PM expects banks to be good corporate citizens and pass on all of OCR in full if they can; Key deflects calls for migration review; says migration needed with 5.2% unemployment; says RBNZ has flexibility with inflation target, but can use LVRs and cut OCR

By Bernard Hickey

Prime Minister John Key has pre-empted any suggestion banks might not pass on all of an expected Official Cash Rate (OCR) cut later this week to mortgage borrowers, saying he expected banks to be good corporate citizens and pass it all on if their borrowing costs were lower.

Economists at ANZ signalled last week they expected banks not to pass on all of an expected 25 basis point cut in the OCR this Thursday, arguing international funding costs were higher. The banks retained about 15 basis points of the 50 basis points of OCR cuts in December and March, while their Australian parents retained 10-15 basis points of last week's Reserve Bank of Australia 25 basis point rate cut. See more in David Hargreaves' piece last week and in David Chaston's call today for new capital risk weighting rules for banks.

"If the Reserve Bank cuts, then we'd like to see the banks pass that on in full if they can," Key told his post-cabinet news conference when asked by an Australian journalist if the banks should pass on any rate cuts.

The decision by Australia's banks not to pass on last week's cuts sparked fresh calls for a Royal Commission of Inquiry there and forced Prime Minister Malcolm Turnbull to require the banks to front up to a Parliamentary committee regularly.

"The only thing that we caution there is to say it's not quite as simple as the base rate and any alteration that might take place when it comes to what a consumer pays for a floating mortgage. Sometimes the banks get ahead of these things and take pre-emptive action on what they think the Reserve Bank is going to do. It depends on their international borrowing costs," Key said.

"There's a number of different factors, but by definition, if the banks are getting a reduction in their borrowing costs, then we'd like to see that passed on to consumers," he said.

"By definition, as good corporate citizens, if their cost base is reducing, then we would expect them to pass that on to consumers. What we wouldn't want to see is a reduction in the costs to the banks and an increase in the profits for the banks without any flow on effect to consumers."

Key doubted further mortgage rate cuts would further worsen housing market pressures.

"Will it affect the housing market? At the margins, not really now. Interest rates are at a 60-year low and that reflects very low levels of inflation in New Zealand. I don't think it will have a dramatic impact," he said.

'RBNZ has flexibility'

Asked if the Reserve Bank should have more flexibility to ignore record low inflation and avoid further rate cuts that further inflame the housing market, Key said the Reserve Bank already had a reasonable degree of flexibility. Some economists have openly questioned in recent weeks whether there is a future for inflation targeting in an environment where record low inflation or outright deflation is forcing banks to push rates ever lower, sparking fears they are pumping up asset bubbles.

"Ultimately it's for the Governor to decide whether he's going to hit his target or not. What we know is that if over the medium term they can't achieve their inflation target then they have a policy response through interest rates to deal with it," Key said.

"It's not like it's a precise science. They can take a degree of time and they can look at lots of factors," he said.

"One of the reasons we've given the Reserve Bank more tools in its tool box like LVRs and other kinds of policy tools we've given them is to allow them to potentially do both things -- lower interest rates and cool the housing market insomuch though some demand management."

Calls for migration review deflected

Meanwhile, Key downplayed calls in recent weeks from the Reserve Bank of New Zealand, ANZ CEO David Hisco and prominent investor Stephen Jennings for a review of New Zealand's migration settings in the wake of record high net migration, which is putting pressure on house prices -- and some say wages.

Key said commentators did not take into account that the Government was constantly reviewing migration settings.

"When it comes to the skills category we've taken 56 occupations off the skilled category list. We do constantly review that list. On the number of students coming, broadly there's a logical limit to how many we can take, given the capacity constraints we have. If anything those numbers have been easing back a little bit," Key said.

"These things do go in cycles," he said.

Key said he acknowledged high migration "put pressure on the system."

"On the other side, we need these people in an environment where unemployment is 5.2% and where growth is still very, very strong. You've just got to be careful when you play around with these things that you don't hamstring certain industries that need these workers," Key said.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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84 Comments

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26

Still in Denial Mr PM but for how long. You will have to act on oversead buyer with elections comning or be ready to be wiped out.

No solution will help unless you government act like Canada and Australia and you too will have to and will do Uturn and is not if but when or not only people of nz but before that national party may replace you.

