New Zealand plunges into recessionary spiral

Post by happymellon » Fri, Nov 04, 2022, 9:00 PM UTC

hn_throwaway_99 wrote: post #84

happymellon wrote: post #70

Earlier quoted context omitted.

Assuming you are American, do you also get confused with Bank of America, or US Bank? Most countries have a retail bank that uses the name of the country or region, even if they aren't the central bank.

Many central banks are named "Bank of ", like Bank of England (for historical reasons not Bank of UK), Bank of Germany, Bank of France (Banque de France) or Bank of Spain (Banco de España). If we had a private "Bank of The United States", then yes, that would be confusing, but no official institutions are named "BlahBlah of America". Also, the fact that the official central bank is so close at "The Reserve Bank of Ne…

Post by alistairSH » Fri, Nov 04, 2022, 9:04 PM UTC

robocat wrote: post #43

hedora wrote: post #18

Figure 9 looks dire: 95% of mortgage (by total value, not count) are going to have their rates adjusted in the next three years; 56% in the next year. In the US, that'd definitely lead to a housing crisis worse than 2008. Is there something different about how houses are purchased in NZ?

In New Zealand, all mortgages are approximately at a floating interest rate. You can lock in a rate for up to 5 years (with the majority choosing 1 or 2 years), but after that “fixed” period completes, you now renew your interest rate at whatever the current market is. Most mortgages are signed up for a term of decades (mine is 30 years, and I signed up at age 50), so although you might use “fixed” rates for a few ye…

Post by Tiktaalik » Fri, Nov 04, 2022, 9:16 PM UTC

cgh wrote: post #69

lostlogin wrote: post #4

Earlier quoted context omitted.

Is the energy sector mining, drilling, oil and gas? If that's the way out of financial strife, that's depressing.

I understand the hesitance to rely on oil and gas, but what’s wrong with mining?

Post by lostlogin » Fri, Nov 04, 2022, 9:23 PM UTC

Grimburger wrote: post #94

tmnvix wrote: post #73

Earlier quoted context omitted.

Overall, yes, very. For some not so much. Talking with my landlord the other week, they said that they regretted not selling the house last year when they moved. It's lost 15k every week this year on average (according to homes.co.nz estimates). That's almost 30%. For people like me, it's a good thing. Interest rates are higher, sure, but a smaller deposit is needed and for most people I know that have been looking t…

Investments aren't meant to be risk free.

Post by rr888 » Fri, Nov 04, 2022, 9:25 PM UTC

mdasen wrote: post #65

robocat wrote: post #43

Earlier quoted context omitted.

In New Zealand, all mortgages are approximately at a floating interest rate. You can lock in a rate for up to 5 years (with the majority choosing 1 or 2 years), but after that “fixed” period completes, you now renew your interest rate at whatever the current market is. Most mortgages are signed up for a term of decades (mine is 30 years, and I signed up at age 50), so although you might use “fixed” rates for a few ye…

Silly question, but how do you budget given floating interest rates? Let's say that you buy an $800,000 place at 3% interest with a 20% down-payment ($640,000 borrowed). Your payments are $2,698/mo. Fast-forward a couple years and you're now at 7.3% and your payments are up to $4,388/mo. That's a 63% increase in your housing budget. That's an extra $20,280/year in housing costs. Yes, rent can increase crazy amounts w…