Holiday briefing; The good, the bad, and the ugly

Business / news

US reports a range of generally good data; China goes insular, rolls back property restrictions; Russia hugs Germany tighter; NSW reimposes restrictions; UST 10yr 1.49%; oil and gold firmer; NZ$1 = 68.3 USc; TWI-5 = 72.8

24th Dec 21, 9:02am by David Chaston

Here's our summary of key economic events overnight that affect New Zealand with news primarily from the US and positive despite the inflationary pressures.

New claims for jobless benefits fell last week to +256,000, but we should also note that the seasonally adjusted number is now at a lower +205,000. The prior week's data was revised lower. The total number of people on these benefits is now 1.83 mln, and similar to the pre-pandemic levels

Even though it was expected to rise to 4.5%, the November core PCE inflation rate (the one preferred by the Fed) rose to 4.7%. The actual rate rose to 5.7% (and closer to the CPI rate of 6.8%).

Other core US data rose above expectations too. Durable goods orders for November - another key driver of the world's economy - rose +2.5% in November from October to be up +22% from year-ago levels. Orders for capital goods are up +35% on that basis. These increases far outweigh changes due to inflation and suggest an American economy that is ending the year in robust economic health.

New home sales in the US, more of a local indicator, were up in November from October, but nowhere near the levels of a year ago when activity was strong before supply-chain issues hit.

And just like the Conference Board survey we noted yesterday, today the University of Michigan consumer sentiment index came in strongly, and even above estimates which itself is impressive given the Conference Board signal. What is notable is that the uptick was primarily due to significant gains among households with incomes in the bottom third of the population.

In China, they have put 13 million residents of a city near Shanghai into its biggest pandemic lockdown yet.

Separately, China has managed to hoard over half the world's grain stocks, pushing up global prices, a move that is "dropping more countries into famine".

And it has managed to extract an apology from chip-maker Intel, after Intel asked suppliers not to source components from Xinjiang. The California-based chip maker said a letter it had sent to global suppliers was written only to comply with American law and didn’t represent Intel’s stance on the region. The kowtowing is likely to cause severe backlash.

And at home, China is fast rolling back its clampdown on property developers. More than 15 local governments in China have introduced measures to support their housing markets since November.

Taiwanese industrial production continued its strong recent expansion, and was up +12.2% above year-ago levels. The recovery in their retail sales, which had been a laggard for some time, extended in November to be up +6.3%.

While they were expected to be high, the rise in German import prices beat forecasts in a tough outcome for them, up +24% in a year as Russia attempts to pressure them to win concessions in the Ukraine. It all about oil and natural gas prices there. Natural gas prices are +270% higher than a year ago.

In Australia, hospitals are facing looming staff shortages as the Omicron surge forces the NSW state government to reintroduce compulsory masks and density limits. There were 5715 new community cases reported yesterday in NSW, and another huge jump, with 27,093 active locally-acquired cases, but only 1 more death. And 1980 pandemic cases in Victoria were reported yesterday. There are now 14,801 active cases in the state - but there were another 10 deaths there. Queensland is reporting 184 new cases. The ACT has 85 new cases. Overall in Australia, 89.7% of eligible Aussies are fully vaccinated, plus 3.4% have now had one shot so far.

Wall Street has opened its Thursday session with the S&P500 up +0.7%. Overnight, European markets rose in a range of +0.4% (London) to +1.0% (Frankfurt). Yesterday, Tokyo ended up +0.8%, Hong Kong was up +.04% and Shanghai ended up +0.6%. The ASX200 closed its Thursday session up +0.3% but the NZX50 ended flat.

The UST 10yr yield opens today at 1.49% and a +3 bps firming since this time yesterday. The UST 2-10 rate curve starts today little-changed at +80 bps. Their 1-5 curve is unchanged +96 bps, while their 3m-10 year curve is steeper at +147 bps. The Australian Govt ten year benchmark rate is off another -1 bp at 1.63%. The China Govt ten year bond is down another -2 bps at 2.84%. The New Zealand Govt ten year is unchanged at 2.27%.