If your government does not act next government will.would also like Auckland Council to act what suits NZ and not national party for national party will come and go but the country's interest is supereme.

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Seems like he's made his decision, Sticking with his overseas mates instead of New Zealanders. Time for him to go.

When arrogance takes over , one does not see the reality and may have to be booted out before they realize what hit them and their mistakes but by than will be too late.

With National at over 50% in the latest polls it doesn't look like J K is going anywhere

joke of the day

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Summary "At the end of the day we won't do anything. We are going to leave everything to the RBNZ and ARC"

Only because is trying to protect overseas buyer are insisting on RBNZ and Council to act and do their part but they will not do anything as that will harm their foreign friends and future posting that will be needed, once thrown from parliment.

http://www.newshub.co.nz/politics/poll-john-key-could-lose-grip-on-power...

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Not just overseas buyers but also locally based foreign buyers (students and temp visa workers) who are spending 13billion a year buying 250 properties every single week.

13,500 properties a year

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Foreign buyers are everyone who is not citizen of NZ and Residents (PR) - Rest all our forign buyer it is only JK and his gang at his command are trying to manipulate to suit them and their overseas friends.

Totaly sold their soul to.......

Where did you get this information?

He got that information in his mind

Which is where most of the evidence on these threads come from. We start with the issue being caused by foreigners, then work backwards to produce the evidence.

" What we wouldn't want to see is a reduction in the costs to the banks and an increase in the profits for the banks without any flow on effect to consumers."

I am glad that this has been spelled out by our PM.

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23

This is a man who has lost his mind. I hope he keeps this up though, people are starting to see through it.

DP

How correct, has tottaly lost so is not able to feel the mood of the country and is surrounded by yes men and overseas friend circle as a result is not able to see beyond.

People of NZ will give proper fitting reply.

.

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Meanwhile on Al Jazeera.....NZers being shamed

https://www.youtube.com/watch?v=TZ_Fopka524

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Hard to believe but we are getting better coverage on the housing issues from Al Jazeera than from our local media.

These sites need to be pointed out to our greybeards who seem quite content with what key has done to their house prices.

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Not that hard to believe when you know that the media is directions directly from National/Key.

Anyway the whole world now knows how heartless and incompetent John Key is.

Al Jazeera is BASED.

The thing that surprises me the most is that 40,000 people are homeless in NZ. Saddening.

Closely related - It's not surprising John Campbell got axed from television. My faith in the MSM couldn't be lower these days. I'm really not looking forward to the coverage of the next election. Thank you interest.co.nz for existing!

John Campbell got rid of the legal highs shame he didn't get rid of this government. One way to shut someone up is to fire him.

John Campbell got rid of the legal highs shame he didn't get rid of this government. One way to shut someone up is to fire him.

Thats because our media is censored. Basically if you want to know at least some of what is going on in the world you tune into channel 16 on freeview UHF and watch Al Jazeera. The contrast between the two on the same night is like we are living on a different planet in New Zealand, half the time they launch straight into Rugby on TV1 and cannot even wait to put it in the sport, its a JOKE.

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Disgusting. Just disgusting. What the hell has this country become?

Spread the video.

PM should be ashamed as is all because of his policy. Local NZ media is manipulated by national party PR and also in NZ, no investigative journalist or fearless media who can really raise an issue and expose government. Can only see a mention of an article here and their and that is journalism in nz.

No hard hitting and pursusaive journalism.

Perhaps it's the government that is secretly forcing both Kiwi's and evil foriengers to purchase properties! JK is no doube hatching a cunning plan to enrich his "mates" (whoever they are) further. This must be true.

People who don't own a home or have a good job but decide to have 6 kids are the ones who should feel ashamed. My wife and I own our own home and have good incomes and made the decision to have only three children.

These idiots breeding like rabbits and expecting to get a free house and money from my taxes have no shame. The days of the free hand outs with no responsibility are coming to an end. Unfettered socialism would see us all living in garages.

World is taking note of the situation in NZ but not our government and media - need media to take up an issue till it reaches its logical conclusion.

That's shocking for such a supposedly wealthy nation, though you would be surprised just how powerful shame is these issues need to be highlighted more globally to shame our Government in to action.

What we really need to know is to disclose where the bulk of the money is coming from and at what level that is driving the housing market (Mainly Auckland). Every thing else is just a smoke screen.

