| Welcome to the September issue of the Select Wealth Management Dashboard Newsletter.
The race is on! With only days to go until election day, it's hard to find a radio station, television channel or news article that doesn't have some political comment or opinion. There are new polls, re-runs of existing polls, and endless speculation on how this all plays out. On the surface of it, this looks like it's going to be a sprint to the finish line with a photo finish. In fact, if polls are to be believed it is likely that we won't have a winner on the night and that the MMP system will kick in resulting in negotiations to see who can form a coalition government. (But remember that polls aren't always accurate – refer Trump and Brexit...). An interesting observation for me is that whoever forms a government this year will have a significant challenge on their hands. I struggle to see how any party / government is going to make the boat go much faster. New Zealand is the envy of most Western Countries – fiscally, economically and socially. That's why so many people want to immigrate here. Election campaigns are always run on the promise of improvement – it would be difficult to illustrate where wholesale change can be made to create marked improvement. One of the key election topics is housing. Both major parties (National and Labour) acknowledge that the Kiwi dream of home ownership is becoming more and more unrealistic for some first home buyers. Home ownership rates are currently at historical lows with the latest census results suggesting that 63% of Kiwi's live in their own home. (Whilst this is a historical low, it is worth noting that this is consistent with countries like Australia, America, United Kingdom, France and Denmark). Both parties have policies on how to address this issue, mainly focusing on the production of more affordable housing, but Labour also suggesting a possible capital gains tax on investment property. There have already been some measures put in place to cool the housing market recently, including the higher "loan to valuation" restrictions and greater onus on landlords with "rental warrants of fitness". It seems the property market has been sensitive to these measures along with the political rhetoric for a while now, and evidence suggests that it has been slowing in recent times. Last month I wrote about how there had been record low new listings and slowing house price growth. This month the theme continues with the national average house price increasing by a meagre $368 over the past month, and prices actually falling (quite materially in some areas) in Christchurch and Auckland. Other material differences in the 2 main party's policies include:
If you are interested in policy differences, here is a handy site that you might find useful: policy.thespinoff.co.nz Despite much action on the political front over the past month, markets have been relatively muted. Most share markets are up, but by modest amounts. The only major movers over the past month were the German Dax (up 3%) and Hong Kong's Hang Seng (up 2.5%). Currency movements saw a bit more movement with the NZ$ weakening by 2% against the AUS$, and 3% against the Pound Sterling. (Remember this is a good thing for your investments domiciled in these currencies). As mentioned before, the housing market continues to soften, despite an unexpected reduction in interest rates (both mortgage and term deposit). Here are the numbers: |
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In terms of your Select Wealth Management investment, I met with researchers JMIS last month for a quarterly review. There have been some slight changes to the model portfolios, but more tinkering on the fringes as opposed to wholesale change. Overall, the theme remained relatively unchanged with little evidence to suggest any material change in the investment landscape in the foreseeable future. Finally, thank you once again to all of you that have referred your family, friends and colleagues to Isaacs Financial Planning. Thanks to your support, our Giving Back campaign has been great this year, we were lucky enough to be given a tour of the Lower Hutt ED when we presented the Airvo machine to the Hutt Hospital Foundation Trust. These guys do an absolutely incredible job, and we are so pleased to have been able to make a small contribution to their incredible cause. Our current campaign with the Wellington Free Ambulance has started really well, so please keep those referrals coming and hopefully we can make a meaningful contribution to this service. You can follow our progress at www.mifinancialplanning.co.nz/giving-back.html . Until next time. Warm regards Dave and the team at Isaacs Financial Planning dave@mifinancialplanning.co.nz |
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This newsletter is intended for general distribution and does not constitute personal financial advice. Copy of my primary disclosure statement and secondary disclosure statement.