We are at that time of the year again. Today we look back at what has happened in 2018.
The Federal Reserve put up the Fed Funds Rate four times this year. Back home, the Reserve Bank of New Zealand has indicated its unlikely to raise the OCR any time soon. The next move may even be down.
So far, mortgage interest rates in NZ haven’t been impacted too much but watch out for next year.
As for housing, 2 key developments have helped slowed the market. One is the Bright Line Test had changed from 2 years to 5 years for any residential purchases on or after 29 March 2018. Secondly, all existing residential property is classified as sensitive property and nonresidents will need to apply to OIO to purchase it. Known as the foreign buyer ban, it too has contributed to the slowing down of the property market.
Auckland housing market continues to stabilise, auction clearance rates continue to drop but the regions (northland, waikato, wellington) continue to experience shortages and seem some housing price growth. According to the latest statistics from REINZ, the overall national median house price has risen from $540,000 to $575,000. With Auckland excluded, the national median price has risen $450,000 to $485,000. The median days to sell in Auckland was 37 (apparently 2 days longer than the same month last year).
And a blow for Kiwibuild when it was announced the man in charge of the Kiwibuild program had been off work since May 2018 due to employment disputes.
Outside of the property world, we see NZ government increase the fuel tax causing NZ’ers to experience more financial distress as their expenditure on fuel increases. It would be interesting to see if we get protests like the ones in France after the President announced increases on tax on diesel.
In the employment and wages news, we hear about demands for wages rises for nurses, teachers, ministry of justice staff. Coupled with the rise in minimum wage from $16.50 to $17.70 next year, so watch out because we are likely to see more inflation next year.
On the global arena, President Trump continues to fine tune his team, global trade tensions continue between China and America, Huawei’s 5G technology gets caught in the middle of a trade war in the name of cyber security threats, the Brexit talks haven’t been concluded yet, and 2018 also saw the exodus of PM Turnbull in Australia.
For some, 2018 has been quite a year. For others, it has been more or less the same.
Let’s look forward to a happy and prosperous 2019 year.