That's basically what drove Vancouver to finally act and clamp down on Foreign Investors. It only took them 5 weeks to uncover what was very much driving their market and they got quite a shock; C$1 billion of foreign money in five weeks alone!! That's enough to drive and housing market to the brink.

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23

Keys on his own little power trip fantasy, meanwhile NZ is paying the price. This is what happens when you get an ex merchant banker with a big ego running a country with a one dimensional worldview.......

Polls have WP in the King maker role, this just adds fuel to his campaign, he has lost touch with as mike hosking calls them right minded NZers, has our PM got a plan on what deal he will make to stay in power. Or is he just making sure he gets the best price for his mansion when he heads off to his next posting
me I think it time to start framing my finances for a change of leadership

Goodness me. This P M makes me think that "Alice in Wonderland" is real.

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And wage levels are static. Time to wind back the low skill immigrants.

Duh, we all think that this inflationary theft of our future income stream AKA apparent increase in wealth, as bank created credit, increases house prices/directly devalues the purchasing power of our wages relative to the primary need for shelter. It is a wealth theft,and transfer of all future earnings,to a very small minority.
Basically every property cycle reduces the wealth of every non-owner, now close to 50% of all people living here in nz, also enslaving so-called owners (mortgage holders) to 25 yr+ of giving 40% of net incomes to pay for money created out of absolutely nothing. The apparent price increases actually de-values the fiat currency, relative to purchasing power.How are these robbers are aļlowed to operate?

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To be fair , Nothing the prime minister of NZ has said in the above report can be taken as denial or irresponsible, on the contrary ..he just explained that there are other sides of immigration than the house prices alone and rightfully so .. the man has an economy to run not a small house hold. I found that his message to the banks was balanced.

Sorry to interrupt everyone's moaning session ... but anyone who can look at AlJazira's report impartially ( and know what AlJazira is!) can see through the propaganda it is trying to splash out in a typical "do the damage first ask questions later" fashion this channel is well known for ... ( inserting Poison in the Honey is what they are good at )
There is a lot of that in quoting figures and mixing things up - it quotes 40,000 homeless people and bush rough sleepers from an Otago Uni study !!! so now we are counting all rough sleepers as a result of house prices and availability eh? .... BH : "the turn around of renting properties is very high ??" average 18 months ?? where did you get these stats from mate?? ....how many landlords do you know who sell their rental every 10 years let alone 18 months??? ask any landlord and they will tell you that he is pulling numbers out of thin air ....to back an argument !! ... You really don't know the difference between Speculators / Traders and landlords ?? ... isn't it obvious and quite natural that in every housing cycle a certain proportion of rentals will go to private ownership ? so the rental house numbers will go down, the exact opposite happens in bust times ...!! isn't it true that rental availability and prices are a seasonal thing .... there are good 3 bdrm houses for rent in Birkdale and Glenfield / Auckland NorthShore for under $450 a week ...
http://www.trademe.co.nz/Browse/CategoryAttributeSearchResults.aspx?sort... ....

Isn't it true that mum and pop are buying investment properties in the last 3 years which has exacerbated and added to the housing availability problem ? Aren't all of these investments been added to rental stock??
Nothing in the Aljazira report and in the way it was presented is doing NZ any service ... and actually it is very damaging to our reputation internationally for blowing a limited problem out of proportion to the entire world ...( as if we had never had homeless people and bush dwellers before ) all for the sake of finding a nerve wrecking subject with few tears to report on for 5 min , then mentioning that the lady's problem was sorted in the last 15 sec .... just like the guy in the Marae who, if people remember went out on a TV1 report few weeks ago , and said that all families who were in the Marae have been moved into accommodation by WINZ... Jenny Salesa the MP : "rents are increasing in "huge" amounts disproportionately affects pacific and Maori families" ... so do we need to have "proportionate rental rates" for P & M now? can that be a responsible statement from an MP?

This is music to renters' ears: and you wonder why rents go up ... Go FIGURE
http://www.landlords.co.nz/article/5820/no-tenant-liability-under-new-rules

Careful NZ, don't let your political affiliation damage the Country ... we should collectively be smarter than that !!

You want a change in Government?, FINE , get out there on election day and vote .... don't tarnish the country's reputation by barking at the same tree.

Two thumbs up for your comment Eco Bird.

..and 10 fingers.

EB - would the mums and pops investors be buying if there wasn't a whole bunch of immigrants swarming in putting the pressure on prices as well as traffic, education, health, policing.
I gather you don't have children looking to become FHB's????

