Risky Lending / Interest rates

I am incandescent with rage at the clowns at the Reserve Bank and their total inaction on inflation and interest rates.
And now we here from deputy governor that "risky lending" has been going on.
Risky lending!
We are told by the Reserve Bank that they have allowed "risky lending", and now we all have to be held to ransom by it.
Who is doing the "risky lending"? Why are they doing the "risky lending"? Why are they being allowed to do "risky lending"? How prices are shooting into the stratosphere, and some of this is being supported by "risky lending"(?) The authorities are failing in their most basic duties.

The Reserve Bank is also saying they are worried about price falls due to "negative equity". Please let the market function! Please let people bear the responsibility for their own investment decisions! Please let people have a chance at entering the housing market without being forced to bear constantly skyrocketimng prices when the market is trying to correct!

I don't want to be paying $100 for a hamburger just because this Reserve Bank turns a blind eye to inflation. They have a responsibility to all - not least of all renters who are getting screwed over and ordinary everyday workers who are getting screwed over. Stop throwing all your weight behind those who don't want to take responsibility for their own investment decisions; it is fundamentally unfair!!

https://www.stuff.co.nz/business/125...own-on-housing

Reserve Bank prepares to crack down on housing
Tom Pullar-Strecker
09:41, Aug 03 2021

The Reserve Bank has proposed reducing the amount of low-deposit lending banks can do for mortgages.

Consultations will start with banks later this month, with a view to introducing in October a tighter loan-to-value restriction. It would allow only 10 per cent of new owner-occupier housing loans to be to borrowers with a 20 per cent deposit or less, instead of the current 20 per cent of lending.

It will also consult in October on implementing debt-to-income (DTI) restrictions and/or “interest rate floors” to prevent house buyers getting over their heads with debt.

The decisions follow the Reserve Bank signing an updated ‘memorandum of understanding’ with Finance Minister Grant Robertson.

ANZ chief economist Sharon Zollner said the measures could reduce the pressure on the Reserve Bank to raise interest rates.

“Macro-prudential tightening means less monetary tightening is required.”

Reserve Bank deputy governor Geoff Bascand said the bank was focussed on ensuring borrowers were “resilient to a range of future economic and financial conditions”.

“We are particularly concerned about those who have borrowed in the past 12 months at high LVRs and high DTIs,” he said.

“If house prices were to fall, some buyers could face the possibility of negative equity – which means the value of their property is below the outstanding balance on their mortgage.”

Bascand said the steps the Reserve Bank had taken to date had only partially reduced that risk.

“We haven’t seen a sufficient reduction in risky lending,” he said.

Robertson said the updated memorandum would ensure the Reserve Bank had the flexibility it needed.

“I have largely agreed to the Treasury and Reserve Bank’s proposed update to the memorandum to add debt serviceability tools, but as I indicated in June this extension should not unduly impact first home buyers,” he said.

He is believed to have concerns that controlling the amount of debt house-buyers can take on relative to their income could disadvantage younger buyers.

“We want to make sure we don't price first home buyers out of the market,” he said.

Robertson indicated he had insisted on “further wording” in the memorandum that states the bank “must have regard to avoiding negative impacts, as much as possible, on first home buyers” to the extent that was consistent with the bank’s purpose and functions.

“I believe this agreed wording will set clear public expectations while maintaining the operational independence of the Reserve Bank. It is still up to the Reserve Bank how it chooses to introduce any restrictions, having had regard to this condition,” he said.

Any decision to introduce DTIs would only happen after a “full public consultation” and a regulatory impact assessment, which would take a minimum of three months, he said.

That suggests DTI restrictions could not be introduced until the start of next year.

Economist Shamubeel Eaqub said it was “about time” for the proposed new controls.

“The only thing we can rely on is looking at what happens when you choke the supply of credit,” he said.

“What we saw in previous episodes is when the Reserve Bank chokes the amount of credit that is available it reduces the amount of competition because fewer people can get approved for mortgages and hence fewer people can buy.”

