As of the first month of 2021, I would like to take a glance at what has happened last year to our economy and rental market in general.
We still recall January 2020 when the rental market [unusually] picked up early and we have done about 30 lets just before New Year. It was interesting to note that the rental market had shifted its cycle for about 3 weeks earlier and we managed to catch that wave of enquiries and viewings which later played a massive difference to our occupancy rate closer to the first lockdown.
Overall NZ economy when the year started had a positive and promising outlook with
- OCR being cut by the RB to a new record low rate,
- Good exchange rate,
- Stable NZ dollar hence good export prices,
- Strong consumer and relatively good business confidence,
- Low unemployment rate
- Strong net immigration influx,
- Healthy inflation rate of 1.62%-1.65%,
- Rising house market,
- Acceptable Govt debt level of $57.7 billion, equivalent to 1/5 of the country’s GDP.
However, reading weekly issues of Tony Alexander’s View he noted there was 2 events to keep an eye on – Iranian response to the killing of their general and flu event in China. Well, we know now that the latter blew out into a huge shock to the whole world.
Recalling the panic and uncertainly everyone had to face over this year was indeed scary. The absence of historical knowledge and experience about what global pandemic and lockdowns meant no one knew how to handle these shocks whatsoever.
Mass media was not of help either with their daily campaigns of new Covid cases and death rates in the world brainwashing the general public with negative and somewhat damaging information.
As of today, we, as a community achieved a great result. Our success in “eliminating” Covid was based on probably one of the important factors – the willingness of Kiwis to sacrifice for others. We, as a nation did not put our own interests above others and basically acted harmoniously as one society. Not allowing ourselves to downplay the significance of the virus played a critical role nowadays. Everyone should give themselves a pat on the back for it.
City rental market had suffered quite considerably in the last 11 months however there are a few positive signs of slow recovery we would like to point out
- Total number of listings is continuously dropping,
- An average timeline to rent a property is decreasing,
- More enquiries and viewings per property,
- Better tenancy selection,
- Rents stopped declining.
Having said that, we are nowhere near recovered yet comparing to the same time last year, but these signs do look encouraging.
It is unquestionable to say that the economy is going through a recession however we are definitely better off than most of our country partners with an unemployment rate of only 5.3% (with predictions in double digits prior) and over 10% rise in the house market. I may sound too optimistic but our future does not look as grim as initially anticipated.
Hope you had an amazing Christmas and New Year with your loved ones!
I look forward to updating you in a month to come.