The price of gold will start today at US$1810/oz and up another +US$11 from this time yesterday.

And oil prices start today +US$1.50 higher at just over US$73.50/bbl in the US, while the international Brent price is now just under US$76.50/bbl.

The Kiwi dollar opens today in a general move higher and is now at just over 68.3 USc. Against the Australian dollar we are marginally softer at 94.3 AUc. Against the euro we are firm at 60.3 euro cents. That means our TWI-5 starts the today up at 72.8 and holding yesterday's gain.

The bitcoin price is up to US$50,660 and +3.6% above this time yesterday. Volatility over the past 24 hours has been moderate at +/- 2.8%.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

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95 Comments

by ikimpaul | 24th Dec 21, 9:16am 1640290575

I see Auction sales at Barfoots were just 13% on Tuesday and 33% on Wednesday - following a 28% clearance rate from last week.

A number of interest commentators have stated this is just the Xmas effect - but I did read this morning the new credit rules are starting to bite hard with most borrowers only been lent 75-80% of previous pre-approvals. Data I've seen and read includes a previous pre-approval been changed from $1.7M to $1.275M, $700K pre-approval now at 550K.

If this is correct - then I dont see any other result in 2022 then a decline in house prices - if people have less money they can borrow then they will have less money they can offer.

by Albert2020 | 24th Dec 21, 9:21am 1640290873

That's correct, the question that needs to be answered is why wasn't property lending restricted broadly 20 years ago. House prices wouldn't be anywhere close to where they are now if that had been implemented.

by False economies | 24th Dec 21, 9:28am 1640291289

Who wouldn't have made lots of money if lending had been restricted then? That might answer your question

by Flying high | 24th Dec 21, 9:34am 1640291650

We had the free market. Trouble is the market was not free in terms of supply, it was heavily restricted. The question i might ask is, why did it take politicians 30 years too long to change RMA rules when they were able to make a joint statement and enact legislation in a few months?

by Pa1nter | 24th Dec 21, 9:36am 1640291767

There's never ever been a free market, just varying levels of external involvement.

by HW2 | 24th Dec 21, 9:38am 1640291910

Yep that one move would have provided more homes AND avoided the feeding frenzy of buyers mounting each other with higher offers... aka FOMO

by KH | 24th Dec 21, 6:47pm 1640324875

Now there is FOOP. Fear Of Over Paying

by HW2 | 24th Dec 21, 8:04pm 1640329453

Buyer's and seller's remorse is quite common. Clinching a deal means extending to the point you are uncomfortable, that is certainly true if at a contested auction. Of course all the rellies and friends want to know 'how much?', after which they usually say 'that much!' We bought a business property mid last year paying up to 50 percent above reg valuation to secure it. Between you and me the reg valuation did not take certain factors to account. The rellies now think I am a wizard :)

by Waikatohome | 24th Dec 21, 9:37am 1640291854

This was the solution required all along. I was helping my Mother in law buy a house earlier this year. The agent said don’t worry about what you think it is worth, just work out how much money you can get together and put in your highest offer so you don’t miss out. Fortunately we ignored this advice, but less experienced buyers may have followed it and mortgaged themselves to the eyeballs. The whole market was a credit fuelled bubble.

by Solid_Granite | 24th Dec 21, 3:08pm 1640311739

I was given the advice to put an unconditional offer in before I'd even seen the place, so I didn't miss out...

by redcows1 | 24th Dec 21, 9:39am 1640291957

Because almost everyone focused on things like housing affordability which is affected mostly by interest rates, rather than the actual cost of a house. And RBNZ uses only the interest bludgeon in policy. Affordability is calculated on a weekly basis and takes no account of the term of the loan. Hence so long as nobody looked to hard the banks could keep upping the available money and it's all good.

CCCFA now forced the financial institutions to look at the loan a bit harder and surprise surprise.

