The Coming Mortgage Storm: How NZ Property Will Be Impacted

[@mortgagehq]

Contact Mike: blog.bnz.co.nz/author/mike-jones

[@margaretobrien4851]

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.

[@Adam-o2x2s]

That's the point, banks are not for people, they are for profit!

[@geofflewis8599]

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.

[@petermilne9598]

I got wiped out in mid 80's with 23% !!! So please - think yourself lucky at todays rates

[@solethesis]

​@@petermilne959823% of $10 is $2.30. 7% of $100 is $7. Wages have not quadrupled. So please STFU about it.

[@Xalta_Sailor]

And who is going to fund these long term rates? Government? Too many Kiwis already leech off of the crazy number of government programs. We need to make NZ efficient again by getting rid of government programs and allow Kiwi’s to EARN a better living and invest in business not subsidies and grants for unproductive crap.

[@1JimmyTheOne1]

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.

[@mackenziedog1872]

NZs big export is food. But as usual NZ food is cheaper in another country???

[@rhoothlutz798]

They won't want our dairy exports if this gene therapy technology bill goes through

[@annatetiad.4991]

that is because we do something no other country does 1) tax food and necessity items 2) we do not subsidize farmers to feed Kiwis first. There is no incentive for NZ farmers to sell to Kiwis so we end up paying top dollar for leftovers. Thus, taxpayers funding exports and bringing in cheap imports to feed their own citizens. It's ass backward.

[@PreparedHome]

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.

[@mcgruff3309]

Our best food and wine get's exported overseas!

[@TheContrarianThinker-S0]

@@mcgruff3309 That's always been the case. Back in the 1970s there were businesses specifically set up to sell export-quality meats. Of course, you paid for it! This was when the freezing workers' union was one of two, of the country's most powerful unions, & controlled the economy, to suit their agendas.

[@Peter-kk6rg]

It's a house of cards.

[@paulrea1148]

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.

[@martinleepgg]

I wouldn't bank on lower longer term rates. Nz is exposed to international financial uncertainty. Disregard banker hype.

[@annoyomus-k4m]

imports are down .. exports are down , economic activities down .. why reserve bank and govt not the people of the country..

[@DavidRose-m8s]

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.

[@geofflewis8599]

..indeed, really farm values ought, by law, to be set at a proportion of average productive value over, say, a 10-year period.

[@grizzz6884]

and when john deer get their tarriff for using chinas steel our farmers need to be looking back to the horse

[@grizzz6884]

@@geofflewis8599 hit the nail on the head

[@1JimmyTheOne1]

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.

[@ninaforrester8552]

The banks are leveraging money up to 90% that they borrow from a market that is variable in interest rates. The reserve bank supplies money to back the banks and as you know that money has rates that can change. But say if a bank offered a 20 year mortgage at a fixed rate they would work out what they thought would be the right rate and buy insurance to cover them in the event that they got it wrong. They don't borrow the equivalent amount of money for 20 years. They are creating money with the backing of the RBNZ. At least that's how I think it works.

[@minime8048]

@@ninaforrester8552 Pretty much how it works .. deposit $1, and the bank can lend the same $1 ...90 x`s.. they only have, the $1. That is how Debt is created.. Finding another 90 suckers to lend too is the ez part .. its a legal Pyramid scheme that operates in tandem with the the GOV ( Fungazzi money ) 🤑 Whats not to like 🤗

[@1meanmaorimean1]

Our interest rates are dictated by the US Fed which is a privately owned company, when US FED lowers rates everyone has to follow, or their dollar becomes stronger than the USD making products more expensive, But in that time when USA lower their rates they borrow like crazy for state spending, Then inflation and cost of living gets out of control, so they rise their rates, then re-balance the books. Nz just follows what they do, there is no difference the head of the snakes moves and the other countries follow, Once you step back, the debts are in place, what ever lies they use they will use to in debt a country and their people, its all about enslaving the masses with huge debts, creating huge living cost where the average person will have enough to pay their taxes, their bills and live on nothing, But the funny thing is, the people vote the thieves back in every 3-4 years 🤔

[@minime8048]

Fed : When we say Jump .. you better Jump

[@TheContrarianThinker-S0]

The US FED is a Central Bank; which is a private coalition of the World's bankers. Same as *every other Western Country's institutions, that prints money.* Including our own Reserve Bank!

[@arthurliu423]

Appreciate for the good content

[@mortgagehq]

Thank you for your support!

[@NickyNoGrowth]

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.

