No time to waste, rates move up pronto and comprehensively

Personal Finance / news

ANZ moves fast after the OCR rate hike, raising its floating rates plus a full range of other home loan rate increases, with others likely to quickly follow

[updated]

13th Apr 22, 5:25pm by David Chaston

Image sourced from Shutterstock.com

Wednesday's Reserve Bank 50 basis points Official Cash Rate (OCR) hike to 1.50% brought a full rejoinder from the largest home loan lender in the country.

ANZ was the first to move, passing on the full increase to its floating mortgage rates. Not only that, it has raised fixed rates at the same time, as well as term deposit rates.

BNZ was quick behind it, but only for its floating rates. And not for the full OCR change.

Here is the running tally of bank changes to floating rates which we will update as each announcement is received.

Floating mortgage rates	Prior rate	*change*	New rate	Existing customers,
	%	bps	%	effective date

RBNZ OCR	1.00	+50	1.50	13 April 2022

ANZ	5.04	+50	5.54	3 May 2022
ASB	4.85	+50	5.35	4 May 2022
BNZ	5.15	+40	5.55	4 May 2022
Kiwibank	4.50	+50	5.00	2 May 2022
Westpac	5.24	+30	5.54	3 May 2022

Cooperative Bank	4.95
Bank of China	3.95
China Construction Bank	5.00
Heartland Bank	3.50
HSBC	4.99
ICBC	4.50
SBS Bank	4.79
TSB	4.79

We will separately report the fixed rate increases which range from +20 bps to +40 bps, and separately again the term deposit rate increases which range from +5 bps to +25 bps.

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149 Comments

by Yvil | 13th Apr 22, 5:34pm 1649828096

Unsurprising that floating rates are following the OCR hike. Fixed rates, on the other hand, are rising, more due to the ever increasing swap rates and the banks very narrow NIMs (Net Interest Margins).

Of note is the lower increase in deposit rates of +5 to +25 bps compared to the fixed rates increase of +20 to +40bps

by Albert2020 | 13th Apr 22, 5:55pm 1649829325

Tell that to Mike Hoskings and Ashley Church who don't seem to grasp the concept of swap rates and their influence on retail rates

by Averageman | 13th Apr 22, 7:06pm 1649833568

Both property investors. Take that into consideration when they talk. #vestedinterest

by vman | 13th Apr 22, 6:37pm 1649831834

Yes,the Hosk will be up early trying to put his positive spin on the housing market whilst at the same time suggesting everything else about the economy & this country is going to hell in a hand cart according to him..."happy days"

by fortunr | 13th Apr 22, 8:10pm 1649837430

Yep, just another case of property investors with little clue of how the economy and interest rate markets actually work.

by Yvil | 13th Apr 22, 8:55pm 1649840151

A property investor's biggest expense is the interest paid on the mortgage, therefore most property investors have a very good understanding of how interest rates are set.

by hum | 13th Apr 22, 10:29pm 1649845741

I don't think someone spending 20% of his income in countdown will make him have a very good understanding on how the shelf price is set.

by Yvil | 14th Apr 22, 7:38am 1649878738

Shelf price at the supermarket is not interest rates, it's inflation, you're confusing the two. Yes they're linked but not the same.

by Fitzgerald | 14th Apr 22, 7:00am 1649876414

If property investors had a good understanding of how interest rates were set, they would have sold 6 months ago when swaps started 🚀

by Yvil | 14th Apr 22, 7:41am 1649878867

You're confusing short term speculators with property investors. There's no reason to sell for a long term investor. A dip in price is part of the investment, just like a big gain is as well.

by Fluffybunny | 14th Apr 22, 8:50am 1649883025

price goes up... price goes down... rents get deposited in my account no matter what.

Though I purposefully seek cashflow over leverage

by WellingtonInvestor | 13th Apr 22, 11:33pm 1649849615

Makes no sense that on call savings rates aren't increasing by the OCR rise imo. They ripped the rates down when the OCR was dropped in 2020. And they have barely moved since then.

by Zen20 | 14th Apr 22, 9:05am 1649883941

Blardy Ockers - no surprises there ...

by Colin Nemo | 15th Apr 22, 4:37pm 1649997463

IMO Banks would not really have to compete for retail deposits to meet regulatory capital ratios since the introduction of the FLP from the RBNZ however, this will probably change after Jun/ Dec 2022 when the program drops off. If you consider this as a factor, this could be why banks are not anxious to pass on any rate rises to retail depositors bc why would the bank give away money that they don't have to.

by taimaiakka0 | 13th Apr 22, 5:48pm 1649828904

No time to waste, rates move up pronto and comprehensively

Cannot say the same about RBNZ.

Inflation 7% Plus and OCR 1.5%....Is it still not too low by any economy standard.

by fortunr | 13th Apr 22, 8:14pm 1649837663

The RBNZ are so late and behind that it is not even funny. It is going to be even less funny when they realize that they will be forced to raise rates even more aggressively once they finally understand that the cost for being so tardy will be an inflation phenomenon progressively more and more difficult to eradicate.

by AJ123 | 13th Apr 22, 8:23pm 1649838209

It is not at all justifiable to have inflation above 7% and OCR 1.5% by any means.

