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  1. #171
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    Grant Robertson is weak.

    https://www.nzherald.co.nz/business/...P6CGHGDGYCHUI/
    https://www.stuff.co.nz/business/300...decisionmaking

    He is asking Adrian Orr to consider housing when making monetary policy decisions. How vague is that? It comes across as so lame and gutless it is infuriating.

    How about getting rid of targeted inflation, that is something more concrete.

    Or possibly talk to stats nz or whoever compiles the CPI. The figures I have are out of date but purchasing a home comprises 5.42% of that index, rent 9.12%, Alcoholic beverages & tobacco 7% Recreation & Culture 9.51%. If your house or rent is 50% or more of your weekly budget perhaps it deserves a much higher weighting in the CPI than alcohol. That would give Adrian a challenge with his inflation target if house costs and rents made up 50% of the basket of goods.

    I would expect such a weak response from a National government but it is disappointing coming from labour.
    Last edited by Aaron; 25-02-2021 at 03:29 PM.

  2. #172
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    I'm pitying Adrian now - juggling all those balls - interest rates, employment, house prices. He'll need to be some new variety Superman!


  3. #173
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    Quote Originally Posted by macduffy View Post
    I'm pitying Adrian now - juggling all those balls - interest rates, employment, house prices. He'll need to be some new variety Superman!

    I am sure he already considers house prices when setting monetary policy so nothing has changed for him in reality. The reserve bank has already predicted a 22% rise in house prices for 2021 so he is obviously already considering them.

    This is just Robertson and Labour pretending they are trying to address the issue of house prices and inequality without actually doing anything.

    https://www.interest.co.nz/property/...rice-inflation

    With a prediction of 22% for 2021 for house prices I wonder how this fits in with the main reserve bank mandate of price stability and a sound & efficient financial system. My idea of price stability differs to what I am seeing and reading but I lack the intelligence of Adrian Orr or Grant Robertson.

    Perhaps they should clarify what a "sound and efficient financial system" looks like. They aren't blowing a housing bubble provided they can inflate away the debt I suppose. Perhaps it is an efficient way to ensure growing inequality.

  4. #174
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    Quote Originally Posted by Aaron View Post
    I am sure he already considers house prices when setting monetary policy so nothing has changed for him in reality. The reserve bank has already predicted a 22% rise in house prices for 2021 so he is obviously already considering them.

    This is just Robertson and Labour pretending they are trying to address the issue of house prices and inequality without actually doing anything.
    Hopefully the majority of the population will start judging Robertson and Ardern based upon outcomes, rather than the platitudes being espoused about the housing market. Campbell pushed Robertson this morning on that very issue and he became visibly uncomfortable. We need results from this self-declared transformative government, and fast.

  5. #175
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    Quote Originally Posted by Zaphod View Post
    Hopefully the majority of the population will start judging Robertson and Ardern based upon outcomes, rather than the platitudes being espoused about the housing market. Campbell pushed Robertson this morning on that very issue and he became visibly uncomfortable. We need results from this self-declared transformative government, and fast.
    Not likely Labour brought in the shift to neoliberal policies and capital over labour, not likely they will change back. Here is someone else's view although some pretty dodgy articles on this site.

    https://www.zerohedge.com/markets/la...onse-kiwi-nces

  6. #176
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    Quote Originally Posted by macduffy View Post
    I'm pitying Adrian now - juggling all those balls - interest rates, employment, house prices. He'll need to be some new variety Superman!

    Yeah Govt passing the buck ..such a weak GOVT if only talking could fix housing issues Labour -Greens would be world leaders in fixing housing issues

    Great at slogans getting votes not so good at actual delivering anything
    People don't have ideas, ideas have people

  7. #177
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    No doubt they will be accused of being communist, but probably more like dictatorship. I was suggesting Labour were weak earlier on this thread. Since then denying interest deductions (I have already said I think it is unfair and inconsistent but palatable if new builds get to keep the interest deduction) and extending the bright line test. More aggressive but not at the heart of the problem, monetary policy. Possibly a move away from neoliberalism and more central control is being heralded by the article below. Either that or it is not just me thinking that Adrian Orr comes across as being one of the lesser responsible person in charge of the financial system.

    https://www.nzherald.co.nz/business/...KUNLMY3YUYOTY/

    I think separating the central bank from government was because politicians could not be relied on to be responsible with the printing press. 30 years of lower interest rates and easier money would indicate even an independent central bank can't help itself. What is the solution to the next crisis? My guess is more money and negative interest rates why limit asset prices with pesky interest rates.

  8. #178
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    Ashley Church is concerned about the changes. Since 1989 he has looked like a financial genius by borrowing and buying houses so any change to the trend for the last 30 years would make home look like an idiot if he is still overleveraged.