Certainly there's been a number of commenters on here stating that it's availablility of money not interest rates that's driving house prices. Backed up by Audaxes posting of research.

by Smudge02 | 24th Dec 21, 11:16am 1640297773

Because everyone was just enjoying the false riches and didn’t want the party to stop. It’s like when you go out for a few drinks and you get to that point where you have had a good time and should stop with no harm done but you decide to carry on because you are having so much fun, but then you inevitably have to deal with a brutal hangover!

by JimboJones | 24th Dec 21, 9:23am 1640291000

Not only the new credit rules but also higher interest rates will seriously affect how much people can borrow/repay.

by HouseMouse | 24th Dec 21, 9:56am 1640293002

Yep.

Both the availability AND cost of finance are critical.

Both are moving in a direction that will have a fundamental impact on the housing market.

by jfree | 24th Dec 21, 9:40am 1640292028

This couldn't possibly be true. I've heard from every single politician, commentator and expert for 20 years that the only way to affordable housing is "supply supply supply!"

by Yvil | 24th Dec 21, 10:15am 1640294110

Ikimpaul, your data is correct, it's become so difficult to get finance is incredible.

Your conclusion that house prices will drop is not a given though. Prices will only drop if sellers accept lower offers, a few might but most will just not sell as there is no pressure to sell (yet)

by JimboJones | 24th Dec 21, 10:29am 1640294949

Plenty of people will have pressure to sell: divorced (high at this time of year apparently), moving, going to a rest home, downsizing, upsizing, and those sensible enough to offload their rentals before prices drop further. But there will be very little pressure to buy if prices appear to be dropping.

by Nifty1 | 24th Dec 21, 10:34am 1640295259

It's seems like people haven't been selling for a couple of years now - stock on market low. Surely people are over it and want/need to make moves? How many will cash out at 'the peak'?

by Yvil | 24th Dec 21, 11:04am 1640297097

"Peak"? Like the peak in 2002 or 2008 or 2016? How are the people feeling now who sold at these "peaks" ?

by Uninterested | 24th Dec 21, 12:09pm 1640300960

Most people who are into real estate only have an affinity towards: real estate. But there is the looming phase-in of tax deduction reduction.

So would investors think of selling? But bank interest is nothing like getting rental income. And the leverage goes away. Problem.

by Let me be Frank | 24th Dec 21, 11:18am 1640297930

You appear to have missed one....roughly 33,000 deaths per year...a good proportion of those will be owner occupiers and/or investors.

by HouseMouse | 24th Dec 21, 11:25am 1640298320

People going out of business.

by chebbo | 24th Dec 21, 11:01am 1640296916

a few might

That's all it takes.

Your house went up in value without you having to sell it, because others like it sold for a higher price than what you paid. Same thing happens on the way down.

by JimboJones | 24th Dec 21, 11:42am 1640299331

Exactly: you don't need many sales for prices to go up, and you don't need many sales for prices to go down.

by Brock Landers | 24th Dec 21, 12:15pm 1640301325

I applied for another pre-approval this week just to see what was going on. They are still willing to lend stupid amounts of money for lousy wooden tents.

by Carlos67 | 24th Dec 21, 6:40pm 1640324437

I just love dealing with tyre kickers in life.

by frazz | 24th Dec 21, 10:30pm 1640338210

Does not surprise me

by Brock Landers | 26th Dec 21, 3:52am 1640443967

Why?

by Pa1nter | 24th Dec 21, 9:34am 1640291692

The issue with Auctions is that buyers have to be unconditional buyers at the time of auction, so you inherently restrict the number of buyers, even more so when you clamp down on lending.

Because the markets been running warm, agents will lean towards auctions, because it's the least amount of work for the shortest sales time.

So the truth lies somewhere in between. Auctions will lose favour as the prefered marketing strategy, and sales will find an equilibrium in a less restrictive sales process. Oh, and people will still use the phrase "housing Ponzi" a lot, and how everyone's going to leave NZ for the cheap housing markets of Detroit and Beirut.

by HouseMouse | 24th Dec 21, 9:58am 1640293120

Who has said 'Detroit and Beirut'?