It is like if your kid flunked all exams and surprisingly cleared one subject then parents always praise them so that he gets motivated to achieve the same result next time.

by speckles | 13th Apr 22, 5:42pm 1649828576

Thought it was already priced in except floating rates.. opportunists?

by stjohn | 14th Apr 22, 9:12am 1649884359

Welcome to the New Zealand economy. The profit making haven of the world.

by RickStrauss | 14th Apr 22, 9:44am 1649886270

A debt farm.

by kpnuts | 13th Apr 22, 5:45pm 1649828749

all you need to know about banks and ANZ in particular - OCR up .5

charges Variable rate - up 0.5

charges Fixed rates - up 0.2 to 0.4

PAYS deposit rates - 0.05 to 0.25

by 2022 | 13th Apr 22, 5:48pm 1649828922

And some people were saying the OCR increase was already factored in.

https://www.stuff.co.nz/business/money/300565643/bnz-anz-move-to-raise-…

by Zack Brando | 13th Apr 22, 7:40pm 1649835610

Love your work David. I'll keep checking back.. I don't have a mortgage but I find all of this fascinating.

Are ANZ's floating rates tied directly to the RBNZ's Funding for Lending Program? Is there a reason why they passed along the full 50 bps increase?

by ex agent | 13th Apr 22, 5:59pm 1649829545

If you are trying to sell now do it quick. There will be increasingly less buyers who will be offering less than you are currently seeking. This is the time to be realistic and not greedy.

by Yvil | 13th Apr 22, 6:05pm 1649829921

Sell what?

by ex agent | 13th Apr 22, 6:06pm 1649830002

Are you being serious?

by Pragmatist | 13th Apr 22, 6:51pm 1649832687

ZB doesn't have a house to sell.

by Zack Brando | 13th Apr 22, 6:10pm 1649830213

I rent and as far as I know my landlords don't have a mortgage either. :)

I just like to keep an eye on market conditions.

BNZ +40 bps [floating]

by Smudge02 | 13th Apr 22, 6:34pm 1649831684

This is the time to be realistic and not greedy.

Unfortunately this will fall on a lot of deaf ears. The easy money mentality will not be subdued easily and there will be pain, self inflicted pain. Some believe the good times will go forever as thats all they have known.

by fullwasabi | 13th Apr 22, 6:04pm 1649829849

I hope you rich pricks are happy.

You guys get a cheap latte and the rest of us are financally wiped out by higher rents, mortgage repayments wages freezes/cuts and possible job losses.

The workers of this country will end up wearing the the worst of it, while you guys laugh all the way to your bank in you Ford Rangers.

Disgusting

by Yvil | 13th Apr 22, 6:10pm 1649830243

Hi fullwasabi,

I suppose your anger is understandable but it really doesn't help you. It doesn't make sense that "latte's" get cheaper or that rich people with mortgages are better off with higher interest rates. Also rich people don't drive Ford Rangers. Lastly, most "rich people" don't dislike people who are less affluent.

My advice would be, focus on yourself, what can you do to be better off?

Cheers

by fullwasabi | 13th Apr 22, 6:15pm 1649830545

"what can you do to be better off?"

Live in a country that allows a lttle bit of inflation because high wages and people in jobs are more important for wellbeing.

And also ensure that homeowners dont get stuck with Shylock-style interest on their loans, which is what is going to happen.

BTW, the latte might not get cheaper, but the barista will probably have to find an extra $200 to pay her rent/mortage.

by rjn1 | 13th Apr 22, 6:35pm 1649831736

Hi fullwasabi

I’m not a rich prick, and wouldn’t be caught dead driving a Ranger, but I find myself a little triggered by your attitude. No one here wants our economy to be ruined and people pushed to the brink by high interest rates. There is however, an undeniable reality - inflation at the level we are currently facing is worse than a period of higher interest rates for nearly every person you could think of, in the long run.

You may find the positive/relieved attitude to higher rates you’re seeing here a little hard to fathom, but maybe trust that a few of us really understand the mechanics off this that make your assertion that ‘a little bit of inflation is preferable’ so, so wrong. On the face of it you’re actually correct, but the definition of a little bit of inflation is roughly 1-3% - it should be clear to you that 7% is not sustainable and needs to be addressed ASAP.

I don’t mean to sound condescending, but you are thinking against your best interests. I hope you’ll take the time to educate yourself and grow out of this. Cheers.

by fullwasabi | 13th Apr 22, 6:33pm 1649831614

That is probably what homeowners will end up with after they pay the high interest rates forced on them by rich pricks like you who will throw thouands of people into punery for their term deposit.

by hootenany | 14th Apr 22, 7:33am 1649878386

I hate to break it to you but if you own your own home you are "rich prick" by may peoples definition. Interest rates aren't high they where just at insanely low levels and a lot of people borrowed based on them continuing to be low, and unfortunately they will suffer for that.

If you are rich you want low interest not high, you don't put you money in a term deposit. They borrow money and invest it in high return investments. Don't believe me watch an episode of Shark Tank, they seem to want their investment back in a few years, plus retain the equity in the company. I will state it again rich people don't put a significant amount their money in bank accounts and term deposits that is just dumb.

by Kiwi Tim | 14th Apr 22, 8:16am 1649880972

Working for a Private Bank in Sydney many years ago, can confirm you are 100% correct. Literally don’t think I saw one term deposit. All commercial bill lending, margin lending etc

by Carlos67 | 14th Apr 22, 9:27am 1649885232

What can I say I must be a remarkably dumb person to end up with a mortgage free home and a few hundred thousand in the bank. I think its easy to confuse dumb with greedy in your opinion. From my observation most people do not know when they have enough in life and its lead to the massive inequality we now have and its only getting worse. Some people don't know when to quit when they have made it and leave something on the table for others.

by Fluffybunny | 14th Apr 22, 8:18am 1649881092

We can't lower asset prices without increasing the cost of debt servicing.

