Economic Outlook Improving – Economic growth of around 3.5% is forecast for the next two years. The export led recovery continues with signs of a sustained recovery, in particular among our major trading partners of Australia and Asia* (New Zealand recently posting its first annual trade surplus in almost 8 years). The labour market has turned sharply (unemployment forecast at 6.2% for March 2011, down from 7.1% for March 2010**) and a net 16% of business confidence survey respondents expect to hire more people over the coming year, the strongest result since early 2002. Business confidence is strong (a net 45% of survey respondents expect better times ahead for their own business in a year’s time – the highest own activity reading since May 1999***). Residential construction is also recovering with building consents rising 5.8% over the last 3 months, compared to the previous 3 months****. The indicators are positive and shaping up nicely for sustained economic growth, all good for medium term house prices and the property market.

* Reserve Bank of New Zealand (rbnz.govt.nz)
** The Treasury, March quarters
*** National Bank Business Outlook Survey - May 2010
**** BNZ Weekly Overview
***** Quotable Value – 3 months ending May 2010, compared to same period last year
******REINZ NZ Property Report – 1 June 2010

Leonie Snook, Top Wellington Real Estate Agent