Editors choice comments
So we need to shift to an elevated part of Northland?
Joking aside, very sensible and I would expect that location differentials will in future be applied to other risks. Low lying properties near the coast?
RBNZ: pls note the high return to equity of banks in nothing to brag about, it is a failing.
A return on equity of 18.6%, means they are overleveraged, or underpaying depositors, or both.
With that return to equity they can fund high credit growth of 9% and pay a 4% imputed dividend.
Being able to fund 9% credit growth is causing NZ issues, so perhaps time for RBNZ to impose a countercyclical buffer.
Auckland has seen 20% reduction in sales recently. If most of those sales lost are from investors vanishing from market (40% sales were to investors in auckland, far more than elsewhere) everything else stays the same YOU WILL SEE LOWER QUARTILE FIGURE INCREASE.
Likewise, more sales to investors will lower the lower quartile figure.
Only use indexed data to make conclusions on price changes.
RBNZ would target DTI at "investors":
They say: "An important feature of a DTI policy is that the borrowing capacity of constrained borrowers grows in line with their incomes. In contrast, sharp rises in house prices unlock borrowing capacity for existing property owners under an LVR policy, especially for borrowers with a large portfolio of property. "
They have previously said (2015) that by contrast to high income borrowers and investors, the share of high TDTI lending is much lower for first home buyers.."
Expect the DTI ratio to be about 5.5 to 6, which will likely affect very high...by: Peri
You have to give it to them for gall. Effectively encapsulating their Chernobylesque liabilities into a concrete tomb of a special purpose company ... that purpose being default, phoenix company, and to force the hand of the government (muggins taxpayer, here).
How can this possibly be permitted? Bus tickets are being dampened as we write.
It's time to let market forces prevail and clean out the stock holders. This one's a dog, and it needs putting out of its misery.
"the insurable values of the whole world are worth more than all the money in the world" Yes indeed. But the assets don't all fall down at the same time. One in a thousand local houses burn down say. Which is why we all pay insurance - a contribution we don't expect to get back. But if necessary we get a lot back.
Entire cities fall down only occasionally. But the vast majority don't. Which is what internationally based reinsurance is for.
All our local companies need to charge enough to cover local mishaps. And reinsure enough to cover the disasters. And they should be required to...by: KH
@ The Man and Gordon....
Just a suggestion guys...
Why don't you both swap email addresses and have your on-going (and seemingly pointless) battle offline from this forum.
I for one am sick to death of it....
The cheap shots are just derailing any pertinent comment about the actual issues.
Can you both give that a thought?
Two basic and common misunderstandings are on display here.
One is the difference between a projection and a forecast. What Treasury has produced here are projections, ie what is likely to happen if nothing changes and everything continues along the same direction and at the same rate it is now. They demonstrate the need for change, they do not predict what changes there will be.
The other is that forecasting is easier in the short term than in the long term. That's actually a##e-about-t#t. The short term is influenced by minor random noises and variables, whereas the long term follows a...by: Ms de Meanour
Whatever way you look at it, why does this fill me with a sense of unease? So if Key is correct, and Treasury can't get it right, what's to stop the debt forecasts being wrong---and being on the high side? And why is he undermining Treasury's work in such a public way?
Ah, I forgot. Elections are coming up soon. Can't scare the basket of deplorables.
I think globalisation and immigration are too often blamed for a lack of low skill jobs when it is actually technology at 'fault'. Even if cars were built in the US I'm sure they would be looking at using robots instead of labour unless labour was incredibly cheap.
So you can't be bothered to wade through 44 pages of references, to form you own conclusion but you want this web site to spoon feed a few facts to you in an unbiased way, presumably so as to not contradict your own preconceived ideas on him. You state "I don't want to hear he is racist" well 5 minutes with google should give you a a fair idea on that matter.
The behaviour of Trump, the speeches and comments he has made over that last year or so, and the historical stuff outlined in the article above, are not those of a normal individual but of a dangerous narcissist. It is hard to fathom...by: Macadder
ANZ haven't been competing in advertised rates for a while now. I think their Aussie parents have asked them to stop taking on risk. That 3 yr rate is atrocious.
The NZ Herald is an unabashed property spruiking publication - hardly a coincidence when a large portion of their revenue is from real estate advertising.
To be running these "now is your chance" articles reeks of desperation.
Keep up the good work interest.co.nz team - best finance, property and insurance reporting website in NZ by a country mile.
by: Zombie ponzi
Asset and income testing sounds good in theory, but in reality only catches the paye earner and unsophisticated. Trusts (both local and foreign), income left in companies (owned by the trust) , toss in migrants from countries where we have no recipricol agreements, then add gifting and false invoicing to associates and family .................and suddenly it's not so simple.
Great job creation scheme for lawyers and accountants though, so expect to see some professional support for the idea.
If such an economically important country as America drops the company tax to 15%, surely a lot of governments around the world will be forced to follow suit?, negating the proposed advantage for America.
The author appears a bit (American exceptionalism) insensitive to what large changes in American fiscal policy might do to other countries or the environment,(Trump does not care, of course).
I spoke to an agent at an empty open home yesterday who made me laugh as she tried to convince me and herself that the market wasn't dying. She called it a "sideways up" market (whatever that means) then said that all was not lost as the Americans were all going to flood in now with their dollars, buying up New Zealand. I didnt have the heart to remind her that they need 160 points to get residency now and that the Brits interest peaked after Brexit but they didn't follow through with applying. It's just all hot air like the endless supply of 'overseas buyers' dumping their money - they were...by: buzby
What a basket of deplorables. A banker who manages a tax haven, and the owner of a company that targets certain political content to users.
Great article exactly what nz needs...
Investors need to be encouraged to invest in start ups and away from real estate if the country wants to improve its gdp per capita. Tax incentives are an excellent way
UK has the eis scheme where you can deduct 30% of initial investment off your tax bill and another 30% if the firm goes bust.
by: Joe Public
I think thats the most tragic thing for those who voted Trump / Brexit, that they have no solutions , only pretty slogans. I hope they are not the biggest losers out of this mess. Only time will tell.
yes,we used to laugh at the houses in coronation street and now we are paying a million dollars to live in them in auckland.
QV statistics rely on completed and settled transaction data
In 3 months time the QV stats will show a huge decline in volume of settled deals
Government will claim credit - say RBNZ rules are working
Nothing more needs to be done
by: two otherguys
Note that the embargo for some house insurer stretches from Ashburton to Tauranga - about half of the country