Your frustration is miss directed. Make yourself a tea, Read some of the comments and relax...

by fullwasabi | 13th Apr 22, 6:39pm 1649831968

And we address it by throwing people out of work? Cutting their wages? Wage freeze? Rent increases? Mortgage increases? How is that "Good". THe workers of this country have had their wages held down for over 30 years, this is the best chance they have off getting themselves a decent payrise and you want to take it from them.

Have you no common decency?

by rjn1 | 13th Apr 22, 6:58pm 1649833133

It’s not good, it’s the least bad of two terrible options. It really just goes to show you can’t artificially keep an economy afloat without consequence, you simply delay the inevitable. People also need to be reminded that there is no free lunch, so if you choose to buy into an overvalued housing market when even the RBNZ Governor tells you not to, because you can’t control your FOMO and think rationally, you naturally subject yourself to the risk of that going wrong. That’s not to say I don’t feel sorry for folks who’ve naïvely listened to the charlatans - there should be consequences for public commentators who speak such unfounded drivel about how the housing market is a one-way bet. I hope they are crucified by the church of public opinion.

by fullwasabi | 13th Apr 22, 6:59pm 1649833199

So you DO condone throwing people out of work, and for some, they may not be able to find a job ever again, not with the borders opening.

by Fluffybunny | 14th Apr 22, 7:39am 1649878774

Un Employment is at record lows right now. Anyone with a pulse can find a job. And the boarder being closed is the reason.

If you are worried about job security, then you should be happy boarders a closed...

by fullwasabi | 13th Apr 22, 7:03pm 1649833417

Maybe we should take our chances with inflation, at least people will have spending power. I dont see how forcing people out of their jobs and making them find hundreds of dollars in in extra $$ for their housing helps anyone. Perhaps you should have your term deposit take a haircut. You have had a free ride through most of your life, with Housing corp mortagages, jobs for life, and a payrise every month, but a lot of people out there havent had a payrise for YEARS.

by Trickledown | 13th Apr 22, 7:08pm 1649833739

In what sort of deluded world does inflation go hand in hand with spending power? You do realise the very definition and impact of inflation on $1 today?

by fullwasabi | 13th Apr 22, 7:10pm 1649833808

Low inflation = wage supression. SImple as that.

by Trickledown | 13th Apr 22, 7:16pm 1649834167

They don’t necessarily move with causation but inflation harms more than is helps and the economic evidence is very clear on that. Inflation will keep going even when wage expectations and bargaining falls flat due to businesses inability to pay and the resulting crash that would occur from that.

A moderate level of inflation (0 being unreasonable and impractical) is better to me than rampant price inflation (and the asset bubble that got us here).

by Fluffybunny | 14th Apr 22, 8:56am 1649883413

read some of the comments of people who (despite of your insults and language) are coming back with some insight.

7% inflation hurts everyone.

Do some people have more than you? yes.

Is that going to change by dropping rates? nope.

I will just change the actions of those who bother to LISTEN and self educate

by rjn1 | 13th Apr 22, 7:09pm 1649833797

Take our chances with inflation to protect spending power? Are you suggesting I’m a boomer? I’m the first of the millennials, chump.

by fullwasabi | 13th Apr 22, 7:11pm 1649833862

Do you not want wages to go up and have decent public services?

by rjn1 | 13th Apr 22, 7:23pm 1649834595

Yes, what’s your point?

by Rumpole | 14th Apr 22, 8:24pm 1649924673

Decent wages and good public services do not go hand in hand. The current situation is high public service wages and lousy services due to lousy management unable to ensure effective delivery all overseen and over regulated by a collection of idiots impersonating a Government. Only a radical change of direction will cure but the chances of NZ voting for this are less than boxing day falling on good friday.

by Zack Brando | 13th Apr 22, 9:27pm 1649842051

@fullwasabi

I'd rather see investors suffer than FHB. If FHB can lock into a rate they can live with, well that's something.,

If inflation keeps up at this rate, FHB will have their mortgage debt inflated away.

by Fluffybunny | 14th Apr 22, 7:52am 1649879525

Your not actually serious about any of this right?

Or like maybe your in a hard spot financially and your venting?

You'll note that even with your constant insults, most people here are taking u at face value and providing actual good advice...

With unemployment down so low, wage inflation has never been higher. If you can't figure out how to take advantage of this right now.. Then The issues not with the ocr rate...

If you are serious... Can I suggest you read 'the barefoot investor' and do exactly what he says..

by fullwasabi | 13th Apr 22, 6:41pm 1649832066

By the way, 7% inflation is a decent price to pay for a decent wage, and full employment.

But, but, too much for some people, who want wages cut by at least 25%

by Trickledown | 13th Apr 22, 7:17pm 1649834249

We’re beyond maximum sustainable employment!

by Brock Landers | 13th Apr 22, 7:35pm 1649835336

Mate. An inflationary spiral is guaranteed to crash the economy and put almost every single person out of work.

by speckles | 13th Apr 22, 9:49pm 1649843382

Ha, when people phrase it like that they know they are being condescending otherwise you will not excuse yourself.

From casual observation a number of posters here are positively gleeful about the interest increases.

Very few here have the full picture, many have somewhat of a handle on monetary policy and yet few identify higher interest rates are not a silver bullet to inflation.

Very few here really understand the fiscal effects of Government expenditure at the micro level, micro level taxation issues of this covid period and what this will mean.

by rjn1 | 14th Apr 22, 6:00am 1649872820

Ok fine. I could have said, I don’t like to sound condescending, but I’m going to need to to try and get my point across on this occasion - what’s your excuse?

I think we all understand that tighter monetary policy is just one rather blunt tool in the fight against inflation, but it’s the subject of the article we are commenting on.

by Fluffybunny | 14th Apr 22, 9:00am 1649883642

Yes i'm gleeful that rates are going up.