Go west across the water and you can find cities that have significantly more affordable housing and cost of living, and better pay.

by JimboJones | 24th Dec 21, 10:30am 1640295055

"significantly more affordable housing": where?

by HouseMouse | 24th Dec 21, 10:56am 1640296600

Brisbane, Adelaide and Perth - and to a lesser extent Melbourne.

by JimboJones | 24th Dec 21, 11:06am 1640297193

I think it depends where you want to live and what type of property. Nice places on good sized plots in good central suburbs are still expensive AFAIK.

by HouseMouse | 24th Dec 21, 11:12am 1640297544

All types of property are priced significantly lower in those cities.

by JimboJones | 24th Dec 21, 11:31am 1640298670

Having watched Love It or List It Australia recently I was amazed how little you got for your money, it seriously made Auckland look reasonable (although the building work was a lot cheaper there). Granted that was mostly Sydney, but also Brisbane and Melbourne. Perth is no doubt cheaper but it is a long way away (expensive flights if you have relatives here still). I don't really know much about Adelaide TBH.

by HouseMouse | 24th Dec 21, 2:29pm 1640309373

Nope.

As per another comment below, priced more at the Christchurch sort of level.

Not 'cheap', but much cheaper than Auckland.

Think new 2 bed townhouses for 600-700k rather than 800-900k.

by Carlos67 | 24th Dec 21, 6:51pm 1640325085

yeah some pretty shocking 3.8mil houses joined to the one next door and no garage on a section you cannot swing a cat in Bondi. Sure there are cheaper places but it's no different in NZ if you want to move to the middle of nowhere.

by Gen X-ploited | 24th Dec 21, 9:38pm 1640335099

You keep telling yourself that mate because your life now consists of living in a gang ridden traffic jam that is Tauranga, that's your lot. Ozzy is miles better than boring poor NZ and houses are miles cheaper and better quality. Plus the ozzies don't have the chip on the shoulder you lot do.

by Carlos67 | 25th Dec 21, 10:23am 1640380996

LOL yeah just hating it down here on yet another crystal clear Tauranga day with 180 degree views of the Kaimai range. Merry Christmas everyone.

by Gen X-ploited | 25th Dec 21, 12:26pm 1640388400

Whakamarama to Bethlehem used to be a really nice drive, now its constant gridlock with all those new Omokaroa mugs just paid up large for 300m2 sections on a crumbling peninsula. Its interesting though seeing the gangs join up at Wairoa Marae coming into Bethlehem. They own that whole area now and bully us normal road users with their aggressive group riding. You have fun in your slowly deteriorating eutopia. Each to their own. Aucklanders had it so bad that when they move they think anything is good.

by Pa1nter | 24th Dec 21, 11:38am 1640299104

They're priced about the same as Christchurch.

by Pa1nter | 24th Dec 21, 11:16am 1640297763

I heard someone on here talk about Lake Michigan a few weeks ago.

Regardless, a trip over the pond isn't a trip to cheap housing valhallah. It's all the same issues anywhere people want to live.

by bender | 24th Dec 21, 6:29pm 1640323778

And you have to deal with Ausstralians daily, not just their banks.

by Gen X-ploited | 24th Dec 21, 9:39pm 1640335186

Give me a true blue over a greedy kiwi anyday.

by HW2 | 24th Dec 21, 9:44pm 1640335462

They were exported to Australia because of their charitable and peaceable natures. None were greedy thieves or corrupt officials, that is a false despicable rumour

by Audaxes | 24th Dec 21, 9:46am 1640292392

No Way, This Cannot Be True.

by Larry76 | 25th Dec 21, 9:14am 1640376880

You are seriously posting a blog from a paid Russian shill, blaming high EU energy prices on climate scientists and interference in ‘free markets’?