[@grizzz6884]

hit the nail on the head

[@annoyomus-k4m]

go to the bank and borrow 100k for sharemarket ..couldn't get the loan , ohh well what is left to invest 🤔

[@ninaforrester8552]

As per usual Kiwis think the path to wealth is through squabbling over housing and neglecting productivity. To pay the bank we need jobs and wealth creation. Private banking debt is around $360 billion and to maintain it to October last year cost 3.9% increase. The path to a wealthy country is not supporting an ever growing financial sector at the expense of infrastructure and health

[@seza1713]

Agree. And property investment should be treated as the business it is.

[@CarolLee-g7w]

Thanks for the breakdown! Just a quick off-topic question: My OKX wallet holds some USDT, and I have the seed phrase. (mistake turkey blossom warfare blade until bachelor fall squeeze today flee guitar). Could you explain how to move them to Binance?

[@TheContrarianThinker-S0]

Scam!!!!!!!!

[@realistically-r7g]

Sooo What’s the Storm ???

[@minime8048]

The expectations side of things . They are to be expected cos they have expectations.. its a bit like the transitory thing J Powell was talking about . Expectations transitory id assume 🤣

[@stephenlaurence8650]

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.

[@EJohnFisk]

We're moving into unknown territory . 6:47

[@minime8048]

It`s life Jim .. but not as we know it 🤔

[@2hands_and_a_brain917]

...the problem is Kiwis aren't financially smart enough to generate money in diverse ways, Thus, they all look to the same mechanisms, and thus suffer the same consequences at the same time for the same reasons. Start teaching fiscal principles at school, reward productivity better, get rid of tall poppy syndrome, import genuinely useful immigrants, get rid of the beneficiary system.

[@minime8048]

importing immigrants.. was to entice them to bring money into the country and Buy the overpriced housing = housing shortage which creates a knock on effect .ie .. construction, trade work, retail, Hospitality, Bank lending . Inflates every thing while they are trying to get cheaper labor ) Its a quick fix. !!. 🤭 They did it, with the islanders invasion in the 70`s, the Asian invasion in the 90`s and the curry muncher invasion in 2000.. Unfortunately leads to bigger problems down the road when shit hits the fan.. Social welfare, ageing, ring a bell ?.. Government overspends as they always do .This will just continue 🤗

[@seza1713]

But this is how the whole economy is set up. It's built on the back of the housing ponzi. It's not the beneficiaries. Unless of course you must. E speaking about the corporate greed and benefits? Socialise the cost of infrastructure and privatise the profit. Charter schools, Radiology, Healthcare, prison system... And they all get grants from the government. That's where the handouts are going.

[@simon-ds1vp]

the old kiwi put as much markup as possible , no wonder immigrant retailers a forcing you guys out of business , kiwi seem to have become lazy greedy and cry baby ,,, try profitability by efficiency ,as for food haha well how much of our produce is sent to India china etc etc to help secure thier food supply , thier is no way in hell its cheeper to ship to Mumbai from pukekohe than to auckland from pukekohe , so were is the disconnect, ,,

[@grizzz6884]

nailed it

[@2hands_and_a_brain917]

Yes, the old greed factor! Kiwis don't understand money and how to manage it properly. They are also lazy, not hungry. They don't really know what a hard time really is! NZ is the easiest economy to make money in, I came here in 2000 with nothing, went through a divorce, paid child support for 15 years and retired with no debt at 57, with a free hold house in Auckland's North Shore and a freehold lifestyle block on the West Coast. How did I do It? Handyman + good business principles and a lot of saving and investing. No new cars, no overseas trips, no nightclubs and no credit card.Now I have all of those things and a good cash reserve invested. I'm no smarter than the average guy, just been educated how to manage money well.

[@minime8048]

@@2hands_and_a_brain917 Congrats, some make it , a lot dont .. But your right , Kiwis do not understand money ..🤑

[@kellyku5404]

Im a kiwi. Not based there anymore it is way easier to make money in alot ofother countries due to the taxes and regulations and lower cost of borrowing s​@2hands_and_a_brain917

[@TheContrarianThinker-S0]

If you want people to read your comments maybe get a basic grasp of English comprehension. Or, at least, some proof reading, before posting. Maybe you are correct; I don't know, as I couldn't understand the gibberish.

[@minime8048]

I got expectations too. Lots of expectations , in fact but that dont mean my expectations will become reality . But its not like your expectations will come reality either . If you want to talk round in circles for 18.39 knock yourself out .. People are paying for over priced rubbish, hoping to dump it on to some one else for a profit ( just like the stock market) And Banks make a killing out of it .. Pump and Dump its all a ruse 🤑..Have a nice expectations Day 🥳