Suits me just fine. I fact I've been actively preparing for it over the past couple of years..

by JamesM | 13th Apr 22, 6:23pm 1649830999

Hi fullwasabi-

Im likely a rich prick in your eyes. I didn’t get this way through anger/blaming others. I worked hard (since I was 13) and put myself through University whilst paying off the loan at 8%. My advice to anyone is live within your means, save and invest a portion of your earnings, educate and train yourself to receive higher wages and stay positive. Follow this basic advice and you will get ahead. Once you get ahead invest, invest, invest.

by fullwasabi | 13th Apr 22, 6:31pm 1649831494

I would love to tell you where to stick your Calvinism, but I would probably get moderated out of this site.

Its all very good to go on about that, but I dont think it is morally justifiable to hike interest rates and financially ruin people.

by Sendatsu | 13th Apr 22, 6:43pm 1649832198

We all understand your point. However, low interest rates caused this mess and keeping them around is not a solution. The damage is already done, and you're right, those that will get hurt the most are the young.

If that's you, then go overseas. NZ is no place for us. I would go tomorrow, but my other half is not so keen.

by fullwasabi | 13th Apr 22, 6:45pm 1649832301

Dont you understand. Wellbeing is more important than your shitty term deposit.

Low interest rates lead to high wages, full employment, and people are just better off across the board.

High interest rates = misery and hardship.

by Rhumline | 13th Apr 22, 7:04pm 1649833465

Appreciate your anger, but this is just mouthing off. The beauty of this site used to be that people (including polar opposites) put a bit of analytical thinking into their comments.

by fullwasabi | 13th Apr 22, 7:06pm 1649833586

All I can see is a bunch of rich pricks who want to sqeeze every cent out of everyone else. I bet you also want US style healthcare imposed as well.

by Fluffybunny | 14th Apr 22, 8:04am 1649880272

Your just ranting...

by rjn1 | 13th Apr 22, 7:05pm 1649833542

Don’t you understand? High wages paid in worthless currency are no use to anyone. Have you actually stopped to properly study the history and current principles of inflation-targeted monetary policy? You sound like a proponent of sports events where nobody looses and everyone gets a participation medal.

by fullwasabi | 13th Apr 22, 7:07pm 1649833658

Targeting inflation holds down wages. Plain and simple.

Some people have gone for decades without a decent payrise? Why do you condone it?

by rjn1 | 13th Apr 22, 7:13pm 1649834039

Not in real terms. The biggest driver of wages is productivity, do some readiing for goodness sake.

by refactornz | 14th Apr 22, 8:53am 1649883210

High wages paid in worthless currency are no use to anyone

That's not true. They are useful to people wanting to clear debt in that same currency.

by rastus1 | 13th Apr 22, 9:41pm 1649842866

I think you need to call a help line.

by Fluffybunny | 14th Apr 22, 8:22am 1649881360

The wider system holds down growth. Rates and debt are just constructs we place over a physical world.

Look up 'limits to growth' etc.

Decades? Your just ranting. It's very very easy to find work right now. Never been a better time to get a pay rise..

by Fluffybunny | 14th Apr 22, 9:16am 1649884585

which young?

I bet people in their teen would welcome a massive crash.

Also never been a been a better time to leave uni or school and get work? with such low unemployment there are plenty of opportunites to seek new experience or higher station with less competition.

I started my current profession in London just before the GFC. I had to fight tooth and nail just to get interviews...

by jeremyr | 13th Apr 22, 7:14pm 1649834075

I don’t think you get it. No one is raising interest rates to ruin people.

The simple fact is that a labour govt was elected. As soon as that happened I felt sorry for the low income learners and young families as they were absolutely going to wear the result of labour incompetence when it comes to economic matters. Everyone looked at me funny, but, I digress.

What is happening here is simple. The government is incompetent, they have borrowed too much money, and slashed interest rates which has pumped artificial demand in the economy and hidden their uselessness behind false economic outcomes driven by debt. This has in turn generated excessive inflation outside of the mandated reserve bank range. The Ukraine war has made it worse but the big play is incompetent government.

Many speculators have taken advantage of this, which is risky. Many have come in and out of the property market and made some money. This is normal human behaviour.

Other countries are now raising rates to protect against inflation, and since our economy is small and relatively unsophisticated we have a higher risk premium to pay on the open market. So, we must raise rates here to protect our own currency otherwise the value of our dollar will go down and imported goods will go up further in price, meaning even higher inflation and more interest rates to cover it.

So, no one is trying to ruin anyone. All that is happening here is an incompetent government are in their death throes whilst trying to avoid a crash of the economy. Anyone who put themselves in a position to be wiped out by this turn of events should probably have done their research on what happens in this scenario.

I for one did not take advantage of low interest rates to enrich myself, as I could see this scenario coming from the start, and it was a risky proposition. So, I kept my investments overseas, and fixed my mortgage here at 3.5% out till 2027, which I am happy with. This does not make me a rich prick that is ruining people either. All it means is that I was able to see the stupidity of slashing interest rates and borrowing money for what it was and stay well away from it. If you have risked everything and are about to lose everything, then, there is nothing anyone here can do about it, and you should not blame anyone here for it.

by RickStrauss | 14th Apr 22, 9:52am 1649886728

The simple fact is that a labour govt was elected... they have borrowed too much money, and slashed interest rates

Eh...better at least get your players correct.

The Reserve Bank slashed the interest rates and pumped the market with billions of QE while dropping LVR limits, overstimulating the market. Borrowing during the crisis is not high compared to other countries, and is similar to what National did post Chch earthquake.

