ADRIAN ORR our NEW RBNZ GOVERNOR

[Aaron]

They will most likely let the housing market take a sharp punch in the nose causing a nose bleed before stepping in.

ANZ and other retail banks hold the securities on these mortgages, they don't want it falling into negative equity/I mean they have there annual bonuses to think about.

GOD I'm good.

Time will tell and based on recent history this is the most likely result but as we know predicting the future is not an exact science.

It is unusual for a bank economist not to be cheerleading the housing market. Maybe they are worried that at 30% per annum rises in house prices they will run out of people to lend too. Or maybe the lending gets too risky. Possibly TeslaGod and a few large landlords will have a lot of power when negotiating with the banks when they monopolize the housing and finance market as the plebs slowly drop out of home ownership.

[Panda-NZ-]

NZ Initiative still not impressed with what RBNZ have been doing lately

WALKING THE PATH TO THE NEXT GLOBAL FINANCIAL CRISIS

https://www.nzinitiative.org.nz/repo...s/walking-the/

That initiative looks like a good idea.
Though eric crampton on the board is a concern.

Here's a plan for the initiative.
Increase contributions to the NZ super fund when debt funding costs are low.

It may even appear on NZ's balance sheet as an asset and not "debt".

[Aaron]

Brian Fallow much more diplomatic than myself and I would assume he is much smarter and more informed as well.

https://www.nzherald.co.nz/business/...OXE5HT5DQQ6CA/

The conclusion of the article.

"But I am not avoiding all responsibility." The Reserve Bank's monetary policy committee does set shorter-term interest rates and hence determines the shape of the yield curve. But "the role of the Reserve Bank is a bit part". How much house prices have reacted to changes in housing demand is mostly related to the ability of housing supply to respond, he said.

"Houses have been scarce at a time when demand was strong." But now the reverse situation is evolving, with building at record levels while population growth has been throttled back by the closed border.

All of this is a rather different story from the bank's line when it was easing monetary policy.

Then, the emphasis was on the wealth effect as a channel for transmitting lower interest rates into economic activity, via a boost to asset prices and thence into consumption growth.

Now that the focus is on unsustainable and unaffordable house prices and consumer price inflation is running hot, the story is: "Look, there are lots of influences on house prices, and okay interest rates are one of them, but they are mainly driven by global factors, so don't blame us".

A more edifying message would be that house price inflation has been an unfortunate side effect of monetary policy needed to fend off the danger of a nasty, deflationary, job-killing recession.

Brian doesn't say liar, just implies Adrian is weak person who does not have the cajones to take responsibility for his actions. Which is concerning as he has a lot of power as head of the RBNZ.

[TeslaGod]

Bank of England/Reserve Bank of Australia/Federal Reserve have all left there rates negative and unchanged.

They are expecting as I am inflation to pass through late next year once supply chains free up.

The RBNZ isn't the problem, it's what we pay for property is the problem/All my realestate that I have purchased over the years has been positive cashflow from day 1/

New investors today have no idea what there doing/FHBs are overpaying for property.

Kiwis are creating the problems themselves/bureaucrats are adding fuel to the fire.

Rents are beginning to increase dramatically in my centers/not by greed but by stupidity of everyone pushing up house prices and increased government regulation.

Seriously thinking about selling down atleast half my real estate portfolio and putting millions into the US economy/New Zealand just doesn't get it/we are so small minded.

https://youtu.be/_xNnPXsWX1M

[dobby41]

Bank of England/Reserve Bank of Australia/Federal Reserve have all left there rates negative and unchanged.

RBA - 0.1%
BoE - 0.1%
US - 0%
None of them are negative.

[TeslaGod]

RBA - 0.1%
BoE - 0.1%
US - 0%
None of them are negative.

I knew someone would say that/

There negative in real terms/adjusted

[Aaron]

Bank of England/Reserve Bank of Australia/Federal Reserve have all left there rates negative and unchanged.

They are expecting as I am inflation to pass through late next year once supply chains free up.

The RBNZ isn't the problem, it's what we pay for property is the problem/All my realestate that I have purchased over the years has been positive cashflow from day 1/

New investors today have no idea what there doing/FHBs are overpaying for property.

Kiwis are creating the problems themselves/bureaucrats are adding fuel to the fire.

Rents are beginning to increase dramatically in my centers/not by greed but by stupidity of everyone pushing up house prices and increased government regulation.

Seriously thinking about selling down atleast half my real estate portfolio and putting millions into the US economy/New Zealand just doesn't get it/we are so small minded.

https://youtu.be/_xNnPXsWX1M

Why are people able to pay so much for property? It has been suggested it is because interest rates are so low high house prices are more affordable. Who controls interest rates?

Who would be better off, someone paying top dollar for a house with debt up the yingyang or someone saving for a healthy deposit and hoping the housing market corrects.

If you are right then when rates go negative in the near future, obviously the house owner with debt, will be much better off. The inflation takes care of the debt and pushes up prices further although this may eventually lead to a currency crisis as people finally wake up to the fact "money" is no longer a store of value, in which case the homeowner will still be better off than the renter.

People are encouraged to pay too much because they know, as you know Adrian Orr and the world central banks have got their backs.

I am angry at him because he is the person who should be taking the punchbowl away when people get overexuberant and the RBNZ policies are encouraging people to take on more debt and pay too much. Other people are forced to go out the risk curve because since 2008/09 people have come to realise central banks will do everything in their power to ensure asset prices never fall even if they destroy the current concept of money.

FHBs will applaud your decision to sell half your portfolio. Buy low, sell high always a good idea. Any increase in supply or decrease in demand might soften the rise of house prices.

I know I am small minded but you might be a bit harsh on the rest of the country. What don’t we get?

The Joe Rogan clip was funny, an opinionated American talking about how an opinionated American in NZ was ignored by everyone at the press conference. Joe said it shows Jacinda's power in NZ. What I would have preferred her to do was click her fingers and have a couple of her protection squad take the seppo aside and beat him senseless for being an inconsiderate ahole.

p.s. Dobby in real terms those interest rates are negative. Compared to NZ house prices hugely negative.

I might be better off working than whinging about Adrian and being poor.

[dobby41]

p.s. Dobby in real terms those interest rates are negative. Compared to NZ house prices hugely negative.

Well, there's a silly thought - comparing the OCR to house price growth rate.
It's the OCR, not some term deposit!

[TeslaGod]

Australian yields tumble as BOE makes CORRECT call in not increasing interest rates/looks like both our cousin's economies are going to be positive and strong in 22 (guess we're our new graduates are moving to)

NZ.. meh.

[TeslaGod]

Well, there's a silly thought - comparing the OCR to house price growth rate.
It's the OCR, not some term deposit!

The bank pays interest/settlement /deposit overnight rate based on the OCR.

In real terms minus inflation/tax /fees the OCR rate is several points negative .