Interest rate floors would be sensible, Eaqub said.

“What they’re saying is actually sometimes we might want to have lower interest rates for the functioning of the wholesale market, but we don’t necessarily want that rate for mortgages.”

Interest rates were a fairly blunt tool, and the question was how to use them to manage disparate parts of the economy, “especially housing which seems to go up no matter what you do”.

“We have to still provide stimulus for the wider economy – look around the world now, delta is running rampant, there is real risk that the global economy is going to take a hit,” Eaqub said.

“There’s real risk there will be disruption to trade; is this the right time to raise interest rates because house prices have gone up?”

He said all the macro-prudential tools being worked out would allow the Reserve Bank to create some “separation” between the official cash rate and the incentives for people to buy and sell houses.

Reserve Bank governor Adrian Orr acknowledged that “one of these reasons” house prices were high was low interest rates.

“We had to significantly lower the official cash rate to best meet our monetary policy mandate of maintaining low and stable inflation, and contributing to maximum sustainable employment,” he said.

“This is why the current level of interest rates are historically low now. This is also why the current level of interest rates is not indicative of where they will be on average through time – or at least over the life of a mortgage.”

The Reserve Bank’s monetary policy committee would need to think about “when and how we would return interest rates to more normal levels” and its next opportunity to do that was when it released its next monetary policy statement on August 18, Orr said.

The comment could be interpreted as suggesting the Reserve Bank is not yet completely sold on OCR hikes, and – as Zollner indicated – saw mortgage controls as something of an alternative.

National Party shadow treasurer Andrew Bayly said the Government was tinkering with monetary and financial stability policy but that would do nothing to address rampant house price inflation.

“The Government’s real focus should be on removing the barriers to building new houses,” he said.

“As the Reserve Bank governor himself said before being corralled by the Minister of Finance, the real challenge with the housing market is a lack of supply and the factors preventing building, such as access to the land and planning rules.”

I think you worry to much.

History shows deflation follows a major pandemic.

You have it confused with war, inflation follows war.

And quoting the socialist STUFF media publication on a capitalist trader forum doesn't help.

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Originally Posted by TeslaGod

I think you worry to much.

History shows deflation follows a major pandemic.

You have it confused with war, inflation follows war.

And quoting the socialist STUFF media publication on a capitalist trader forum doesn't help.

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What an odd response from you.

Quoting "the socialist STUFF media publication"? The quotes in the article are from the Reserve Bank deputy governor. He states that there has been risky lending going on. What an extraordinary admission. 'Subprime' has been going on in NZ, and now we have the proof.

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Originally Posted by TeslaGod

I think you worry to much.

History shows deflation follows a major pandemic.

You have it confused with war, inflation follows war.

And quoting the socialist STUFF media publication on a capitalist trader forum doesn't help.

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Not much "deflation " going on at the moment .....
https://www.cnbc.com/2021/07/16/new-...-a-decade.html

"Subprime" It's New Zealand ... not The Big Short ,I doubt there is going to be mortgagee sales,I mean we're are we going live?

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Originally Posted by stoploss

Not much "deflation " going on at the moment .....
https://www.cnbc.com/2021/07/16/new-...-a-decade.html

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It's going to pass.

And considering this is a trader forum, inflation is good for shares..so why all the complaining?

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Originally Posted by TeslaGod

It's going to pass.

And considering this is a trader forum, inflation is good for shares..so why all the complaining?

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I wasn't complaining , just pointing out that your comment "deflation follows a major pandemic" is looking wrong as evidenced by the latest CPI numbers .

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Originally Posted by stoploss

I wasn't complaining , just pointing out that your comment "deflation follows a major pandemic" is looking wrong as evidenced by the latest CPI numbers .

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Inflation will begin to slow by the end of the year or early 2022, As in past historical pandemics deflation follows for the following 20 years.

Such complacency in the responses. Either being dismissive or posting red herrings seems to be the way to go. It wasn't STUFF making the comments on risky lending, it was the second in command at the Reserve Bank.

