2014 – The Rock Star We’re All Hoping For?
So – What’s in store for us in 2014? You get that feeling that Kiwis are ready to mount wings and fly finally right? Or is it just me? This year just has that great feeling about it, and I for one am really looking forward to what’s going to pan out on the financial horizon.
In short expect the following:
- House prices will continue to rise.
- First home buyers will continue to suffer – or build their own homes!
- The Kiwi Dollar will continue to perform strongly.
- Kiwis around the world will maintain the ‘Brain Gain’ and continue to return to their home here in NZ.
- Kiwi shares will go up-up-up….
- The OCR to rise in quarter two which will add to the already increasing pressure to raise interest rates.
Experts are saying that 2014 will be a mightily prosperous year for Kiwis. One Economist I read even went so far as to say that the boom we’ll experience in 2014 will be a once in a generation one!
Commodity prices are in boom, house prices are in boom, our dollar is in boom, kiwis are flocking back to their home nation to live, businesses are more confident, consumers are opening their wallets…..PHEW!
House prices rose on average about $10K per month last year. That’s insane growth. And – why we say that investment property is the best performing investment asset out there. I use this figure a lot but if you compound that $10K for 20 years at 9.2% per annum (which is the average per annum performance for property over the last 49 years), this $10K becomes $58K! Talk about a retirement strategy!
Unfortunately the one gang that’s not very happy right now are the first home buyers. The Government in all their wisdom shut the first home buyers out of the market by increasing the LVR rules last year. However, if any of them have any sense, they’ll figure out they can build their first home and borrow more than the 80% prescribed. I say look for land and get a developer to build! As time moves on though, we’ll see more and more whether the LVR restrictions will keep the investors out of the market, and have any affect on house prices.
A testament to our strong economy is our rising dollar. We could go as high as the Ozzie Dollar. Not good for exporters, but good for travelling and getting a deal here in NZ – meaning more money is being spent – meaning inflation will kick in – meaning interest rates will go up! But, our rising dollar is just one more story supporting our strength of economy here in NZ in 2014.
It’s the Year of the Investor in my humble opinion. If anything, my hope is that the Kiwi public will realise a thing or two about market fluctuations and that there’s a buck to be made when things are on the up. I hope this year Kiwis see how well our economy is doing, and they think seriously about their financial futures. When the papers and TV news are shoving it in their faces on a daily basis, it’s hard not to start turning the spotlight inward and thinking about how all of this affects ‘me’.
It should affect you positively – and you should do something about it!
Start saving for your retirement NOW…… Investment Property and Shares probably won’t be this good for quite some time…