Expectations for 2025 – improving
If we measure improvements in quarters, as expected the first quarter to end of March 25 is looking a bit staid with the promise of good things to come.
With Dec quarter inflation steady at 2.2% for the second consecutive quarter and within the Reserve Bank target band of 2.2% this bodes well for a 0.25 or 0.5% decrease in the OCR come Feb 19th announcement which will in turn reduce interest rates that bit more.
This of course, is long anticipated and just part of the steady recovery process we’ve been talking about.
Here’s a link to the Stats NZ Jan 22nd inflation announcement for more on that >>> www.stats.govt.nz/news/annual-inflation-at-2-2-percent-in-december-2024
Gross Domestic Product ( GDP )
With double negative growth for the last 2 consecutive quarters marking us officially in a recession late last year, we’re expecting the next results due out 20th March to show signs of growth and continue to build throughout the year particularly from second quarter and its onwards and upwards from there.
The following link to the Budget 2025 announcement shows a promising outlook for the year/s ahead >>> www.budget.govt.nz/budget/2025/bps/economic-outlook.htm
House prices
House prices are settling off their post Covid peaks to where they would naturally be in a normal market with CoreLogic stating the national median value now stands at $803,819, which is 17.5% below the record highs of late 2021 to early 2022, but still 16.3% above the pre-COVID level from March 2020.
January 2025 saw the national House Value Index ( HVI ) fall 0.1% marking the 5th month in a row with limited movement, comparably the 6 months from March to August 2024 saw a cumulative decline of 4.1% with a further combined fall of just 0.4% since then, general consensus is we’re now touching the bottom and a potential rebound could be talking shape.
Check out the latest from Corelogic for more on that >>>
https://www.corelogic.co.nz/news-research/news/2025/housing-market-close-to-a-trough
Geopolitical
With the Trump II administration throwing its weight around like a bear just come out of hibernation with a sore head and still drunk on berries, we can only watch in amazement as it all unravels and hopefully not suffer its wrath before it has its first coffee and calms down.
Theres nothing left of Gaza to destroy and surely the debacle in Ukraine must be due to end … I reckon if aliens were a thing they would come down, hover for 24 hours, shake their heads and give us a swerve, write us off as just too crazy right now.
Here in NZ we have a lot less to worry about than all that and can carry on in relative peace and soon to be prosperity, not quite the golden goose era just yet but definitely making the nest.
As they say ‘good times don’t last, nor do bad’ so with the lull we’ve been through it just becomes catch up time later so be prepared for imminent growth as we’ll be in the starting blocks before we know it.
Hopefully by then also all the madness and mayhem happening up north will have cooled it heels and the bear will be sitting back with its shades on sipping on a Kool-Aid observing the results of its creation and calmed down a lot … but you never can tell right.
In conclusion
We’re excited about what’s coming up very soon in terms of growth across the board with expectation of much economic improvement, reduced interest rates, increased GDP and a feeling of general prosperity across the board and reaping the rewards of our long and dismal last 3 years of restrictive monetary policy bought on to counter the effects of the anomaly that was Covid and good riddance … onwards and upwards from here and it can’t come soon enough.