I also have to laugh at the comments about so-called 'capitalism'. Under capitalism saving is supposed to the be the engine-room, the driver fueling investment & growth. This joke zombiefied system that we have had foisted on us since the GFC is just about constant interest rate suppression and state money printing, and savers can go to hell.

The definition of 'capitalism' in NZ seems to be 'a bunch of good buggers reaping huge capital gains off the housing market', and 'socialism' is 'a bunch of bludgers sitting on the benefit - no wonder they can't get ahead'.

Now we have a Reserve Bank who are supposed to be keeping inflation within a set band, and now it pops up to 3.3% suddenly the government hands them additional tools to 'deal with housing', and we have government ministers such as Stuart Nash talking about "loooking through" inflation.
Translation: the so-called 'independent' Reserve Bank will ignore their inflation mandate (hand in glove with the government) and again favour housing asset owners over everyone else.
But now they are trying to get a camel through the eye of a needle: they need to keep house prices rising moderately, while decreasing the pool of buyers, while checking inflation, while dealing with a rent crisis, while meeting the aspirations of young first home buyers. In other words, they need to do the impossible.

@Logan Nine fingers.

This is share trader forum

You know, Shares in multi billion dollar companies.
Debt, investment,risk , interest rates,margin, freemarket ,greed and all the things that capitalism is.

Interest.co.nz and the comments section of stuff media is the ideal place for your ideology.

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Originally Posted by Logen Ninefingers

Such complacency in the responses. Either being dismissive or posting red herrings seems to be the way to go. It wasn't STUFF making the comments on risky lending, it was the second in command at the Reserve Bank.

I also have to laugh at the comments about so-called 'capitalism'. Under capitalism saving is supposed to the be the engine-room, the driver fueling investment & growth. This joke zombiefied system that we have had foisted on us since the GFC is just about constant interest rate suppression and state money printing, and savers can go to hell.

The definition of 'capitalism' in NZ seems to be 'a bunch of good buggers reaping huge capital gains off the housing market', and 'socialism' is 'a bunch of bludgers sitting on the benefit - no wonder they can't get ahead'.

Now we have a Reserve Bank who are supposed to be keeping inflation within a set band, and now it pops up to 3.3% suddenly the government hands them additional tools to 'deal with housing', and we have government ministers such as Stuart Nash talking about "loooking through" inflation.
Translation: the so-called 'independent' Reserve Bank will ignore their inflation mandate (hand in glove with the government) and again favour housing asset owners over everyone else.
But now they are trying to get a camel through the eye of a needle: they need to keep house prices rising moderately, while decreasing the pool of buyers, while checking inflation, while dealing with a rent crisis, while meeting the aspirations of young first home buyers. In other words, they need to do the impossible.

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Well said.

As for TeslaGod. Most people in NZ do not invest in shares or have a clue about it. Instead like yourself, they use houses as a tool for financial gain (without considering who pays for the cost in society). I dunno about you but I don't like to leave people behind just because you can own houses, and your friend can't even own their 1st home.

If you don't feel that you're a product of the housing problem in NZ, then I would say that's a pretty selfish way of thinking.

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Originally Posted by TeslaGod

@Logan Nine fingers.

This is share trader forum

You know, Shares in multi billion dollar companies.
Debt, investment,risk , interest rates,margin, freemarket ,greed and all the things that capitalism is.

Interest.co.nz and the comments section of stuff media is the ideal place for your ideology.

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So how is the 'freemarket' in evidence when we have interest rate suppression by the state & state money printing? I think you have a strange idea of what constitutes a free market. Trust me, that ain't a free market.

If you want to comment on shares, go comment on shares.

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Originally Posted by Logen Ninefingers

So how is the 'freemarket' in evidence when we have interest rate suppression by the state & state money printing? I think you have a strange idea of what constitutes a free market. Trust me, that ain't a free market.

If you want to comment on shares, go comment on shares.

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Because you have access to extra capital to "freely" buy or invest into what you want.
"Free"market, your risk your reward.

