Tinkering
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| 1 | If a bare section of 400 square metres in Flat Bush sells for $800,000, no amount of tinkering with free school lunches and free period products will make any significant difference to the stress which very large numbers of New Zealand households are under – both those who are paying rent and those who are trying to service enormously large mortgages and who are terrified that interest rates might return to more normal levels. pcle - 2021-02-21 09:22:00 |
| 2 | Interest rates will never turn to 'normal' under the current system. Watch food prices double in the next year or two, and remember it's all a part of 'Build Back Better'. apollo11 - 2021-02-21 12:35:00 |
| 3 | keep in mind no govt will ever fix it as that will stop a large number of its voters from making money. tweake - 2021-02-21 12:47:00 |
| 4 | apollo11 wrote:
They may not go back to normal but even if they go to 4% this will cripple a lot of people. long term rates are creeping up in the US as inflation is going up, but politicians will keeping denying that inflation is being effected by all the money printing. loud_37 - 2021-02-21 13:07:00 |
| 5 | To think that 32-33 years ago I bought a section 1200 square meters for $15,000 put small Keith Hay home on it for $42,000 ($67,000 total) and interest rate was 21.5% (briefly). Sold it a year later for $95,000 Recently it got developed with the Keith Hay moved to the back and 3 more new home built up front and all share a common driveway the Keith Hay valuation is $530,000 and the other 3 $585,000,$585,000 and $618,000 each that's less than a 300 square meter section each and this is Waiuku. gamefisher - 2021-02-21 22:34:00 |
| 6 | This message was deleted. apollo11 - 2021-02-21 23:51:00 |
| 7 | This message was deleted. neell - 2021-02-22 09:15:00 |
| 8 | This message was deleted. apollo11 - 2021-02-22 09:29:00 |
| 9 | This message was deleted. shanreagh - 2021-02-22 10:44:00 |
| 10 | This message was deleted. sparkychap - 2021-02-22 10:53:00 |
| 11 | This message was deleted. shanreagh - 2021-02-22 10:55:00 |
| 12 | This message was deleted. apollo11 - 2021-02-22 11:37:00 |
| 13 | This message was deleted. apollo11 - 2021-02-22 11:38:00 |
| 14 | This message was deleted. sparkychap - 2021-02-22 11:39:00 |
| 15 | This message was deleted. apollo11 - 2021-02-22 11:50:00 |
| 16 | This message was deleted. shanreagh - 2021-02-22 12:27:00 |
| 17 | This message was deleted. apollo11 - 2021-02-22 12:33:00 |
| 18 | This message was deleted. committed - 2021-02-22 13:06:00 |
| 19 | Was it something we said? committed - 2021-02-22 17:39:00 |
| 20 | committed wrote: In theory, it's a conspiracy. sparkychap - 2021-02-22 18:02:00 |
| 21 | sparkychap wrote: apollo11 - 2021-02-22 18:11:00 |
| 22 | Don't discuss the **Noom Gandinl**. apollo11 - 2021-02-22 18:12:00 |
| 23 | committed wrote: The reset at work? pcle - 2021-02-23 07:59:00 |
| 24 | The member deleted this message. andrew697 - 2021-02-23 08:26:00 |
| 25 | andrew697 wrote: #cancelculture sparkychap - 2021-02-23 08:37:00 |
| 26 | andrew697 wrote:
Big brother and we can't ask! jeffqv - 2021-02-23 10:01:00 |
| 27 | sparkychap wrote: apollo11 - 2021-02-23 10:05:00 |
| 28 | The thread got diverted off into a favourite conspiracy theory of one of the posters. Some of us commented. Best advice don't bring your flipping CTs on here please. Surely there must be a place where you can gather with your like minded conspiracy mates to discuss these. shanreagh - 2021-02-23 12:06:00 |
| 29 | apollo11 wrote:
Has this got something to do with the extract Pcle posted from Bassett et al? I am sure they would welcome comments on the actual article. shanreagh - 2021-02-23 12:08:00 |
| 30 | This message was deleted. apollo11 - 2021-02-23 13:09:00 |
| 31 | loud_37 wrote:
I agree. The number of million+ mortgages my colleagues have is eye-watering. They're just young families in their 30's/40's. I get the capital investment, but the weekly difference between a mill+mtge on a 30-year term that goes from 2 to 4% is almost $300. I'd be worried I was living on the edge of financial disaster. And god forbid if (when?) they hike up to around 8% again...I mean, you might be sitting pretty on a 2.3% loan right now but finding another $900/week when that happens could get ugly. Then where do you go? Sell up and move where? Get 4 flatmates in your 4-bedroom family home to help pay? Yuck - no thanks. cameron-albany - 2021-02-23 15:47:00 |
| 32 | cameron-albany wrote:
This is a commonly held view however the facts are rather different. Loans are stressed at around 6% even though the pay rate is under 3%, this is to take account of future rate rises. Thinking of those, the average rate in NZ over the past 25 years is around 7.5% but no-one believes they will return to those or anything like it in the next five years. When I arrived in NZ in 06 my ASB mortgage was 9.25%, tell that to a youngster today and they faint! jeffqv - 2021-02-23 18:05:00 |
| 33 | jeffqv wrote:
Oh well - hopefully the lenders won't live to regret their words. For me, the crystal ball of no rate rises, no financial shocks due to unforeseen circumstances, no global corrections, no further pandemics and no other issues which will challenge this "five year" timeframe will reinforce this apparently very careful job that said lenders are doing to altruistically protect people (over and above their own livelihoods/profit...). I've screen-shot this entire thread and hopefully it won't be attached to an "I told you so" post in five years lol. Edited by cameron-albany at 6:48 pm, Tue 23 Feb cameron-albany - 2021-02-23 18:42:00 |