My criticism of JK is that he won't do anything. We need leaders who lead, not cower tremously behind passing the buck onto the RBNZ.

Actually they would because it is the only show in town .. all other investments do not even come close to the returns from owning a property ..... I agree, maybe prices wouldn't have gone that much up as immigrants of all nominations have depleted the already tight supply and we can only blame ACC for that blunder.... .. but its not only mum and pop, its everyone who is on high income and who didn't know anything about property investment but with the help of all sorts of advisers they realized that it was a no brainer ... and there is nowhere else to park cash in a low interest rate economy.

I actually have two boys working full time who ( with a bit of assistance and guidance) have already bought their first homes 3 years ago ( as an investment thus far) until they settle and decide where to go in future ... and yes they do live at home and save !!

FH buying is not a drama or rocket science , it is discipline .... start small and if you do not have the means, you have to learn to squeeze yourself and self-educate financially.
Money does not grow on trees and the market will never wait for those who missed the train, you just have to learn to run faster. and that is the bitter truth whether we like it or not.
( the above is just an opinion and NOT a financial advise)

the other bitter truth is that no one will find anything to buy in Auckland for under $550 - 600K -- decent one bedroom apartments will start from $500K very soon ... so JK, AL, or whoever will not be able to change that ...unless they remove GST on building material and labour ///

Eco bird,
Your comment about no other investment even coming close to property owning is nonsense. I am primarily a Stockmarket investor, but also have a rental property and I know that my portfolio of dividend oriented equities has given me a better total return than my property. Of course, as I haven't sold it, I don't know what it would fetch although I am sure the profit would be substantial. It is in Mt. Maunganui.

A quick check of my Meridian shares shows they have delivered a return of 118% (without reinvesting dividends) since April 2014. Not too shabby.

"Eco Bird" has a lot of time... and sounds like a PR man... and is very supportive of National...

"To be fair" "Sorry to interrupt" "Isn't it true"

Almost sounds like someone from Crosby Textor...

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JimmyH; Unfortunately I don't think many people know this at all. Most NZers live from week to week surviving and just trust that their politicians know what they are doing. It will take NZ 30 yrs to financially recover from this governments immigration and foreign investment policies and at the moment it doesnt seem like the main opposition parties would change much either.

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So true, people don't have time or energy to think about things, its just survival and hoping government are doing the best for NZ. When the government denies, denies, denies and then has to admit a problem due to media pressure, you start to wonder how trustworthy they are. People are sick of politics and being manipulated by sweet talk players. I am glad Brexit happened

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18

Good National PR spin.... everything you mentioned doesn't take away the fact that
-we have more homeless now than ever and it is at crisis level
- NZ house prices are the highest in the world relative to incomes
- immigration rate is 4th highest in the world without the infrastructure to support it
- wages have barely moved in the last few years
- gdp per capita is at a stand still
- household debt is 216bn and growing at 8.8% pa
- investors are buying 46% of properties
- nz has the lowest purchase tax in the world ie zero %
- foreign students and temp visa workers bought 13,500 houses in the last year. Assuming all in Auckland that 13billion dollars approx.

This govt has let down it citizens....

Good National PR spin.... everything you mentioned doesn't take away the fact that
-we have more homeless now than ever and it is at crisis level
- NZ house prices are the highest in the world relative to incomes
- immigration rate is 4th highest in the world without the infrastructure to support it
- wages have barely moved in the last few years
- gdp per capita is at a stand still
- household debt is 216bn and growing at 8.8% pa
- investors are buying 46% of properties
- nz has the lowest purchase tax in the world ie zero %
- foreign students and temp visa workers bought 13,500 houses in the last year. Assuming all in Auckland that 13billion dollars approx.

This govt has let down it citizens....

This wasn't a NAT PR at all ... very far from it .... I do not have any affiliation or bias to neither side .. I just outlined a different point of view some chose to selectively ignore - and that is only fair

You are right Joe, it doesn't take away the fact you mentioned at all but it also doesn't negate the ones I mentioned either - we need to be balanced if we want to get ahead.
there will always be side effects and collateral to any policy taken by ANY Government - we just chose now to forget Labour's Blunders when they were in power for 9 years ..

At the end of the day , the majority of people in a democracy will weigh the benefits and VOTE accordingly ... let's try to minimise the damage until then.

