In April we will be running in-person First Home Buyer seminars in Whakatane and Wellington.  Key topics to be discussed include options for purchasing with a 5% deposit, how to use your Kiwisaver to buy a house, and what the lenders are looking for.  We will have a range of experts attending, providing information and advice.  They’ll also be introducing an innovative new product.  If you are looking at buying your first home, or know someone who is, you can register via the links below:

April 9^th, Lowe & Co office, Mt Victoria
https://www.andco-seminars.co.nz/wellington/

April 10^th, CK & Co office, Alicetown
https://www.andco-seminars.co.nz/alicetown/

April 11^th, Clark & Co office, Porirua
https://www.andco-seminars.co.nz/porirua/

Our Kiwisavers top the charts:

We recommend Kiwisaver funds that take a core and satellite approach to investment strategy.  That means index funds make up what we call the core of the investment mix.  This provides wide diversification and a market return.  The investment manager then provides their expertise to add value with active management or incorporates other active fund managers from specialist areas around the globe. 

Here are some results as at 31/12/2023 for the Kiwisaver providers we recommend:

The Booster Socially Responsible High Growth Fund was the top ranked aggressive fund and has been so over the past 10 years.  The average return over the past 10 years has been 9.40% per annum. 

The Lifestages High Growth Fund was ranked 1st among all Kiwisaver providers in the aggressive fund over the last 12 months to December 31^st 2023.   It delivered 19.7%. 
Source: Morningstar Kiwisaver Survey December 2023.

It’s important to review your Kiwisaver regularly, and as you approach retirement age potentially moving to more conservative funds.
 
Current Investment Rates with Booster:

We have access to Booster’s Income Securities Portfolio for cash deposits.  These are low risk investments ideal for parking cash over the short term.  The funds investment mix is predominantly New Zealand fixed interest investments with an assessed credit rating of about equivalent to BBB Standard and Poors.  This is below the rating of most New Zealand based Australian owned banks but comparative with New Zealand owned banks.

On Call                                       5.50%pa
3-month term                             5.60%pa
6-month term                             6.20%pa
9-month term                             6.30%pa
1 year term                                 6.40%pa

Please note these rates are subject to change and terms and conditions apply.  Contact us to find out if it’s right for you.
 
From Independent Economist Tony Alexander:
 
No policy easing imminent
 
Last month I wrote that a further tightening of monetary policy as predicted by some bank economists would not occur and that despite that there would still be some stepping back of buyers from the housing market. The Reserve Bank not only did not raise their cash rate on February 28 they also withdrew their warning that they might need to raise it further.
 
However, when combined with some new worries about employment and a surge in people bringing their property to the market, buyers have decidedly shed their feeling that time is not on their side. In my monthly survey of real estate agents there has been a fall in the proportion of agents saying buyers are worried they will miss out (FOMO) to only 11%.
 
This is down from 23% late in January and 40% in September and almost back to the very low levels from early-2022 to mid-2023 when buyers felt near no need for speed in their purchase.
 
My agent survey has also just shown a decline in the net proportion seeing more investors enter the market to -5% from 24% last month. First home buyers are however still strongly seen as being in the market and for the young generation the situation has moved in their favour again.
 
When might this change? That is, when might we see many more buyers, an end to the listings surge, and new acceleration in the pace of price rises? Probably not until interest rates are solidly seen as falling. Is such a decline imminent – with solid to my mind being 1% coming off fixed rates?
 
No, Inflation remains too high at 4.7%, twice the usual number of businesses say that they plan raising their selling prices, wages growth has yet to decidedly slow down from twice its three decade average of 3.3%, and not many days pass without new price rises being discussed. This includes for insurance, rates, domestic air travel, eating out etc.
 
My view remains that with a firm possibility the Reserve Bank has actually tightened monetary policy too much we will see a period of solid interest rate declines. But it doesn’t seem safe to assume that will start happening until very late this year.
 
For additional information on the economy, housing market, and interest rates, you can subscribe to Tony’s free weekly Tony’s View publication at www.tonyalexander.nz
 
 

Disclaimer: This newsletter is meant to be informative and engaging, hopefully not a cure for insomnia.  Please don't take this as personalised financial advice.  Discuss your situation with an Advisor.  This is where I need to say past returns are no guarantee of future returns.