2019 in review

We are at that time of the year again. Today we look back at what has happened in 2019.

The Reserve Bank of New Zealand has cut the OCR to a low of 1%. The next move may even be down. Additionally, the Reserve Bank has increased the banks capital requirements. Taken together, banks mortgage rates have steadied and are currently sitting at 3.4% p.a fixed for 18 months

As for housing, Auckland continues to see a slower market. Houses are still selling but vendors are choosing to hold onto their properties if they can’t get the price they want. There are more transactions in the $600k to $850k thus lowering the median price. Real estate markets in the regions outside of Auckland have fared better.

And a blow to the Kiwibuild project too when it was announced the 100,000 homes in ten years will no longer be going ahead. Phil Twyford took blame for the failure of KiwiBuild and lost the housing portfolio. So rather than pushing overpriced, tiny houses on first home buyers, the new project will be addressing housing shortages by working with private developers to “Build to Rent”. And maybe later “Rent to own”.

Outside of the property world, we see both the Auckland Council and the NZ government continue to increase the fuel tax causing NZ’ers to experience more financial distress as their expenditure on fuel increases. Phil Goff (Auckland’s mayor) was lucky to get re-elected despite increasing the fuel tax.

On the global political stage, Boris Johnson with his Brexit plans defeated Labour. While the trade war between China and Trump has softened with reports both parties are starting to reach some sort of an agreement. Closer to home, Scott Morrison of the Liberal party surprised Labour’s Bill Shorten to win the Australian PM election earlier in the year.

As for New Zealand, PM Arden has continued to be popular. Her infrastructure spending is well timed just before next year’s election which she is likely to win.

Stocks have done quite well with the NZX, ASX, NASDAQ, and Dow Jones all recording gains during the year. This is only compounded by the savers facing negative interest rates and being forced into riskier assets. So far, stock investors haven’t been burned but there could be a bubble coming.

For some, 2019 has been quite a year. For others, it has been more or less the same.

Here’s to a successful 2020 and beyond.

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