The share market has dropped 20% across my portfolio since last week.
Gold has taken a knock too but they will both come back over time.
House prices continue to surge and I’m taking calls from clients, being interviewed and continuing to develop my own thoughts of where this is all going and you know what?
My head just keeps going back to some very simple facts.
“Everyone has to live somewhere.”
- Most people at the moment just want to be at HOME.
- People coming from overseas need to be quarantined in a HOME.
- Local tourists are arriving back in droves to their HOMES.
I’ve had a bunch of Airbnb bookings cancel in the last few days (14 of them) as New Zealand quite rightly closes up shop and people stay HOME.
Interest rates have dropped today to an OCR of .25% which means very little to most kiwis.
What does mean something is the reserve bank saying these low rates will be for the next 12 months, giving kiwi borrowers the time they need to refix floating rates or to break mortgages and refix at the lower rate.
The other thing the reserve bank did was pause the implementation of further equity restrictions on banks making it easier for banks to lend to kiwis wanting to buy more HOMES.
The New Zealand government will no doubt roll out a massive stimulus package over the coming weeks but one thing stays the same, we as a country don’t have enough houses.
My guess is the only tool the government can use now is to start to look at those “Loan to Value” restrictions with an eye to easing them up.
In the meantime I’m fairly happy to have the bulk of my wealth in New Zealand residential housing.
If anyone needs me I’ll be at HOME.