During the slow news period over Christmas and New year, New Zealand’s weather stories take centre stage. The daily news often features what’s hot, what’s not and what regions are recording record breaking temperatures.
As we headed off on our annual holiday we did so with trepidation because the long-range forecast was looking less than tropical. But the good news is our reality was much more positive. Three solid weeks of sunshine days with a few sporadic rainy patches bringing a somewhat welcome reprieve from the heat. It’s a tough job being a weather forecaster, particularly when your predictions don’t pan out. So, while I’m not putting any money behind my predictions for this year’s property market, here are a few of my thoughts.
Inflation
‘Inflation’ has been a real buzz word since 2020. Lying dormant for decades before roaring back to life with a vengeance. The RBNZ have been fully focused on the issue, aggressively increasing interest rates in the hope of getting this back under control. While writing this Barometer, the new inflationary figures are yet to be released, but my prediction is the numbers will come in lower than expected (and they did!). Anecdotal belt tightening by both businesses and the public will see our inflation return to target levels sooner rather than later.
Unemployment
Getting a job has just become a lot harder with the power tipping back to the employers. The last few years have been a tough environment to operate a business. Good quality candidates have been few and far between and have had more sway over their working conditions with business owners needing to pay more to secure them. Entire businesses have closed just because of their staff shortages. Amanda’s hairdresser, a two-time NZ hairdresser of the year, is closing her doors this month after 15 years in business, simply because she has not been able to secure staff. But as the Government looks to make significant cuts across all departments this year, independent contractors will be looking to secure permanent roles to protect their futures. Outside the capital businesses won’t look to replace departing staff so they can manage their cash flows better. This year the unemployment number will peak around the 5’s.
Dropping Interest Rates
While cuts haven’t been indicated until sometime in 2025, my prediction of lower than anticipated inflation numbers coupled with an increase in unemployment, will likely force the RBNZ to make some cuts to the official cash rate. While these cuts are unlikely to be significant, they will give the market a shot in the arm which will start the long climb out of some negative growth cycles. More “experts” will start calling for this, although at this point the damage has already been done.
Property Prices
The Wellington market will remain relatively flat due to jobs losses and other widely reported challenges currently faced by the city. Government policy tweaks, lower interest rates, and historically low property prices, will start to see the return of investors to the market, particularly in the cities.
The regions might struggle for another year with some negative growth as it is only when confidence from the main centres spills over into the regions that those market start to move. The exception to this rule is Queenstown Lakes and Tauranga/ Mt Maunganui as these markets run at their own pace.
Tourists Are Back
New Zealand is a great place to visit, full stop. Chuck in a weak New Zealand dollar and increased flights, and tourism numbers will continue to rise bringing with it some much needed income. New airline providers are also coming which will increase competition and drive the cost of airfares down. For those who are keen to escape this will be exciting news, although the downside of a weak dollar is that it becomes more expensive for us to be overseas. Some of our future tourists will fall in love with our wonderful country and return on permanent visas, this will contribute to improving immigration numbers to offset the plane loads of Kiwi’s leaving our shores for the ‘lucky country’.
The Wellington Market
There was the usual amount of activity over the summer break with some older properties transacting in the early new year. Early indications indicate there will be plenty of choice for buyers as a rush of stock comes on. We are likely to continue our property market of two halves with good stock selling quickly for good prices and poorly maintained homes sitting around. Banks are becoming more and more particular about the overall quality of the properties that they are lending on, which is just something to be aware of at this stage.
As always, here is to a wonderful year and if we can answer any of your property related questions please do not hesitate to call.
Wellington Market Quick Stats
Meet the Ben Stevens & the Team
What’s on this summer in Wellington?
Superwild, Te Aro, 17 Feb 2024
Billed as a neighbourhood festival of all things wild in food, wine, beer, and cider, Superwild is the perfect summer afternoon event. Invite some friends and wander between Te Aro venues, Goldings, Puffin and Humdinger. There is a lineup of quality menus, music, and guest speakers to complement the drinks. There’ll be a talk on matching wine with music, the American publisher of ‘Blood of Gods’ (a heavy metal and wine magazine) will talk, and a limited-edition perfume created for the event by local brand Of Body will be available. Chefs include Wellington’s own Shepherd Elliot, plus Alex Davies from Gatherings in Christchurch, and Zane Kelsall from Cave à Vin in Auckland.
Click here to find out more info
Aotearoa New Zealand Festival of the Arts, 23 Feb – 17 Mar 2024
Held every two years since 1986, Aotearoa New Zealand Festival of the Arts (ANZFA) celebrates creativity in all its forms. With a diverse programme, the festival includes a range of both ticketed and free events and covers everything from music, theatre, and dance, to visual arts, literature, and more. Music highlights include The National, performing in Wellington for the very first time as part of the festival’s opening weekend. With a diverse selection of local and international acts, it’s set to be a spectacular celebration of global talent.
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Cubadupa, Cuba Street, Te Aro, 23 – 24 Mar 2024
Famed for its diversity and boundary-pushing lineups, CubaDupa is back. The yearly street festival will take over Cuba Street and its surrounds, and transform it into a giant party. The 2024 festival theme is ‘Find Your Wild’. The two-day event includes a range of acts from musicians to street performers, circus acts, and cultural experiences. You’ll be able to wander through art installations, food vendors, and stalls, and soak up the atmosphere. The surrounding bars and cafés get into the spirit by setting up outside seating. You can watch the parades and wandering musicians seated if you prefer.
Click here to find out more info