Try the most obvious reason for high energy prices - Russian price gouging on natural gas, reflecting a complete market *failure* to secure reliable energy from local sources.

by HW2 | 24th Dec 21, 9:49am 1640292570

Those who think that the market is doomed, with statements like "the debt fueled bubble will burst", need to think again. Consolidate yes. You will be stuck forking out your savings on rental accom while you wait for doomsday

by Waikatohome | 24th Dec 21, 3:53pm 1640314430

I have a house and so does my mother in law now. We just avoided auctions and didn’t get emotionally attached to any one house. Even in a crazy market there are bargains to be had for the patient and well researched. Just don’t get sucked in by agents or FOMO and know what you can truly afford. Remember that buying a house is a two way transaction, it is not all about what the seller wants. They also need your money and want to move on with their lives.

by HW2 | 24th Dec 21, 10:07am 1640293622

Sincere congrats

by Audaxes | 24th Dec 21, 9:55am 1640292941

The UST 10yr yield opens today at 1.49% and a +3 bps firming since this time yesterday. The UST 2-10 rate curve starts today little-changed at +80 bps.

Looking back on 2021, by every single mainstream interpretation this was the year of inflation, too much money, therefore double hawk taper and triple hawk rate hikes for 2022. Yet, from the perspective of the far out yield curve spaces, nearly this whole year has been the opposite with rising backward or deflationary potential almost from the very beginning. Link

by iwantit2 | 24th Dec 21, 10:04am 1640293485

While I see people think this CCCFA is a good idea especially for housing prices, it was not the banks fault the RBNZ cut the OCR so low which enabled people to borrow more. Banks still tested at a higher rate and did the relevant processes/checks for affordability that they have been doing for many years

I think people are not seeing the flip side to the CCCFA. This affects any personal lending from credit cards, motor vehicle finance, retail finance, top ups for a kitchen reno etc etc. I don't know one person who has never borrowed money at some stage in their life. If banks cannot lend money, and people cannot borrow money to buy things that you don't normally pay cash upfront, it will have a huge knock on effect from top to bottom. Retail sector, mv dealerships, construction industries are all going to suffer. People will have to make cut backs in order to save but this means hospitality and other areas will suffer aswell.

CCCFA was brought in to protect people from irresponsible lending and getting into large amounts of debt. People will only go to loan sharks or off the books type lenders to get what they need, the very thing the government was trying to fix.

So once again the majority of consumers are going to get burnt by the minority and where a problem dosnt exist in the first place.

Only time will tell how quick the government will act once the wheels fall off and we come to a grinding hault.

by HouseMouse | 24th Dec 21, 10:15am 1640294127

I guess we'll see in the next few months just how reliant the NZ economy is on highly accessible credit.

As you say the effects will be wide ranging, way beyond just housing.

by JimboJones | 24th Dec 21, 10:40am 1640295624

I find all the personal expense questions annoying. The reality is that most people can decrease their personal expenses if they really have to anyway, so your current expenses are almost irrelevant. In fact it is the customers that currently have low expenses that are the riskiest as they have nowhere to go.

They also asked me how I planned to pay off the loan (this was a 10k mortgage topup!). I said I'll just let inflation eat away at it, I am not sure they understood what I meant but they ticked some box anyway.

I'm happy that they are making it harder for people to get into stupid amounts of debt, but I would rather see a formula based approach (debt to income or something) than a million questions where the answer in the end is almost always yes.

by Nifty1 | 24th Dec 21, 10:46am 1640296006

Is it just annoying because it's impacting you now?

by JimboJones | 24th Dec 21, 11:03am 1640297030

We have extended our house and various other upgrades and have done many topups along the way (it always costs more than you think). What used to be a formality where the bank could see you had plenty of equity and were at no risk of default has now become a right pain where you are made to feel like they are doing you a favour and you have to say all the right things. And I don't think they wave the fees as easily as they used to now it costs them so much to do anything. So yes it is annoying because it's impacting me.

by iwantit2 | 24th Dec 21, 11:29am 1640298571

And that is the issue. Many consumers like yourself who can handle the debt and make financially sound decisions are being put through the wringer and now are suffering because these CCCFA has not been thought through enough, all because the government thinks theres an issue when there isnt one to start with and now have created an another issue.

by JimboJones | 24th Dec 21, 11:38am 1640299122

A simple fix would be: if they have enough equity then no more questions asked. You should be allowed to make your own decisions about income and expenses etc. Sure if the bank doesn't want to give you the loan because they think it is risky, then that is fine.