Meanwhile, speculation had been encouraged by successive governments pandering to the entitled by subsidising property, exempting it from reasonable taxation, and constraining supply. This penalised productive work in comparison, where income is heavily taxed.

This is a problem of successive governments kicking the can down the road while their entitled MPs and voters extract value from the economy. The debt bubble can only be inflated so high though...

by Kiwi Tim | 13th Apr 22, 7:20pm 1649834438

I get that your angry, a lot of us are but what your saying makes no sense. If they reduced interest rates you know what would happen? These rich pricks you speak of will be more houses on cheap rates, your food will cost even more and because our country is useless at growing productivity you wont be paid any more

by DDH | 13th Apr 22, 7:41pm 1649835696

Hi,

Here is what I like about these hikes. They will decrease the price of houses. Inflation will be painful but it won't last.

Afterwards my 68 year old guy at work will be able to take his 500k divorce settlement and buy himself a home with money left over to prop up his pension.

He will be able to move out of his house bus after one more winter and have a home to live his days out. While still being able to work because his friends are at work.

This is short term pain for long term gain and it's not just rich people that will win.

by JamesM | 13th Apr 22, 7:46pm 1649835997

You need some perspective fullwasabi. We are at historically low interest rates and minimum wage has increased 25% in the last 3 years. Living with inflation at 7% means your buying power decreases by 7% p.a.

by Fluffybunny | 14th Apr 22, 7:58am 1649879925

Just so we are clear. I assume you're over extended and have just realised what your new payments are going to be?

Or you just want to brighten everyones morning with some well researched insight?

by Fluffybunny | 14th Apr 22, 8:09am 1649880550

I don't think it morally justified to insult strangers you don't know.. But hey...

Your anger isnt going to change capatalism. Just prohibit your ability to think objectively and be open to advice.

by Fluffybunny | 14th Apr 22, 10:31am 1649889112

Do you own a house?

Do you work three jobs?

by Craigjw | 14th Apr 22, 11:46pm 1649936765

Lol the old "I worked hard" cliché. 😂🤣

So do cleaners, construction workers, and a raft of other workers, professionals, educated and uneducated New Zealanders.

But they don't become rich pricks...

Only a special sort of rich prick uses that old cliché, along with those who nod approvingly with an upvote.

It is proof that there is absolutely no correlation between being a rich prick and having a higher than average IQ.

by Yvil | 13th Apr 22, 8:54pm 1649840074

There you go fullwasabi, then move to OZ, they have higher wages and so far, lower inflation. I hope that works for you (truly), just be mindful, they also have people with money there, or as you call them "rich pricks". Hating them doesn't help you, focus on yourself.

by Zack Brando | 13th Apr 22, 6:37pm 1649831853

lol Labour and the RBNZ were the ones pumping money into the domestic economy. With more money chasing the same number of essential items [housing] of course prices will increase.

Other than America, per capita New Zealand "printed" the most money out of any OECD country. Unlike the USD the NZD is not the World Reserve Currency.

Investors can hardly be blamed for these macro decisions. Saying that; higher interest rates, council rates, insurance and repair bills.. coupled with the potential exodus of renters could see house prices continue to fall.

Recent investors might find it hard to sell at a profit, especially after real-estate-fees. Recent FHB unable to keep up with repayments are welcome to sell, eat a small loss and maybe walk away with some of their deposit (again; after real-estate-fees)

If a large housing crash were to manifest, FHB are welcome to go bankrupt and save up a new deposit as they lick their wounds.. ideally they would buy back in at a more affordable price.

by fullwasabi | 13th Apr 22, 6:43pm 1649832194

Love that empathy there. THey might not get a chance at homeownership.

I guess a wealthy landlord like you might snap it up and rent it out at 90% of their income, raking it in, while your tenants have next to nothing,

by Pragmatist | 13th Apr 22, 6:54pm 1649832881

You are barking at the moon mate. Perhaps come back when the blind rage has subsided.

by fullwasabi | 13th Apr 22, 6:58pm 1649833106

But I am right though. Your resentfulness of FHB's having access to cheap finance and people being in work with high wages is disgusting. You are very much an enemy of humanity.

by Pragmatist | 13th Apr 22, 7:01pm 1649833283

*shrug*. Rant on.

by fullwasabi | 13th Apr 22, 7:05pm 1649833510

Im not the one who wants to stick up interest rates, force people to lose their jobs or take paycuts, and pay higher housing costs with said paycuts, all so my term deposit gets a good return.

by Pragmatist | 13th Apr 22, 7:14pm 1649834098

Neither am I, nor is Zack. Hence the barking at the moon comment.

by Sam B | 14th Apr 22, 8:44am 1649882641

wasabi - I am low-income renter. With no term deposits. (btw, rich people haven't had term deposits for years. They've made fortunes in equities - unearned wealth, juiced by those low rates you love so much.) Don't even own a car.

The pain that you see is *already baked in*. It was baked in when we decided, collectively, that it was OK for NZ's average property price to be $1m.

If you have a mortgage on the house you live in, and are hit hard by the rate rises, I have sympathy for you. But the truth is, if you even *have* a mortgage, you are in the upper half for wealth. Those families living in garages and vans - food and rent inflation hits them hard. Refusing to raise rates sacrifices their ability to eat, to save property owners (and even more, property speculators with interest-only loans, who will be hardest hit, relatively, by rate rises).

