My old country over the past few weeks has reinforced to me (as if I needed it) that I made a good call all those years back when I decided to visit New Zealand (NZ) as I travelled the world, and then didn’t leave.
Since the referendum vote held on 23 June, it has to be said that the United Kingdom (UK) has gotten itself into quite a pickle. The Conservative Party Leader and Prime Minister, David Cameron, has resigned, one of the architects of the Brexit campaign, Nigel Farage has resigned from leadership of his party, UKIP. The other main “Leave” campaigner, ex-Mayor of London and would be Prime Minister, Boris Johnson, found he did not have enough support within his own party and has thus stepped down from the Conservative Party leadership race. The Labour Party is in turmoil as a result of poor leadership during the campaign, with public demands from Labour MP’s that their leader Jeremy Corbyn step down. The pound’s value has dropped and that essential ingredient for strong business growth – stability – is in short supply.
There appears to have never been a plan for the possibility of the UK leaving the European Union (EU). This is a sobering reminder to have a plan for every eventuality whether it is politics or business.
As New Zealand struggles to find solutions to our current housing crisis, has Brexit just added another layer of possible immigrants seeking solace from their predicament? UK visitors to Immigration New Zealand (INZ) website more than doubled after Friday's Brexit vote. The website received more than 5500 UK visits a day during the three day period following the vote, compared with a usual level of just over 2000 a day.
The week leading up to the referendum and the week following the decision that the UK would leave the EU saw a 27 percent jump in people from the UK browsing the New Zealand property website realestate.co.nz compared with the two weeks before this period. New Zealand has long provided a relatively safe environment to live with a 1st world economy, reasonable standards of living possible and (compared to the UK) a temperate climate.
This increased interest in NZ by the Brits, if converted into increased immigration will put an even greater strain on our housing provisions in Auckland and the associated North Island towns now being affected by what is known as the “halo effect” of property price increase occurring not just in Auckland but in the surrounding urban centres – Hamilton, Tauranga especially.
On the back of this comes a word of warning from Business and Economic Research Limited (BERL) Chief Economist, Ganesh Nana, who warned the country is not prepared for the turmoil being unleashed by Brexit and the road ahead would be "hair-raising."
Dr Nana said New Zealand's relatively high interest rates would make the NZ dollar even more attractive to investors seeking a safe haven. That would push up the exchange rate making exporters less competitive.
"The world is not going to be a happy place from an economic perspective. That's going to make business in New Zealand just that little bit more difficult."
It would be silly to gloss over the impact that Brexit could have on the economy, Dr Nana said.
Earlier this month the Reserve Bank warned the exchange rate was already too high and the weak global economy was at risk of sliding further south. But ANZ and ASB bank economists say the extent of the financial upheaval is not yet clear and NZ is well placed to withstand turmoil.
In this uncertainty the only thing that is clear to me is that nobody is completely sure of the impact of this decision by the UK and whether it has a positive or negative affect on us in NZ will play out over the coming years. It would appear though that we are not immune to whatever impact will come.