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Originally Posted by SBQ

Well said.

As for TeslaGod. Most people in NZ do not invest in shares or have a clue about it. Instead like yourself, they use houses as a tool for financial gain (without considering who pays for the cost in society). I dunno about you but I don't like to leave people behind just because you can own houses, and your friend can't even own their 1st home.

If you don't feel that you're a product of the housing problem in NZ, then I would say that's a pretty selfish way of thinking.

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Complaining about housing affordability doesn't buy you a home.

Figure out how to get a deposit and buy one.

No excuses.

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Originally Posted by TeslaGod

Because you have access to extra capital to "freely" buy or invest into what you want.
"Free"market, your risk your reward.

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What risk? You are having a laugh surely. You'd be the first person crying for a bail-out!!

https://www.stuff.co.nz/business/125...mployment-to-4

Record drop in unemployment to 4%
Tom Pullar-Strecker
10:48, Aug 04 2021

The unemployment rate has plummeted to 4 per cent, putting more pressure on the Reserve Bank to raise interest rates in a fortnight's time.

"Get a deposit, take on a million dollars of debt, then watch as interest rates steadily start to rise. DO IT!!!!" - great advice from the 'risk taker'.

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Originally Posted by Logen Ninefingers

"Get a deposit, take on a million dollars of debt, then watch as interest rates steadily start to rise. DO IT!!!!" - great advice from the 'risk taker'.

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Inflation erodes the debt.

Heh, heh, all these 'capitalists' talking about how they are 'taking on risk' by going all-in on the property market - and if interest rates start steadily rising and defaults start happening they will be crying for bail-outs!!
'Risk' means taking on risk i.e. the risk that something won't work out and you will lose.
Anything else - such as a scenario where you constantly expect the Government & Reserve Bank to come racing to your rescue - is not taking on risk at all.

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Originally Posted by TeslaGod

Inflation erodes the debt.

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It was only a few posts back that you told us "As in past historical pandemics deflation follows for the following 20 years."
Have you changed your mind already ?

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Originally Posted by stoploss

It was only a few posts back that you told us "As in past historical pandemics deflation follows for the following 20 years."
Have you changed your mind already ?

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No ,that's we're lower interest rates or negative interest play there part.

Over time that is.

Short term inflation follows pandemics.

This doesn't last long then deflation follows.

Interest rates are then lowered, your purchasing power erodes

And so does your debt.

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Originally Posted by TeslaGod

Short term inflation follows pandemics.

This doesn't last long then deflation follows.

Interest rates are then lowered, your purchasing power erodes

And so does your debt.

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Sounds like you a making up a narrative to suit yourself, while inserting an element of truth in the fact that we now have mounting inflation.

If you think that benevolent NZ businesses will give everyone a whopping pay-rise each year to keep pace with inflation, I think you are mistaken. My feeling is they will look to economise.

Good luck paying off a million dollar mortgage while trying to pay for rising food & petrol prices....and then add a possible job loss in the mix.

Anyway, the 'all-in on property' people have it all covered: deflation will be great for them apparently, inflation will be great for them apparently.....if they have it all figured out, why do they always need to have the Government and Reserve Bank step in every time in looks like prices might fall? Let the market fuction as a market I say. If prices fall, so be it.

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Originally Posted by Logen Ninefingers

Sounds like you a making up a narrative to suit yourself, while inserting an element of truth in the fact that we now have mounting inflation.

If you think that benevolent NZ businesses will give everyone a whopping pay-rise each year to keep pace with inflation, I think you are mistaken. My feeling is they will look to economise.

Good luck paying off a million dollar mortgage while trying to pay for rising food & petrol prices....and then add a possible job loss in the mix.

Anyway, the 'all-in on property' people have it all covered: deflation will be great for them apparently, inflation will be great for them apparently.....if they have it all figured out, why do they always need to have the Government and Reserve Bank step in every time in looks like prices might fall? Let the market fuction as a market I say. If prices fall, so be it.

