I cannot understand why house mortgage interest rates can't be fixed at 5% permanently. Housing does not contribute to export earnings so why can't the cost of funding housing be stabilized? The sudden increase in repayments for house loans just harms us all and makes a recession. The children don't get fed properly and the stresses cause so much social harm. The cost of this lasts for lifetimes.
Exactly!. the big problem with the use of capital in the NZ economy is that it is focused in the wrong areas - ie, housing, rather than productive assets.
If you made the longer term fixed rates more attractive you might see more pickup, locking in long term at the moment only makes sense for the bank when your paying over the odds for years.
Theoretically higher rates can contribute to higher inflation, the difference will be the standard basket of goods. As people can no longer afford to buy things they'll fall out of the basket until we're left with water, bread, and rent. Hurray higher rates tamed inflation, we just have no stuff.
If the Bank borrows the money to lend to you the customer, why would the interest rate fluctuate once the borrowing transaction has been completed?, you could fix that rate for the term of the loan.
Why can’t I borrow money from the reserve bank?, I mean banks are just middle men that manage the transaction and clip the ticket, then package your mortgage with 10 others and on sell it on the debt market.
There is a high dairy payout this season. Some are cynical enough to say this will result in 20% farm cost inflation that will be felt across all the ag sectors as the hands go in the till. If NZs biggest industrial sector locks down in response it will be a long term reaction across all of rural NZ.
Market returns are not good enough to pay higher interest rate , higher wages or invest. Interest rates coming down are generally inflationary but will the banks lend when government keeps deficit spending. This is a global problem. What happens if the OCR goes back to zero. Hyperinflation and then bang! The system must be changed. However CBDC's are not the answer.
Contact Mike: blog.bnz.co.nz/author/mike-jones
I cannot understand why house mortgage interest rates can't be fixed at 5% permanently. Housing does not contribute to export earnings so why can't the cost of funding housing be stabilized? The sudden increase in repayments for house loans just harms us all and makes a recession. The children don't get fed properly and the stresses cause so much social harm. The cost of this lasts for lifetimes.
That's the point, banks are not for people, they are for profit!
Exactly!. the big problem with the use of capital in the NZ economy is that it is focused in the wrong areas - ie, housing, rather than productive assets.
I got wiped out in mid 80's with 23% !!!
So please - think yourself lucky at todays rates
@@petermilne959823% of $10 is $2.30. 7% of $100 is $7. Wages have not quadrupled. So please STFU about it.
NZs big export is food. But as usual NZ food is cheaper in another country???
If you made the longer term fixed rates more attractive you might see more pickup, locking in long term at the moment only makes sense for the bank when your paying over the odds for years.
Theoretically higher rates can contribute to higher inflation, the difference will be the standard basket of goods. As people can no longer afford to buy things they'll fall out of the basket until we're left with water, bread, and rent. Hurray higher rates tamed inflation, we just have no stuff.
If the Bank borrows the money to lend to you the customer, why would the interest rate fluctuate once the borrowing transaction has been completed?, you could fix that rate for the term of the loan.
Appreciate for the good content
Thank you for your support!
imports are down .. exports are down , economic activities down .. why reserve bank and govt not the people of the country..
Went to Melbourne. Foods were cheaper and much better quality. NZ wine was cheaper there too. No wonder why we lose good workers to OZ.
go to the bank and borrow 100k for sharemarket ..couldn't get the loan , ohh well what is left to invest 🤔
Why can’t I borrow money from the reserve bank?, I mean banks are just middle men that manage the transaction and clip the ticket, then package your mortgage with 10 others and on sell it on the debt market.
There is a high dairy payout this season. Some are cynical enough to say this will result in 20% farm cost inflation that will be felt across all the ag sectors as the hands go in the till. If NZs biggest industrial sector locks down in response it will be a long term reaction across all of rural NZ.
..indeed, really farm values ought, by law, to be set at a proportion of average productive value over, say, a 10-year period.
I wouldn't bank on lower longer term rates. Nz is exposed to international financial uncertainty. Disregard banker hype.
Sooo What’s the Storm ???
Market returns are not good enough to pay higher interest rate , higher wages or invest. Interest rates coming down are generally inflationary but will the banks lend when government keeps deficit spending. This is a global problem. What happens if the OCR goes back to zero. Hyperinflation and then bang! The system must be changed. However CBDC's are not the answer.
It's a house of cards.
We're moving into unknown territory . 6:47