If you are on a moderate income and have a mortgage you can't afford at these relatively low rates, now is not the time to be angry. You should have been angry when you were looking to buy and realised how out of whack house prices are with real incomes. But we've been supine, pathetically grateful for the service jobs provided by this fake, borrowed growth, and the obvious insanity of it passed us by.

by Solve_it | 14th Apr 22, 9:04am 1649883843

Great comment

by Fluffybunny | 14th Apr 22, 10:27am 1649888855

What are you trying to achieve here?

by Carlos67 | 13th Apr 22, 10:13pm 1649844815

I suggest you read his profile Prag, someone kicked him in the balls 3 days ago.

by Zack Brando | 13th Apr 22, 7:12pm 1649833968

I rent dude and own no investment property.

by Mannering | 14th Apr 22, 8:12am 1649880767

Dear fullwasaabi:

Insofar as you are using the term so freely, would you pleaseg ive us your definition of "rich'>. Also, I think it might be a good idea to go easy on the wasabi mate.

by RickStrauss | 14th Apr 22, 11:48am 1649893726

Investors can hardly be blamed for these macro decisions.

Investors have infested parliament and central banks for decades now, and have resisted any changes away from ever-ongoing pumping of property prices. They have shrieked against any balancing of taxation vs productive work.

Their entitlement and regulatory capture has helped create this ridiculous economic problem we are now in.

by hotwired | 13th Apr 22, 7:10pm 1649833831

Do you have 3 jobs? I did for a few years to get on the property ladder and so did my Dad, we are relatively rich, but we are not pricks nor do we have Ford Rangers.

by fullwasabi | 13th Apr 22, 7:13pm 1649834018

People shouldnt have to have 3 jobs to have a decent life.

Why should people have to go through hardship and suffering?

Why are you so resentful of high wages, public healthcare and affordable mortages

by Zack Brando | 13th Apr 22, 7:31pm 1649835092

Life is suffering and we ALL have to drink from that cup.

I recommend you read or listen to The Richest Man in Babylon:

https://youtu.be/wglndSWrvsM

by msp | 13th Apr 22, 9:26pm 1649841973

youre right about lots of things wasabi, but wrong about shouldnt have multiple jobs to have a good life...many of us have been or are there...whats changed is property investors driving house prices to the moon to make a tax free gain then whining when any govt tries to tax it...all this mess is about housing...take the cost of housing down and theres money and time for everything else...but Canadas in the same mess so its more neo-liberal economics stupidity than a particular govt...

A newly arrived immigrant investor just bought 19 houses in our small town...thats 19 renters who will pay as much in rent as a mortgage but can't access finance...that makes me as angry as wasabi...just not quite as ready to storm the bastille

by GV 27 | 13th Apr 22, 8:51pm 1649839899

Ah yes, you either work 42 jobs or you're out irresponsibly buying brand new utes on dealer credit at high rates. Definitely the hyper-capitalist continuum we want to normalise in NZ.

Or, you're just some average family who will have hundreds of dollars less a month after the extra cost to service the debt on a modest family home, and have a crack of paying it down before you retire (if you actually get to retire at all).

But apparently the actual middle bit where most people in the bell curve actually live are invisible and we continue to froth over the outliers as if they're typical.

by Fluffybunny | 13th Apr 22, 11:25pm 1649849119

Appreciate your pain. But suggest you will find most people in this forum supportive and in agreement that certain things right now a pretty tough. Regardless of financial situation.

by Solve_it | 14th Apr 22, 8:23am 1649881420

This is the level of rage that you are going to start seeing a lot more of in people of my generation. Get used to it, you will be seeing a LOT more of it as things start unravelling over the coming years.

If you own / owned more than one property at any stage in the last 15 years, you are not just part of the problem, you are the problem.

While rage is usually not completely rational or controlled, the target is correct.

by Fluffybunny | 14th Apr 22, 10:16am 1649888208

I don't get it. If your younger and aspire to house ownership, this is GOOD NEWS. It's movement towards long term avgs. And comes with the possibility of a reset.

So on one hand there are complaints about the status quo but also people don't seem to be happy when the financial levers maintaining the status quo are reversing?

If your in your 20s, The biggest asset you posses is time, Health, and earning potential. I'd happily give up my investment portfolio if it meant being 20s again.

And the ability to start saving for your retirement NOW.

Serious question. Do you save?

by Sam B | 14th Apr 22, 10:29am 1649888995

We're talking about two different cohorts.

If you're youngish, and you've bought recently in this ridiculous market = you're screwed by rising rates, and it feels like the timing of it is unfair, you get smashed while those who piled in earlier are OK.

If you're youngish, and you haven't bought - yeah, you're fine with rising rates, because it will push prices down and maybe make purchasing your own home a realistic possibility when it wasn't before. Of course there's the risk of a property crash making you unemployed - but considering that even a 25% price fall is hundreds of thousands of dollars, you'd have to be unemployed for a long time before you were worse off than under the previous regime.

by Fluffybunny | 14th Apr 22, 12:34pm 1649896476

My personal view is that no matter what age, the best thing you can do is keep options open.

So regardless of age, don't ever ever over-extend on debt. And always be prepared for worst-case scenario.

by Solve_it | 14th Apr 22, 1:21pm 1649899265

Of course I don't. I pay a mortgage. Beggars can't be choosers.

by Yvil | 14th Apr 22, 1:52pm 1649901172

Well, if you have a mortgage on P & I, you're saving, it's the "P" component! Another often disregarded benefit of having a mortgage, the compulsory saving that comes with it. Each month, you get richer by repaying part to of your principal.

by Deadcatbounce | 14th Apr 22, 11:24am 1649892292

Hi Fullwasabi,

I completely understand your mood, but please do not get sour, it won't be hard forever.