by MortgageBelt | 24th Dec 21, 12:55pm 1640303714

The bank directors are liable for $200k fines etc if they are found to not follow the new CF laws. So hence the strict adherence to the code. Credit / finance is the biggest input into the economy apart from wages so this tightening will have a wide effect on the overall economy not just pausing the housing market.

by Nifty1 | 24th Dec 21, 1:00pm 1640304026

Equity doesn't pay the bills

by JimboJones | 24th Dec 21, 1:44pm 1640306682

Isn’t paying the bills your own business? Why do the government need to check I can pay my bills? In this case if I can’t I lose my house and the bank should be fine, what’s wrong with that? Maybe the bank should be required to check I understand that possibility.

by kiwiana02 | 26th Dec 21, 9:11am 1640463088

It’s not the government checking you can repay yr loan, it’s the bank. The govt has just reset the prudential rules, and about time too imo. Household debt in NZ has become very high, which poses a big financial stability risk.

by company of heroes | 24th Dec 21, 1:46pm 1640306799

The thing is that equity can go negative, that's why they have to ask lots of questions to make sure you can pay with your income to protect their lending.

by JimboJones | 24th Dec 21, 1:58pm 1640307528

Depends how much equity. In my case it was 75%, if house prices dropped that much I would be the least of their worries.

by Jaf | 24th Dec 21, 10:35am 1640295344

Responsible lending? That was the last thing the banks & other financial institutions may have done in the past.Top-up loans freely offered based just on the perceived appreciation of the collateral. Absolutely no assessment of affordability for the increased amount. No prizes then for guessing why they & the RE lobby are so worked up against the CCFA!

by iwantit2 | 24th Dec 21, 10:54am 1640296440

I am not sure who you get your lending from, but I have always have been assessed that I will be able to pay back the loan amount. All financial lenders have processes they use to determine the amount they lend. Are you just another who think banks are evil?

by Colin Nemo | 25th Dec 21, 10:15am 1640380525

Loan serviceability is purely a check box exercise, once credit has assessed that you meet the minimum benchmark whether you can or can't actually repay is a personal problem. If a deal is borderline, the lenders will harrass the credit assessors to push it across the line to hit their monthly lending quotas and get their bonuses/ commissions, everyone can then keep their jobs. Read your mortgage application and contract T&Cs, more than likely, there'll be a clause put in there like in AU that the borrower would need to self-certify that they can afford and repay the loan, this will force the responsibility back onto the borrower and the lender can get away with the deal scott free.

by gnx | 26th Dec 21, 10:35am 1640468143

Loan serviceability is also about repaying the loan and not going broke... over the 20-30 years of the loan.Not just the paperwork.

With inflation being forecast to hit 6% many can now only pray its transitionary because otherwise interest rates could be forced higher and longer than people could conceive a few years back.

The former reserve bank governor was of the opinion that at some point real interest rates will rise and force house prices to revert to their long term mean of three. This could occur over a period of 2-3 years and would mean 70% falls.That’s why they bought in LVRs in 2013! The risk has been known for so long that this could happen but every man and his dog has ignored it.

We just kept closing local manufacturing plants and it helped keep inflation low.We closed so many sawmills, we closed the James Hardie factory....but now your Chilean bit of skirting board in placemakers or your linea weather board has an extra 6% of inflation just from shipping costs... let alone ex-plant price increases.

Good luck if your retirement plan is based on highly leveraged residential property investment.... you might be about to need it.

by Carlos67 | 26th Dec 21, 11:03am 1640469784

Inflation is never transitory in the way they are trying to represent it. They are suggesting that prices go up and then return again to where they were and this pretty much never happens or a liter of petrol would still be under $1. Prices will continue to go up and will just get pinned there.

by kiwiana02 | 26th Dec 21, 12:16pm 1640474188

Your last sentence is actually what they mean by transitory. That is, prices increases don’t continue, like in a wage price spiral. Also, prices across the board aren’t increasing.

by Brock Landers | 27th Dec 21, 6:13pm 1640581994

Exactly as planned by the criminal central bankers. Prices go up, and stay up.