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-I don't write the narrative, the narrative writes itself

-I can easily pay off a million dollar mortgage in 5 to 7 year's by re-investing it's equity and capital growth.

-I totally agree that the housing market should fall I have access to liquidity and would love to pay cash for property on discount but I agree it's not going to happen.

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Originally Posted by TeslaGod

-I don't write the narrative, the narrative writes itself

-I can easily pay off a million dollar mortgage in 5 to 7 year's by re-investing it's equity and capital growth.

-I totally agree that the housing market should fall I have access to liquidity and would love to pay cash for property on discount but I agree it's not going to happen.

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I want to see interest rates start to rise, and then rise. The pot is on the element and we are starting to see some bubbles drifting up through the water. So we shall see what we will see. I want to see all these people who talk about happy they are happy to take on risk & deserve all the capital gains that are coming to them....I want to see if they truly are happy to take on risk & how they deal with capital losses. It's all very well to crow about how well you are doing & how it's all richly deserved and stuff the renters, 'bludgers', savers, and the young ("they just need to scrimp and save like we did and they will be in a million dollar house in no time") but how will these "I'm all right Jack" types perform when the squeeze comes on? Will they manfully face the consequences of their own decisions, or squeal for the government to save them?

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Originally Posted by Logen Ninefingers

I want to see interest rates start to rise, and then rise. The pot is on the element and we are starting to see some bubbles drifting up through the water. So we shall see what we will see. I want to see all these people who talk about happy they are happy to take on risk & deserve all the capital gains that are coming to them....I want to see if they truly are happy to take on risk & how they deal with capital losses. It's all very well to crow about how well you are doing & how it's all richly deserved and stuff the renters, 'bludgers', savers, and the young ("they just need to scrimp and save like we did and they will be in a million dollar house in no time") but how will these "I'm all right Jack" types perform when the squeeze comes on? Will they manfully face the consequences of their own decisions, or squeal for the government to save them?

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This post tells me alot

Anger
Hate
Envy

I believe the narrative is I'm supposed to be Im the greedy evil landlord?

Not really,I'm the capitalist who coaches my kids sports teams,the capitalist who donates to my preferred charity and sports organisation, the capitalist that doesn't have any anger ,hate or ill will towards others.

I guess it's how one chooses to see the world.

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Originally Posted by TeslaGod

This post tells me alot

Anger
Hate
Envy

I believe the narrative is I'm supposed to be Im the greedy evil landlord?

Not really,I'm the capitalist who coaches my kids sports teams,the capitalist who donates to my preferred charity and sports organisation, the capitalist that doesn't have any anger ,hate or ill will towards others.

I guess it's how one chooses to see the world.

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Are you really a 'capitalist' though? You claim to be, but do you want the Government and Reserve Bank to go 'hands off' with the housing market and let the 'free market' sort it out?

I want the Government and Reserve Bank to go 'hands off' with the housing market and let the 'free market' sort it out. No more interest rate suppression, no more money printing, no more deposit grants, no more landlord subsidies. That is capitalism!!

I class myself as much more of a capitalist than you. You are more like a profiteer who has joined with a group of your fellows to try and hold the country to ransom.

Stage 3 of a Bubble -

Euphoria
During this phase, caution is thrown to the wind, as asset prices skyrocket. Valuations reach extreme levels during this phase as new valuation measures and metrics are touted to justify the relentless rise, and the "greater fool" theory—the idea that no matter how prices go, there will always be a market of buyers willing to pay more—plays out everywhere.

For example, at the peak of the Japanese real estate bubble in 1989, prime office space in Tokyo sold for as much as $139,000 per square foot. Similarly, at the height of the Internet bubble in March 2000, the combined value of all technology stocks on the Nasdaq was higher than the GDP of most nations.



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Originally Posted by Logen Ninefingers

Are you really a 'capitalist' though? You claim to be, but do you want the Government and Reserve Bank to go 'hands off' with the housing market and let the 'free market' sort it out?

