The Influence of Currency Exchange Rates

Migration from overseas a major driving factor of Hawkes Bay rural lifestyle property prices. Exchange rates undoubtedly have an influence on the level of migration, affecting as they do the ability of migrants to compete for and purchase property on which to settle or for investment. Many potential overseas lifestyle buyers having a keen interest in settling in Hawkes Bay, but also with memories of recent, substantially more favourable exchange rates, have been “waiting in the wings” for what they correctly conceived to be the inevitable weakening of the NZ dollar. In theory a significant and sustained weakening of the NZ dollar might also place upward pressure on pastoral land prices, driven by New Zealand farmers who, as primary export producers, should be amongst the first to gain substantial financial advantage from more favourable exchange rates. In the event, while the NZ dollar has weakened quite significantly over the past six months, lamb prices have not benefited but rather fallen quite dramatically. Dairy and beef prices have not risen to any extent. The result has been an easing of farm prices from the unrealistic highs of 2005, but no dramatic price drops.

Filed under: Advice, Hawkes Bay, Moving to New Zealand