The antidote is sound money - Crypto.

by Carlos67 | 28th Dec 21, 10:52am 1640641927

Crypto as it currently stands is a joke. The technology however will be used by central banks as a digital currency that they will release. At this point your Bitcoin will become worthless .Bitcoin is not legal tender, the banks will kill it.

by Squishy | 24th Dec 21, 11:42am 1640299343

Good news: Omicron is 70% less likely to send you to hospital and hospital stays are shorter.

Bad news: Booster effectiveness drops off within weeks so those vaccination programs will likely be very low impact.

We are very rapidly closing in on the endemic phase.

by colinchch | 24th Dec 21, 11:58am 1640300330

An interesting study from the US

https://www.deseret.com/coronavirus/2021/12/21/22848453/fully-vaccinate…

by JimboJones | 24th Dec 21, 12:00pm 1640300403

Anti vaxers might have the last laugh after all!

by mfd | 24th Dec 21, 12:52pm 1640303523

Not the 'Natural Immunity' crowd

"... the protection against reinfection by Omicron afforded by past infection may be as low as 19%."

https://www.imperial.ac.uk/news/232698/modelling-suggests-rapid-spread-…

by iwantit2 | 24th Dec 21, 12:04pm 1640300675

Even if this is true, can't say the Government will change anything in how they handle this. I thought 2022 would be alot better than the last two years but now im starting to think it will be much the same. Hold us ransom until we get 90% boosters then perhaps open the boarders to countries that have no covid...ohh but wait then there's winter, so keep us locked up because we havn't done anything to improve our hospital system in the 2 years to handle covid and the general winter increase in hospital admissions.

by HW2 | 24th Dec 21, 12:34pm 1640302478

""Hold us ransom until we get 90% boosters"

Then the covid queen will be handed the Mutiny on the Bounty Award for 2022. Can you imagine the situation

by MortgageBelt | 24th Dec 21, 1:15pm 1640304954

We are just at the beginning of this COVID era unfortunately. Despite Omicron being less dangerous.

What is dangerous is distancing and it’s effect on many diseases & lack of immunity, and the 100% reliance on a rapidly less effective vaccination.

This writer was proven correct - with boosters now required every 3 months and the Pass system required for all interaction and financial viability.

https://www.juliusruechel.com/2021/09/the-snake-oil-salesmen-and-covid-…

by Dick Mortensen | 28th Dec 21, 5:40pm 1640666455

Bad news. You have no idea how kiwis will react to Omicron, it is not even here. Yet. Good News, don't risk the booster. We are not waking up to the endemic stage, we are waking up to the idea that Covid victims are limited to a small amount of people with comorbidities and weak immune systems.

by streetwise | 24th Dec 21, 12:04pm 1640300668

FOMO is an altogether new phenomenon; I have never ever seen it until recent times in my nearly 74 years on this earth. It results, as I've said until I'm blue in the face, from the rapid house price escalation caused by the influx of wealthy immigrants (i.e. those able to afford a house)....Chinese, South Africans, Indians.....in the past 25 years without a corresponding increase in supply of houses and infrastructure.

I can anecdotally prove this because 5 townhouses almost surrounding me are owned by the above and 3 units in my sister's block of 6 home units are owned by the same. They are all rented out to born and bred New Zealanders.

The Key Government expedited this process on behalf of all business under the guise of there being a skill shortage. Ironically, this lead to many unskilled immigrants arriving when farmers and smaller businesses decided that with cheaper imported labour they could run their farms and businesses profitably without having to work so hard at their business as had always been the case in the past.

by tomjones_04 | 24th Dec 21, 3:53pm 1640314403

That’s the reality I’m afraid. NZ aren’t doing a great job of looking after their own… especially the young

by Dick Mortensen | 28th Dec 21, 5:48pm 1640666915

Correct but central bankers with their Keynesian policies, of zero interest rates, QE, bailouts, government deregulation has expediated the process. Guess what, Key is a banker!

by The Person | 24th Dec 21, 1:11pm 1640304708

Ukraine has been an independant country for 30 years now. It's no longer a region of Russia, so we should stop calling it "the Ukraine", and call it by it's actual name.