| 34 | In 5 years time, and provided the home owners don't keep borrowing against their home, several events could have happened and good chance some of them will. First, principal has been paid down. Second, home value has increased. Third, time passes and the household income has increased through improved skills and experience, maybe extra hours. The point is that the mortgage cost decreases as a proportion of household income over 5 years. Almost everyone can look back on their mortgage payments after 5 years and see they are easier to meet. And as equity increases the household has additional options if needed. Other events can happen, of course, but a lot are choices the household makes. artemis - 2021-02-23 19:03:00 |
| 35 | artemis wrote:
If most people paid down the debt that would be great for them, but most people use their house as an ATM and when the value goes up they take the equity out and spend it, this is what is keeping the economy going. loud_37 - 2021-02-23 19:38:00 |
| 36 | loud_37 wrote:
Some do, for sure. Their choice. Their consequences. artemis - 2021-02-23 20:09:00 |
| 37 | artemis wrote:
And during that time, rents increase. Meaning more incentive to keep paying the mortgage, as going back to renting probably wont reduce your monthly accommodation expenses. And if you need to take in flatmates or rent out the whole house to get extra income. Higher rent definitely helps. aredwood - 2021-02-24 00:04:00 |
| 38 | artemis wrote:
In a high inflation environment that makes a real difference the concern is of course in the first 5 years there is very little borrowing repaid it’s all interest isn’t it, second in such a low inflation environment wages are increasing slowly for a lot of people (and way less than house prices for most) thirdly they are probably more likely to have a kid or two and want to drop an income. Hence of course why the gov tries to fool everyone into thinking they are rich with house price inflation, of course it’s all virtual money until you’ve sold (or used your house as an ATM) and we are poorer as a society as a result. deendon1 - 2021-02-24 00:12:00 |
| 39 | We need to change the narrative and start talking down house prices with lots of explanation as to why that would be better for us as a society. Remember we can drop 50% and still only get back to 2016. We are wrong to protect such a small number of people (those who bought in the last year or two with low deposits who havn’t (over)paid down the loan) at the expense of pretty much every other home owner and aspiring homeowner deendon1 - 2021-02-24 00:16:00 |
| 40 | deendon1 wrote:
Interest and principal. Lots of amortisation schedules online, take a look and you might be surprised. Like principal reduced about 10% at year 5. And principal reduces faster each year. Households on low income can look at the First Home scheme - 5% deposit, taxpayer grants, government underwrite for the bank. Dropping an income is a choice. Many parents return to work after childbirth, often soon after when taxpayer parental payments finish. artemis - 2021-02-24 07:11:00 |
| 41 | deendon1 wrote: The "narrative"? What waffle & BS is that? pcle - 2021-02-24 07:52:00 |
| 42 | artemis wrote:
1) it took at least 10 years before we could really see our repayments reducing the total amount 2) all of which act to inflate house prices 3) of course but a lot of people make that choice, a lot of people might want to, a lot of people might think they could, should or would be in a position to make that choice, just because it's not what you or I did doesn't mean it shouldn't be considered deendon1 - 2021-02-24 11:28:00 |
| 43 | pcle wrote:
I don't blame it all on investors, of course the gov has to carry their share of responsibility, I've said many times the gov doesn't actually 'want' to solve the problem nor do many others narrative= you gotta talk their language, say something sensible and they just ignore (eg Swarbrick and boomer she even had the wrong generation didn't she?) deendon1 - 2021-02-24 11:30:00 |
| 44 | deendon1 wrote:
Was the principal reduced 10% at the 5 year mark? That would be usual with a table mortgage. artemis - 2021-02-24 13:26:00 |
| 45 | cameron-albany wrote:
I have a very chunky Auckland-sized mortgage, but that's a choice as we decided to extend ourselves to build a nice big home that would stand us in good stead for raising a family long term. We're currently repaying the mortgage as if interest rates were 7%, which leaves us with precious little cash, but it's amazing how quickly the principal is whittling down, every time I look another $20k or so seems to have disappeared. It also gives us breathing space should interest rates go up again, we could simply lower our principal repayments and keep things as they are. I'm anticipating, though, if interest rates go up, that'll be due to inflationary pressure, which means my salary should go up in unison as well. That's what the "hard-done-by" boomers won't tell you about the 21% mortgages they were paying (for a very limited time) in the '80s. Inflation was running at 17+% at that time and when you came out the other side of that short period of high interest, you found inflation had whittled your large mortgage back to a much more manageable amount. esprit - 2021-02-24 15:52:00 |
| 46 | deendon1 wrote: tweake - 2021-02-24 18:04:00 |
| 47 | esprit wrote: In 1988 a $100 is now in 2020 worth $209 that's only slightly over double house prices have inflated well beyond that but depends on the locality. gamefisher - 2021-02-24 21:31:00 |
| 48 | That wasn't my point at all but okay. esprit - 2021-02-24 22:11:00 |
