Watch Out NZ, Here Comes 4%…

New Zealand economists are firming on the Reserve Bank lifting the cash rate to 4% – considerably higher than recently expected, and the latest data on wages and employment, they say provide more of a platform to achieve this target. So more pain for many, including recent mortgage holders.

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  1. New Zealand better country than Australia for non lazy people , BMW m3 comp in new Zealand $85000 " new Apartment $300000 more affordable for middle class … Only lower class worse off in new Zealand paying more for food but look at electronics cheaper in NZ than Australia Lg c2 55 in new Zealand $2300 Australia $2600

  2. Bring on 18% to show how freaking greedy Australians have become. I've been through 3 recessions which shows how stupid governments really are and cannot manage an economy. And still no one is hold the WEF, WHO and China accountable for loses. I bet everyone of those leeches made billions.

  3. It is important to remember the residential housing market was well over cooked prior to the start of the plandemic Feb 2020. Since then most residential property roughly raised in value between 20 to 30% so with this drop we are still back at our overcooked market. It is very sad to hear young qualified people saying that they reckon they will never be able to buy a house. We need a big correction to prevent the huge gap between rich (homeowners) and poor (renters) as we are already seeing the socio economic fallout.

  4. Konichiwa! I hope it hits 400% got to burn through the working class's savings before switching to a deflationary asset spiral. An inversion of the Great Depression.

  5. Inflation does not get tamed until the cash rate is higher than the inflation rate
    Anyone that says anything else either has no clue or have certain interest in the outcome

  6. Yes, I agree that the RBNZ looks likely to boost interest rates to 4% or above. And that this will be hard on those who have purchased overpriced properties when interest rates were low, only to see the RBNZ to suddenly reverse policy without any coherent explanation. I suggest that the fundermental idea that an economy could be managed through the ocr has-been disproven. Robert Muldooyn, a. Former finance minister and PM referred to it as "fine tuning". It did not work for him either. One might consider how different the economy might be if the head interest rate had just been left at the historical 6%. Could it be worse?

  7. New Zealand has a floating exchange rate and an open capital account. The RBNZ can choose to target either the exchange rate or its cash rate. This is hardly rocket science. Even a Luddite macroeconomist should be able of absorbing this fact and understanding what 'degree of freedom' means.

    NZ is screwed.

    The same logic applies to Australia, but we have a WA to fortify our current account. If that collapses, nothing is going to save us. Absolutely nothing. The government knows this. Chalmers know this. The RBA has known this for a long time. Lowe will never tell you this.

    We voted in May for this, whether we want to admit it or not. Crippling Climate Change action, performative Referendums. That is what we voted for and that is all we are going to get.

  8. It's not the OCR so much as what mortgage rates are. Decades ago, one of my early jobs was putting through mortgage applications – I'm sure mortgage interest was 1% above the OCR rate. Now it's more like 3%. The banks do less, use more technolgy, charge higher rates and make bigger profits. IMHO those profits are part of what is killing it for first home buyers.

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