Labor govt and RBNZ overcooked it, Jacinda's lockdowns and zero covid rules, costed me my business. Non deductibility of interest rates and forecast of interest hikes made me initially increase rent, but I knew this will not be enough to keep me afloat once the deductibility is phased out. Eventually I decided to sell both my family home and rental mid last year and I felt awful as I thought I lost everything I worked for since 2012.

but....I am laughing now as I landed a sweet management job in my industry, got rid off close to $800k of debt, which I would not be able to pay if the interests climb above 9%. I bought a nice mortgage free house with heated swimming pool, 20mins from my Greenlane office and there was enough left over money for a Ranger, small boat and a deposit to buy an entry level Akl rental in the future when the conditions are right again!

Cheer up all will be good, next year is the election year. Jacinda will lose, her anti landlord policies will be scrapped and we will be buying houses for a kiss from overleveraged population. I am expecting good times to be back in 3-4 years, if RBNZ continues increasing the interest rates. :)

by AdamJay1990 | 13th Apr 22, 6:40pm 1649832009

Yet vendors are still expecting the same house prices as when interest rates were 2%... How long do we think it will take for expectations to soften?

by rjn1 | 13th Apr 22, 7:22pm 1649834527

As soon as the general, house-vending public are educated in the basics of finance and asset valuation (don’t hold your breath).

by Just Some Advice | 13th Apr 22, 7:56pm 1649836565

Ok so jeremyr, JamesM, AdamJay1990 and hotwired are all the same person lol

by jeremyr | 13th Apr 22, 8:06pm 1649837180

No….but we seem to all have the same sort of common sense.

by Just Some Advice | 13th Apr 22, 8:08pm 1649837286

Oh, ok.

by AdamJay1990 | 14th Apr 22, 9:44am 1649886264

What? "Same opinion = same person"... alight mate..

by Room319 | 13th Apr 22, 8:10pm 1649837401

Well there is a world of pain coming to all parties involved in the arguments put forward on this site over the last 18 months or so.

Only the very very well off will emerge unscathed.

There are some truly dreadful results around the corner.

by speckles | 13th Apr 22, 10:00pm 1649844035

You are so right and so many here don't even see how its going to hit them, its not just interest rates.

by Fluffybunny | 14th Apr 22, 10:07am 1649887672

I'm not sure. Only people overly leveraged are going to be buried.

by nktokyo | 13th Apr 22, 8:13pm 1649837609

The time to lock in your loans was last July and for a few years. A lot of expert advisors mailed it in and advised clients to roll over for a year. Muppets.

by GV 27 | 13th Apr 22, 8:53pm 1649840038

We might be OK. I've got a very small portion coming off fixed soon; the rest is locked up for another two years. I only gambled with 10% of what's left on our mortgage. If things get really bad then in two years time, they may well be looking to lower rates to pick up the pieces.

It's my friends who are rolling out of fixed rates mid-year that I'm worried about. I'm guessing something will just bugger off to Aussie before then.

by Snow | 14th Apr 22, 7:47am 1649879272

It's my friends who are rolling out of fixed rates mid-year that I'm worried about.

Likewise. Have a couple of mates in mid 30's who've had a mortgage for a couple of years at least. They never talk about their financial situation but both have made comments voluntarily about things getting tight. Pretty shit, as one couple I think are considering starting a family, but made the comment about possibility of having to sell if rates keep rising.

by General Comment | 14th Apr 22, 8:18am 1649881090

It was more like last May. I locked in for 5 years back then because I had a growing sense of unease, while my mortgage broker was practically calling me names for fixing long. By July she'd gone suspiciously quiet.

I guess time will tell whether or not it was a wise move, but 3.19% was good enough for me - ASB raised first and I missed the 2.99% rate by a few hours. So close...

by Solve_it | 14th Apr 22, 8:28am 1649881706

Yep same here. 3.19% for 5 years. Thank goodness.

by rastus1 | 13th Apr 22, 9:47pm 1649843250

Well Mr Orr has certainly woken up the crazies tonight.

by Carlos67 | 13th Apr 22, 10:16pm 1649844990

Yeah the nut jobs are coming out of the woodwork of late. The moderation on here should be better, it should be constructive ideas anyone on a rant posting 20 times in one article should get axed.

by Brock Landers | 13th Apr 22, 11:28pm 1649849300

Can we cancel those that apologize for Putin while we are at it?

by Carlos67 | 14th Apr 22, 7:11am 1649877100

Always two sides to a story bud but if you only want to ever listen to one that's up to you. The truth is usually somewhere in the middle and our media is as controlled and censored as much as the Russian media. Do you seriously think that the USA would be happy with missiles just 160km from Washington ? They would be over any border smashing the shit out of anyone who tried it, hell they couldn't even handle missiles in Cuba. I don't support Putin what pisses me off is the double standards imposed on the whole world from the USA as the "World Police".

by Homer | 14th Apr 22, 7:34am 1649878464

Yip. But we’ve been programmed over the last year or three to only listen to only one side of the story, on most issues, and the ability to analyse anything critically is a lost art. We were taught those skills at high school once but now it’s not desirable to have a well informed population it seems !

by Brock Landers | 14th Apr 22, 7:57am 1649879864

our media is as controlled and censored as much as the Russian media.

That's some anti-vaxx level stupid right there.

by Carlos67 | 14th Apr 22, 9:33am 1649885581

Don't forget to keep on getting those Boosters Brock, maybe get them to mix in a bit of Prozac in with it for you.

by Brock Landers | 14th Apr 22, 10:46am 1649889964

SSRIs might be your idea of a fun party down in Hicksville. Prefer something a little more exciting in my medication.

by redheadonist | 14th Apr 22, 9:48am 1649886485

The irony of someone who uses the the term "face nappies" calling someone else stupid.

by Brock Landers | 14th Apr 22, 10:45am 1649889927

I was unaware that red hair prevents you from growing a sense of humor.