I want the Government and Reserve Bank to go 'hands off' with the housing market and let the 'free market' sort it out. No more interest rate suppression, no more money printing, no more deposit grants, no more landlord subsidies. That is capitalism!!

I class myself as much more of a capitalist than you. You are more like a profiteer who has joined with a group of your fellows to try and hold the country to ransom.

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Yes capitalism is profiteering so I'm not sure of your statement.

And I do hope the housing market crashes unfortunately for you, individuals and companies like myself would most likely price you out, sorry about that.

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Originally Posted by TeslaGod

Yes capitalism is profiteering so I'm not sure of your statement.

And I do hope the housing market crashes unfortunately for you, individuals and companies like myself would most likely price you out, sorry about that.

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You seem to think that people are incapable of building wealth outside of the socially and economically destructive housing rort.

If you think that profiteering = capitalism, then that explains a lot about your attitude.

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Originally Posted by Logen Ninefingers

You seem to think that people are incapable of building wealth outside of the socially and economically destructive housing rort.

If you think that profiteering = capitalism, then that explains a lot about your attitude.

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I create wealth through multiple ways, property is but one of them.

And yes I have always had a strong driven attitude to achieve my goals so again thank you for the kind compliment.

I love how TeslaGod is calmly and rationally bringing out the crazines in Logen. I wish i was levelheaded like that :D

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Originally Posted by TeslaGod

This post tells me alot

Anger
Hate
Envy

I believe the narrative is I'm supposed to be Im the greedy evil landlord?

Not really,I'm the capitalist who coaches my kids sports teams,the capitalist who donates to my preferred charity and sports organisation, the capitalist that doesn't have any anger ,hate or ill will towards others.

I guess it's how one chooses to see the world.

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You ever look at any of them and think 'holy ****, through no fault of your own you're going to have an absolute mountain to climb in order to own the roof over your head'?. I do.

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Originally Posted by iamaskier

You ever look at any of them and think 'holy ****, through no fault of your own you're going to have an absolute mountain to climb in order to own the roof over your head'?. I do.

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No
But I try to install self belief, and encourage achieving there goals, I'm confident 6 out of 10 will achieve home ownership,if they want it

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Originally Posted by TeslaGod

No
But I try to install self belief, and encourage achieving there goals, I'm confident 6 out of 10 will achieve home ownership,if they want it

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Sometimes I wish I had the ability to discount/ disregard objective data too. Good for you I suppose. Be boring if we were all the same. GL for the season.

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Originally Posted by iamaskier

Sometimes I wish I had the ability to discount/ disregard objective data too. Good for you I suppose. Be boring if we were all the same. GL for the season.

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What is objective data? You see in the future? There might be rapid price rise, crash, or 10 year flatline. Nobody knows.

NZ has so many options to solve housing crisis, the only problem standing in the way of resolution is the government... doesn't really matter which side either.

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Originally Posted by peetter

What is objective data? You see in the future? There might be rapid price rise, crash, or 10 year flatline. Nobody knows.

NZ has so many options to solve housing crisis, the only problem standing in the way of resolution is the government... doesn't really matter which side either.

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DTIs for instance are objective. But on that basis - given none of us have crystal balls - why would we ever consider the future at all? This doesn't really align with the future-oriented concept of investing though haha.

I agree with your second point. Government holds the keys (couldn't help it) to the solution(s).

Having researched speculative mania's, it is part of phenomenon to lampoon those who keep their heads as 'crazy'.

Higher interest rates are on their way. Good luck speculators!

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Originally Posted by Logen Ninefingers

Having researched speculative mania's, it is part of phenomenon to lampoon those who keep their heads as 'crazy'.

Higher interest rates are on their way. Good luck speculators!

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I purchasd most of my property when interest rates were 5% +. Rents have increased and my debt has decreased.

Higher interest will only lock out first home buyers, because prices won't decrease ,mortgage serviceability will increase.

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Originally Posted by TeslaGod

I purchasd most of my property when interest rates were 5% +. Rents have increased and my debt has decreased.

