When will it end?

Watson · Testing The Water Joined: 16 Nov 2003 Posts: 6

We started thinking about emmigrating to New Zealand at the end of last year. We had our hearts set on Nelson for the lifestyle and the climate. :D

Selling our house then would have given us around £100,000 cash. If we’re lucky we’d now get around £110,000 or maybe £120,000 if we’re really lucky. It’ll probably start falling soon.

When I first looked at the exchange rate £1 bought about $3.30. today and see the £ is buying $2.68.

So my £100,000 would have got us $330,000 – enough for a nice house few acres in the countryside just outside Nelson.

Now our £110,000 buys us just $295,000 and property prices around Nelson have been going up and up – we’d need a big mortgage now to afford what we could have bought outright last year.

I’m sorry to sound like a typical ‘whinging Pom’ Embarassed

:cry: but we’ve had our dream whipped away in the space of just a few months. Now I don’t know whether we should apply or not. Hmmm

So is it likely that the New Zealand dollar is headed for a fall which will help us? Is it likely that the Nelson property bubble will burst Hmmm

:

p.s. Great website

JCM · Posted: Sun Nov 16, 2003 1:01 pm Post subject:

Hi Watson,

Where will it end - that's a really tough question.

Here's a chart showing how many pence one New Zealand dollar has bought over the last 20 years or so.

At the moment, the NZ dollar looks like it's at around its long-term average value, buying 35 - 40p.

Who can tell what direction it'll go next? If we could, we could make a fortune speculating on the currency markets. From what I've read in the financial press though, most commentators seem to think the New Zealand Dollar will strengthen further.

Here's a historical chart of how many US cents one New Zealand Dollar has bought.

Seems to swing around a lot.

As far as Nelson goes, it's a very nice place to live and more and more people are recognising this so, unless there's a severe drought/recession, prices may not ever fall much again.

Looking on the bright side, a few acres outside Dunedin are still cheap and you can still build a good-sized house in few acres within half an hour or so of Christchurch on your budget - and to be honest, the employment and education opportunites in Christchurch are better than Nelson. You pays your money and takes your choice :)

AJ Cartwright · Posted: Sun Nov 16, 2003 8:03 pm Post subject:

I'm amazed at these charts JCM.

Looking at them, the Kiwi Dollar was a full 67% higher in 1996 than in 2000 and 2001. I'm glad I didn't emigrate in '96!!!! My Pound would have been worth a pittance of $2.25. It kind of reminds me of that old VW advert; the one where the guy always moved into shares or gold or the housing market just as the smart money was moving out.

It looks like migrating at the wrong time can seriously damage your wealth!!! Must have been good for anyone going in 2000 or 2001 though; £1 was buying $3.60 to $3.70. Cor Blimey; if only!!!

JCM · Posted: Mon Nov 17, 2003 1:37 pm Post subject:

When we came out around 5 years ago, we got NZ$3.10 to the pound if I remember rightly.

I recall feeling rather unhappy when the dollar dropped to 27p - I remember at the time many Kiwis referring to their currency as the New Zealand Peso :P.

And now I'm much happier that a dollar buys 37p. Not that I have any intention of going back to live in the UK; but it certainly makes a holiday to visit the relatives better value for money.

Ian Simpson · Posted: Sat Jan 03, 2004 9:02 pm Post subject:

I see that despite the rise of the NZ$, British and U.S. backpackers still think that NZ is good value.

Backpackers rate dollar
03 January 2004

Lighter wallets have failed to curb the spending enthusiasm of backpackers undeterred by the high kiwi dollar.

Backpacking tourists in Christchurch still rate New Zealand an affordable place to visit and rank it cheaper than Australia as a travelling destination. The dollar has climbed to a six-year high on the back of the weaker Unites States dollar with the exchange rate closing at 65 cents late Thursday.

"I have come here with pounds so to me New Zealand is cheap," London sightseer Rob Sortwell said. He said the climbing kiwi dollar had made no difference to him coming to NZ. "It is definitely cheaper here than Australia. I think it is much harder for Kiwis to go to Europe but they all seem to go there anyway."

Fresh off the plane yesterday, Richard Sheets, from Weed, California, said the weakening greenback would not have made him call off a trip to NZ because he had been planning a visit for many years.

"I had a rough idea it was more expensive because I looked it up at home and the dollar had gone up since (the rate in) my guide book but it is still affordable," he said. However, he would not recommend anyone making the journey for any shorter than two weeks because of the expensive air ticket from the US to NZ. Dorset's Rob Tracey, of London, was philosophical about the rising kiwi currency.

The former engineer left NZ for Australia last month when a pound was worth $2.75 but it had dropped to $2.57 yesterday. "Compared to England it is affordable here. Some of the tours are expensive but I think they have a captive market. It probably does not make much difference anyway because travellers only have a limited time to spend their money."

He said his money went further in NZ than it did during a brief tour of Tasmania. Most tourists found backpacking-style accommodation to be much cheaper than their home-countries. Milk, bottled water, some confectionery and beer were among NZ products considered expensive by hostel- dwelling visitors.

Michael Lee, from Seattle in the US, was equally unruffled after staying in hotels during his visit. "It would be nice if the dollar was stronger but I wouldn't cancel the trip on the fluctuation of the exchange rate," the heavy equipment operator said.

http://www.stuff.co.nz/stuff/0,2106,2773231a13,00.html