    It might also make his criticism of the Reserve Bank LVR restricting first home buyers look stupid as well. I am sure Mr Church has done well out of monetary policy over the last 30 odd years and credits himself as a hard working financial genius. He would like to see it continue by allowing new home buyers to borrow even more to keep things going. Lower interest rates more money has worked well until now,why wouldn't it continue forever?

    Legendary work from the reserve bank on inflation over the last thirty years? I think exporting jobs to countries with low labour costs so we can buy back at lower prices and keep inflation low has been great? Having house prices rise at double the rate of wages would also make him happy no doubt. Having a CPI that may not reflect a normal persons budget might also help. Alcohol & Cigarette costs have a similar weighting as rent. This might be a good reflection for some families but not most.

    https://www.oneroof.co.nz/news/39327

  9. #179
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    @Aaron

    I agree the housing affordability is a mess. But let's be mindful NZ is a small nation and it's choices are limited in terms of investments. The article is not biased adjusted in terms of inflation figures. As the principle amount on houses always rise (due to inflation), the % mortgage rates will continue to go down over multi-decade time frames. Can you imagine what 20% mortgage rates would be on a $1.5M house in Auckland? Think about it, 1978 is entirely different to the past 20 years - we have not seen hyperinflation yet.

    Mr Church also neglects the fact that 1st time home buyers are unaffected by these changes in LVR. What Mr Church should be arguing about is how the average millionaire in NZ has become so rich solely on investing in residential / real estate properties. A far cry difference compared to the millionaires created in N. American through stock market investments in retirement planning. The NZ Reserve Bank is not to blame but if you ask me to compare. Well the NZRB has made people in NZ rich off buying houses vs in the US, the US Fed has made people rich from rises in the stock market. Talk about wealth inequality!

    There's a lot of things wrong in NZ in terms of financial inequity. As in my other posts in other threads, the key problem in NZ lies in un-fair taxation. Those choosing to buy houses and holding for 10 or 30 or 40 years will definitely get the benefit of tax free capital gains. Those that choose to buy Kiwi Saver funds (as much as the FMA promotes how good they are) will only retire an average life - if they can contribute enough. The KS funds even in PIE, after paying annual mgt fees, FIF / FDR, and taxes on dividends RWT, will result in the individual having less at retirement than the leveraged approach to buying a 2nd home.

    Labour Party was not serious about widening the investment landscape for NZders. No NZ Political party has (after all FIF was introduced by Bill English). When you look at 20% of expat NZ citizens living abroad - there is good reason why.

  10. #180
    FEAR n GREED JBmurc's Avatar
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    Quote Originally Posted by SBQ View Post
    @Aaron

    I agree the housing affordability is a mess. But let's be mindful NZ is a small nation and it's choices are limited in terms of investments. The article is not biased adjusted in terms of inflation figures. As the principle amount on houses always rise (due to inflation), the % mortgage rates will continue to go down over multi-decade time frames. Can you imagine what 20% mortgage rates would be on a $1.5M house in Auckland? Think about it, 1978 is entirely different to the past 20 years - we have not seen hyperinflation yet.

    Mr Church also neglects the fact that 1st time home buyers are unaffected by these changes in LVR. What Mr Church should be arguing about is how the average millionaire in NZ has become so rich solely on investing in residential / real estate properties. A far cry difference compared to the millionaires created in N. American through stock market investments in retirement planning. The NZ Reserve Bank is not to blame but if you ask me to compare. Well the NZRB has made people in NZ rich off buying houses vs in the US, the US Fed has made people rich from rises in the stock market. Talk about wealth inequality!

    There's a lot of things wrong in NZ in terms of financial inequity. As in my other posts in other threads, the key problem in NZ lies in un-fair taxation. Those choosing to buy houses and holding for 10 or 30 or 40 years will definitely get the benefit of tax free capital gains. Those that choose to buy Kiwi Saver funds (as much as the FMA promotes how good they are) will only retire an average life - if they can contribute enough. The KS funds even in PIE, after paying annual mgt fees, FIF / FDR, and taxes on dividends RWT, will result in the individual having less at retirement than the leveraged approach to buying a 2nd home.

    Labour Party was not serious about widening the investment landscape for NZders. No NZ Political party has (after all FIF was introduced by Bill English). When you look at 20% of expat NZ citizens living abroad - there is good reason why.
    Its not just limited safe investments in NZ ... but costs of Land...high subdivision costs / monopoly of building products .. greedy tradies ...
    If we could build nice new houses for a fair amount Vs average household NZ incomes then we wouldn't have a run away housing market

    average annual NZ household disposable income (after tax and transfer payments) was $81,934...so using fair housing values 5x times = $405k

    ultra low interest rates have also of course allow this to ballon... with everyone jumping on board
    Last edited by JBmurc; 28-04-2021 at 10:55 PM.
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