A common mistake of US presidents it seems.

https://time.com/12597/the-ukraine-or-ukraine/

https://foreignpolicy.com/2019/10/05/ukraine-name-insult-war-russia-geo…

by JimboJones | 24th Dec 21, 1:56pm 1640307402

Thanks, interesting. Surprised Obama got that wrong, he’s probably mortified.

by Wrong John | 24th Dec 21, 2:17pm 1640308664

Every time I played monopoly the banks always won. It's still the same out there today. We are meant to be grateful if we can become freehold during our working lives & retire with some dignity with perhaps the odd trip or two. The reality is that many don't. I'm a boomer & we are a very lucky generation. The first generation of three, in the early 20th Century, not to be shipped off to a war on the other side of the planet. Very lucky.

But there are many of my lucky generation that haven't made it to retirement freehold. You don't have to look very far to find them. They've had their whole lives to work & build a family, settle down & enjoy their time. But, for whatever reason, they failed. Why? Because they made bad decisions? Yes. Because they got divorced? Yes. Because they partied too hard right the way through? Yep. And also because many of them didn't realise that a) just how lucky they were b) how fragile life can be & c) how short this life is when you don't have a reason to live. They blew it. With hindsight, I realise that our national education system is somewhat mediocre & that as an individual, you have to want to learn to get on. In fact it never stops. I learnt more in my 5 years offshore in my early 20's than I ever did at school. It was the best education I ever received. It nearly killed me, but it taught me how to survive & has guided my life ever since. Don't waste your time at university. Go travelling. Get some real world experience & you'll end up with more houses that way.

by Lapun | 24th Dec 21, 2:42pm 1640310141

Education is overrated. If you learn determination and common sense you can succeed. Just today heard of a part Māori kiwi brought up by a hippie mother in poverty. He is barely able to read but by his mid-thirties has a wife, a kid, a small house on 4 acres about 40min drive to Auckland and a couple of investment properties. No inheritance, barely able to read but he is a reliable hard-working builder. His sister is a hair-dresser who has done well too.

by Waikatohome | 24th Dec 21, 4:07pm 1640315246

I think the moral of your story is that hard work and making good decisions gets rewarded. Academic kids get ahead by doing well in education and going into a profession. More practical kids learn a trade. The right route to prosperity depends on the individuals skills and interests.

by Dick Mortensen | 28th Dec 21, 5:31pm 1640665860

Crazy kiwi mentality. Life's success is measured by how many houses you own. Do you maybe think that's the problem here?

by Albert2020 | 24th Dec 21, 6:33pm 1640323991

Apparently the CCCFA not only restricts lending but also the ease to pay that lending back. Westpac used to have a function on there online banking platform that allowed you to increase minimum repayments up to 20% above minimum. When I couldn’t find the function anymore I asked why and my bank manager said it has recently been removed due to the CCCFA? I was like wtf? That doesn’t make any sense?

by MortgageBelt | 24th Dec 21, 5:18pm 1640319518

Yes, that really signals that banks are going to apply pressure on existing borrowers as well as new.

And to keep higher original repayments in place by removing the options to stretch out repayments.

Are they foreseeing more borrowers getting in difficulties in the near future - so trying to claw back as much as possible in the meantime?

by HW2 | 24th Dec 21, 6:21pm 1640323281

Fixed rate mortgage allows 5 percent higher repayments I believe

by Albert2020 | 24th Dec 21, 6:24pm 1640323498

Westpac allows you to pay 20% above your minimum fortnightly payment. Up until recently you could increase and decrease it with a slide of a button.

by JimboJones | 24th Dec 21, 6:28pm 1640323714

ASBs app still lets you increase but I don’t think you can then decrease.

by Solid_Granite | 24th Dec 21, 8:35pm 1640331312

That's interesting. Maybe the whole tightening of credit rules means they might have to start charging prepayment fees for early payment, and the slider bar complicates that.