You are right about the power of the vote. The problem is that a lot of NZ are rather misinformed by political spin and really need someone nuetral with no hidden agendas to come out and state what position we are in, in very simple ways. People don't vote due to ignorance and feeling powerless to change

That someone neutral with no hidden agendas is supposed to be the NZ news media.

So you see people as expressing their discontent at the government as "damage"...?

What's your interest here? What do you do for a job? Where are you from?

I have no idea. National are obsessed with creating regulations and centralising power. I'm not sure when they changed but they are very left wing with their socialism being for the rich. It's not that we need a change of Government but we need a centre right party that allows more freedom to markets that can replace National.

Fair enough eco bird I take back my previous spin comment. You made a few good points although it does feel like we have turned a corner for the worse in the last 10 years or so in terms of the amount of people really struggling out there.

Problem is the media has far to much influence on how facts figures stories etc are reported...

Two great examples
1) Bernard trying to convince us that the banks should not cut the rates for our benefit
2) media talking about the 3% offshore completely ignoring the 13,500 homes sold to foreign students and temp visa workers . These make up 32% of resident buyers.

You are correct Joe if government is right, why are they lying to people and manipulating the data. People lie and deny only when they are wrong and have something to hide for vested and hidden interest.

Other political party will also have their own problem but one cannot justify the inaction and arrogant attitute of national ministers.

Also one cannot deny the fact that John Key is more concern and protective about foreigners than kiwi who voted him. Just go to any auction house and see for yoyrself. Need no data for that as is known to one and all except our Hon PM.

The crazy thing is that the government & media's (including this website) definition of a foreign buyer is people living offshore... completely ignoring foreign buyers (students and temp visa workers living in NZ).

So if your children went overseas to try and save a deposit to buy a kiwi home (as they couldn't save fast enough on kiwi wages) according to National they would be a foreign buyer ...

yet the foreign student wouldn't be.

NZ Government and media say
Foreign = Non-Resident,
Non Foreign = Resident

Australia, Canada and Singapore have a far more sensible approach
Non-Foreign = people with citizenship & permanent Residency
Foreign = everyone that isn't a citizen or permanent resident ie offshore foreigners + Students + Temp Visa
So your child wouldn't be a foreign buyer in this case

13billion, 250 houses a week.... these buyers are the buyers pushing up the prices especially when supply is so limited... we need to do what Canada (Vancouver) has done and apply a 15% stamp duty on this group... then we can get prices back to levels locals can afford...

Do we have a leader with a Vision or just good business men is the question.

Joe Public,

Just a note of caution on the Vancouver tax of 15% on purchases by foreign buyers. As I understand it, under the Canada China Foreign Investment Promotion and Protection Agreement, foreign investors must be treated as favourably as locals and this tax would seem to clearly breach that agreement. It is also likely to breach the terms of NAFTA, so the main beneficiary of this tax might be the lawyers, rather than the locals.

Indeed Joe, it feels that way, but the same thing happened in 2004 - 2007 and around 1998 - 2000 ... I remember the same arguments when I bought my home then.

Here is the fact, no matter how painful it is, the Gov needs the skills and students and business migrants to grow and support the economy, and these will contribute to every kiwi in some way or form including the need for housing ... in my opinion, what makes it different this time is that these migrants are coming back really loaded, you see the 13500 house were not sold for money lent from our banks ( no bank will lend to students) , So that $13 B was injected into our local economy - that is a huge difference when it comes to counting chooks !! yes it did contribute to house inflation but so did the billions used by Aussies, expats and Poms in buying their houses recently, they too brought in some of the o/seas money to do that ... My point is , let us be careful when we use percentages and stats and make sure we do not get tangled in other people's agendas or the traps of MSM. When the world is awash with money and property is the only show in town ( every town) .. house prices sky rocket ! this cycle may reverse, but when it does , it will a sign of a miserable economy....

Bernard is disappointing me by departing from objectivity and sadly following other's lead in confusing issues and being a contrarian (probably in order to attract attention) , however , history taught us that you can fool some people some of the time, but cannot fool all people all the time .... GM knows that too well !!

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So let's not train up NZers then, let's import more $2 shop owners, good to know.

You're a shill and an apologist.

Dont forget the fully trained highly skilled 18 y.o. ethnic chef who makes so much money from his empty takeaway that he owns several houses, or the in demand tehnician at your local servo.