Do you agree with Carlos that war criminals should be appeased too?

by redheadonist | 14th Apr 22, 3:46pm 1649907967

Nice straw man. When are you leaving?

by blobbles | 14th Apr 22, 7:33pm 1649921610

Agree war criminals should not be appeased. But where should we start? Rumsfeld/Kissenger/Bush/Powell/Biden/Mohammed bin Salman/Putin... all plan then ask their armed forces to murder civilians while in power. Oh right, it's only the last one you care about. Maybe you should ask yourself why?

by Fluffybunny | 14th Apr 22, 10:24am 1649888696

It's an interesting thought. MSM in nz does possess something of a hive-mind. Property prices only go up. Russia bad. Etc.

Does it matter if its not state enforced, if the outcome is the same?

But seriously. Imagine a Mexican govt falling to a pro Russian "popular uprising".

noting that Ukraine sits on fairly large natural gas and oil reserves.

The US would invade in 2 seconds flat. For the people of Mexico, and democracy of course.

by agnostium | 14th Apr 22, 1:17pm 1649899072

Cool, who would you have as world police if US didn't have that role? China? Russia? Or do you believe in a nice utopian world were we don't need police?

by RickStrauss | 14th Apr 22, 9:54am 1649886870

No need. He's made his apologists look a bit silly.

by Bluff | 14th Apr 22, 12:52am 1649854323

This is a good move, didn't think they had the balls but baked in run away inflation is here to stay & on a global scale. RB messed up with its bollocks path of least regrets during the vid & dropping rates 0.5% in Aug 19. 30% propety inflation in a pandemic, we the sheeple are to blame for that too. Greedy little monkeys we were. Unfortunately we've stuffed NZ with this crazy mentality of get rich while taking a dump in the morning & drinking flat whites. Feel for those spruiked into the ponzi to prop up the off shore investors & boomers, gen xers with a ton of cash or equity to speculate with.

by Engineer 11 | 14th Apr 22, 6:12am 1649873522

I think the rate hikes are too agresive and will not tame the current inflation. The only outcome will be more costs for people's household budgets which will mean their whole income will be spent on essentials, mortgage / rent, power, rates, fuel & food. This will hurt families and the economy.

by ex agent | 14th Apr 22, 8:26am 1649881593

I spoke to my neighbour yesterday who runs an electrical contracting business. He has a number of employees. I asked him how it was going. He is suddenly in survival mode after a very busy few years. Several new builds are not going ahead. This is going to get rough. If you need to sell , sell now. Those low rates were emergency rates. But you couldn’t tell many people. The spruikers on this site have a lot to answer for.

by Sam B | 14th Apr 22, 9:08am 1649884081

The spruikers on this site have very little influence, I think.

But I do hold Orr responsible. In fairness, he did warn that rates can go up and people should be cautious. But it should have been obvious that no-one was listening. It was obvious they weren't. He should have been shouting it from rooftops, challenging Ashley Church to pistols at noon, et cetera.

by Fluffybunny | 14th Apr 22, 9:09am 1649884172

IDK. He did very clearly come out and say don't over extend.

There are plenty of people we can blame, the whole industry is an out of control living entity.

Doesn't take away the fact that people need to make their own choices.

We can't complain about house prices being to high, socially unjust etc, then also complain when the mechanics used to fuel the market are reversed...

by RickStrauss | 14th Apr 22, 9:55am 1649886923

It might have helped if he did not drop the LVR restrictions (while pumping QE in and dropping rates).

by Sam B | 14th Apr 22, 11:42am 1649893329

Agreed. I made a submission to the RBNZ at the time, in that very small window in 2020 when they asked for feedback on dropping LVRs. I told them it didn't make any sense and would encourage a new wave of speculation. A year later I got an email asking if I wanted my name scrubbed from the submission for the purpose of privacy. LOL, no, I want my name all over it! Things played out exactly as I had predicted.

by blobbles | 14th Apr 22, 7:38pm 1649921928

Indeed, the insanity of over reacting was obvious to all. I encouraged everyone on this site to make a submission at the time as I have many times over the past few years on many of their idiotic policies. They have been told by so many people for so long they are doing the wrong thing, it's a wonder they still have jobs. Oh thats right, they aren't actually accountable for their actions.

Again, wait for Orrs resignation. That's when you know the s%#ts really hitting the fan, the others at the top (including Bascand who seemed to be the one making the case for dropping LVRs) have gone already, they couldn't live with their own cognitive dissonance of believing they had done a good job while all indicators and submitters indicated they had done massive damage.

by Carlos67 | 15th Apr 22, 11:02am 1649977333

Probably will not see a resignation from Orr at this late stage of the game unless there is rioting in the streets. Correct me if I'm wrong but doesn't he have less than 12 months to go anyway ? he will just ride out the storm and depart with a bonus cheque.

by i am not a nimby | 15th Apr 22, 5:56am 1649959004

History if not compulsory in schools in USA, promoters of History to continue as a subject in later uni studies has a very good reason behind it. Remember US Fed funds rate shot up from about 3% to about 14% during the great oil price shock of the 70's, then dropped to about 8% after about a year or so and then to about 4% (as it was a fairly new concept to digest just high levels of interest rates) and shot up again to a whooping 20% (yes, 20 not a misprint), and stayed as elevated as 7% up until about 1985. So stop it- stop arguing, stop blaming and just brace up.