events and circumstances will conspire in 2014 to see the New Zealand economy grow by over 4% in GDP (which is massive by world standards).
Some of these key contributing factors are:
- The Canterbury re-build will finally see the start of some major projects and housing rebuilds which are picking up exponentially.
- The new builds in Auckland are picking up pace as the city struggles under the weight of increasing immigration and internal population growth.
- New Zealand’s population has grown to over 4,500,000 and is still growing. Incidentally, the population of NZ in 2001 was 3,820,749 and in 1963, 2,566,900.
- Labour shortages will necessitate a rise in pay rates and the minimum wage will be increased (also, in part to help low income families).
- During 2014 inflationary pressures will leave the Reserve Bank with little option but to increase the official cash rate (OCR) flowing through to mortgage rates.
- The strength of the New Zealand economy, and the increased interest rates will see the New Zealand Dollar push even higher against the Greenback and the Aussie Dollar, putting pressure on exporters to remain competitive. New Zealand’s balance of payments on imported goods will look much better, however, just to note New Zealand’s terms of trade are at their highest level since 1973.
Interest rate management – Do I float or fix?
This is best answered in our blog on 29th Oct 2013, as the comments there are still very valid right now.
In 2014, any economic bad news is most likely to come from off-shore, but internally the New Zealand economy seems very robust and if you were ever thinking about finally buying that investment property after waiting years for the stars to align, then now is the time.
We’re here to help you make your next move.