..and lets bring in truck loads of foreign nurses whilst our own graduates cannot find a job. The DHB's would rather have complicit pooly trained foreigners who don't ask questions - about either work conditions or medically..

"the Gov needs the skills and students and business migrants to grow and support the economy"
Well I'm glad they didn't throw out the ethnic chef category. We would be at a loss without that..

"So that $13 B was injected into our local economy"
Still having issues with that real versus nominal thing, huh?

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Eco Bird. The 13 billion injected into our economy by selling houses with land sounds great but I struggle to believe that it is a good thing.
When i was a young man my employer, the Ministry Of Works was building Aucklands motorways and hydro dam projects. It cost approximately 3 yrs wages to buy a house. The MOW, NZ railways and telecom collectively trained thousands of apprentices every year.
Telecom was sold, MOW disbanded, Railways sold and then repurchased gutted out of its land assets. The Hydro dams and reticulation network 49% sold. Glenbrook steel mill sold, Pine forests sold, Fishing quota sold, etc etc
We now import most of our tradesman, pay up to 9 years wages for a house and are being told that we will have to pay tolls on the motorways we built 40yrs ago.
It seems the last things we have for sale are our houses, our land and our low population.

Totally correct - We have sold the future to live better today ... debt is just consumption brought forward .... All Govts everywhere have done it - and energy wise the future definitely cant afford the bills.

Great post ... unsustainable that is the problem.... we will run out of houses to sell them eventually and then what ?

We need to encourage investments that will lift GDP per capita... selling housing has not and will never do that ... high housing is just holding us back in the long run.

20 years wages for a house based on the median income in Auckland 50k and average house price of 1m ... the 3 years you were probably referring to was one person working not a household of two people like they count these days ...

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11434556
Latest available Statistics NZ figures show the price growth eclipsed what most people earned in their jobs. Auckland workers' median annual income last year was $46,800

The unsustainable part is that energy available per capita worldwide is now falling. This goes for all resources such as land & fresh water but energy is ultimately the key measure. This spells trouble, because debt can paper over this fact temporarily, allowing ever greater claims over future energy supplies, even though the future energy wont be there - it cant because extraction relies on ever greater economies to scale ... which leads to more people reqd to take on the debt ....
Historically, at some stage, it turns to war to get your "fair share" of the energy available.

I agree NH and you are perfectly correct , but times have changed and we do not have full control of our economy anymore as it is now part and parcel of the western world's economy whether we like it or not - it is complicated and called GLOBALISATION. I strongly subscribe to the school of NEVER SELL THE FAMILY SILVER because you lose you dignity with the silver .. but that's what poor people do to live in this world ... we can all remember the good old days but alas these have now changed, maybe they will return one day .. but then we will lose a lot of what we are now addicted to and have to go back and live like we used to 30 years ago. Try that as your next election campaign !! and see how many votes you get

Eco Bird, the family silver is long gone. We are now selling our sovereignty. Our low population has always been our greatest asset and the quality of our lifestyle. We are selling that along with the very houses we live in.
NZ'ers who own multiple properties are getting rich, NZ'ers who own their house are kidding themselves that they are wealthier. NZ'ers who are not on the property ladder for whatever reason are screwed.
Our government insists on its chosen path of creating extreme wealth for a minority and impoverishing the majority.

"Our low population has always been our greatest asset"
You nailed it in one sentence. Most countries are buckling under pressure soley caused by too many mouths. We were in an enviable position with our popn/resource ratio. Yet Jong Key and his band of boomers seem to think they can improve our lot simply by adding more mouths.

rastus I can understand the minority of NZ'ers who are actually getting rich liking John Key. But why so many of the have nots?
Why is the Media so bias and so shallow? They can't all be stupid can they?

I don't wish to sound apocalyptic, but if society keeps on marginalising large groups of people,then what we have seen with Brexit and Trump, may just be forerunners to much greater protests to come. People can be pushed a long way, but if they lose all hope in the prospect of improving life for themselves and their families, then we can expect real social unrest.
I have 4 young grandchildren and I don't want them to grow in an increasingly divided society. Unlike the Second law of Thermodynamics, Globalisation is not a law of nature, but a political process which can be changed.