Higher interest will only lock out first home buyers, because prices won't decrease ,mortgage serviceability will increase.

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So higher interest rates surely the serviceability for a first home buyer will Decrease ?

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Originally Posted by stoploss

So higher interest rates surely the serviceability for a first home buyer will Decrease ?

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My bad , bank's will likely increase ( if they haven't already) serviceability test rates.In other words they will require more income,as most first home buyers are on entry level incomes this will lock them out for now anyway, but I always say there's always a way to break through.

You just have to solve the problem in front of you.

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Originally Posted by TeslaGod

My bad , bank's will likely increase ( if they haven't already) serviceability test rates.In other words they will require more income,as most first home buyers are on entry level incomes this will lock them out for now anyway, but I always say there's always a way to break through.

You just have to solve the problem in front of you.

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Just for your guide the first home buyers I see in Wellington paying around a mil, some more are Absolutely Positively not on “entry level incomes”.

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Originally Posted by stoploss

Just for your guide the first home buyers I see in Wellington paying around a mil, some more are Absolutely Positively not on “entry level incomes”.

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Yes I invest in Wellington here's my reason why are bought multiple properties 6 to 8 years ago.

-House prices didn't move when I was buying then , They were flat for 8 years .

- Wellington is in a gorge with very little land supply

-I predicted when National would eventually get turfed out of power leading the way for highly paid government bureaucrats from an incoming socialist government to flood Wellington pushing up house prices.

Those properties were a great investments.

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Originally Posted by TeslaGod

Yes I invest in Wellington here's my reason why are bought multiple properties 6 to 8 years ago.

-House prices didn't move when I was buying then , They were flat for 8 years .

- Wellington is in a gorge with very little land supply

-I predicted when National would eventually get turfed out of power leading the way for highly paid government bureaucrats from an incoming socialist government to flood Wellington pushing up house prices.

Those properties were a great investments.

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Wellington has rocketed recently. Do you have a trustworthy property manager for them?

Yes, and Wellington has been rocketing for the past 6 years.

I'm confident that it is coming to an end as all boom's do,if National get into power in 2023 I wouldn't be surprised if Wellington house prices stagnant for up to a decade.

Young people will have plenty of time to buy then, I have seen it all before.

Remember when I could buy 5 aniseed balls for a penny at the corner diary

Wonder what they cost now?

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Originally Posted by winner69

Remember when I could buy 5 aniseed balls for a penny at the corner diary

Wonder what they cost now?

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The 5 aniseed balls value is the same, your purchasing power has decreased..or 1 penny had a lot more purchasing power than a 10c coin of 2021.

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Originally Posted by winner69

Remember when I could buy 5 aniseed balls for a penny at the corner diary

Wonder what they cost now?

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I'm still amazed how NZ has a large culture of seniors that insist putting their cash in term deposits. If inflation has any reckoning, consider how much other asset classes (shares and houses) have gone up vs those that kept their $ in the bank collecting measly 1-2% p.a. returns.

I'm not saying cash is bad but over a year ago we've had some stellar opportunities to invest into houses and shares. I've moved almost all my liquid cash reserves during in early 2020 into equities which resulted in considerable gains. The old people I know living back in Canada know the value of money - they typically view cash in the bank is a waste of time and only have 'sufficient' amounts there for monthly living expenses. The vast majority of their wealth is invested in stocks - a very different mix to what I see in NZ.

Today it was announced our only oil refinery is closing, to go with the closure of the Norske Skog paper mill in Kawarau, Methanex mothballing their Waitara Valley plant, and New Zealand Steel reducing production. Meanwhile New Zealand is likely to import more coal this year than it has in any other year, in the midst of a government-declared climate emergency.

As our strategic industries close down & our dependence on imported energy increases, at least we can take comfort in our state-sponsored, debt fuelled ‘housing market’ - which draws more lemmings into a colossal bubble every day.

The emperor has no clothes. The lemmings cannot connect the dots it seems.