I don't wish to sound apocalyptic, but if society keeps on marginalising large groups of people,then what we have seen with Brexit and Trump, may just be forerunners to much greater protests to come. People can be pushed a long way, but if they lose all hope in the prospect of improving life for themselves and their families, then we can expect real social unrest.
I have 4 young grandchildren and I don't want them to grow in an increasingly divided society. Unlike the Second law of Thermodynamics, Globalisation is not a law of nature, but a political process which can be changed.

John Key expects everyone to be good and do what is expected by them but WHAT ABOUT HIM DOING WHAT IS EXPECTED FROM HIM.

Headline should be changed but does the media have.........

Has anyone actually thought it is a good thing the banks pass it on?

The problem behind the ridiculous housing market here has never been local interest rates.

Kiwis are priced out their own market by Foreign buyers with easier/cheaper access to debt. At least if our rates drop, it gives Kiwis a slightly better chance.

13.5billion I believe in this case the long-term downsides far outweigh the short term upsides..

few articles below:
http://business.financialpost.com/news/economy/canada-must-tame-runaway-...

This article explains it perfectly:
http://www.economist.com/news/special-report/21621157-sky-high-house-pri...

"Sky-high house prices in the most desirable cities are holding back growth and jobs....

Sky-high housing costs mean that more of the gain of new job creation is captured by landlords (or homeowners who get out) than by employers or workers.

and this:
https://www.theguardian.com/society/2014/feb/12/rising-house-prices-not-...

ut a new poll confirms it's not just a generation of priced-out Londoners who are rebelling: anger about an overheated market has spread across the country. No, the poll is saying, we don't "enjoy" ludicrous rises in house prices. Enough is enough.
per the article:
This is an extraordinary turnaround, and a puzzle for economists steeped in conventional theories. In every other period of economic recovery, rising consumer confidence and rising house prices have gone hand in hand, creating a feelgood factor crucial for politicians seeking re-election. This time around, rising house prices are producing the opposite: a feel-bad factor among young adults permanently excluded from buying and furious about rapacious rents, combined with a growing sense of despair among the middle-aged no longer able to move up the fabled property ladder because each rung is financially just too far away from the one before. Add to that the many households with jumbo-sized mortgages who fear a return to "normal" interest rates, and you have a potent extra ingredient to the "cost of living crisis".

and this one
https://www.theguardian.com/housing-network/2013/jun/20/high-house-price...

"Longer term, as the Barker Review of Housing Supply in 2004 made clear, tackling the shortage of housing can prevent instability in the wider economy because of the impact a place to live has on businesses, labour markets and individuals. An insufficient supply of housing can restrict labour market mobility, raise business costs and exacerbate inequality – constraining economic growth."

"In these economies, housing shortages and high house prices can put a brake on economic growth, placing increasing pressure on existing infrastructure, raising business costs, exacerbating skill shortages, and preventing people from moving to a successful city.
This is bad for the individual, bad for businesses and, as a result, bad for the local and national economy."

Sensible policies that will see in a 4th term.

careful .. the snake oil eventually bites you

What sensible policies?

Good to see more migration here but make sure they are quality migration. Not cheap, un wealthy people.

Or even wealthy people who buy up property for no one to occupy, who just view New Zealand as a commodity to invest (hide) their capital in, driving up house prices so fast that the local population can't compete. Oh and then there's the money laundered too. Personally I prefer the un wealthy migrants, it takes a lot of guts to move to the arse end of the world.

"If the Reserve Bank cuts, then we'd like to see the banks pass that on in full if they can,"

"There's a number of different factors, but by definition, if the banks are getting a reduction in their borrowing costs, then we'd like to see that passed on to consumers,"

"By definition, as good corporate citizens, if their cost base is reducing, then we would expect them to pass that on to consumers. What we wouldn't want to see is a reduction in the costs to the banks and an increase in the profits for the banks without any flow on effect to consumers."

If this is a true belief then shouldn't it be applied to all businesses, not just banks? Rephrase it to include passing on increased profits to employees and consumers.

Humm... It does rather smell of Fat Cat Bankers who want to retain the bank cuts for themselves. They're all too keen to cut saving rates but when it comes to passing on the rate changes to Borrowers, they then retain the rates for themselves for profit. This hampered the GFC back in 2008/9.
BBC article December 2009: Barack Obama criticises 'fat cat' bankers
http://news.bbc.co.uk/2/hi/business/8411412.stm

Learn from government no ethics, no moral only money money money. So why blame and cry and expect good behaviour from others.