Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


RBNZ rate hike equals more pain for home owners

RBNZ rate hike equals more pain for home owners


12 June, 2014


Today’s Reserve Bank interest rate hike means home owners with a floating rate mortgage of $250,000 will pay more than $1200 a year extra in interest than they did in March, Green Party Co-leader Russel Norman said.

“Inflation is currently well below the 2.0 percent target and this third interest rate hike since March whacks home owners, to say nothing of exporters, who will have to grapple with an ever-rising New Zealand dollar.

“Home owners and those aspiring to home ownership got no assistance in last month’s Budget and today have been slammed again, plus the bank promises more hikes this year and next despite Governor Graeme Wheeler saying inflation and wage inflation is moderate,” Dr Norman said .
The RBNZ lifted the Official Cash Rate by quarter of percentage point to 3.25 percent. Annual inflation is 1.5 percent and actually was lower in the year to March than it was the previous quarter.

“People on floating rate mortgages will be hit immediately and even those on fixed rates will eventually be punished,” Dr Norman said.

“Governor Wheeler has signalled more rate rises ahead. Most families are already stretched. On a mortgage of $250,000, you will likely, by the end of this year, have $1500 less a year disposable income. Many home owners, especially in Auckland, have considerably larger mortgages than that.”

The RBNZ is virtually the only central bank around the world hiking interest rates. Some, such as the European Central Bank, are actually cutting rates.
“In the March Monetary Policy Statement, Mr Wheeler said the exchange rate was unsustainably high and he repeated that today. But today’s hike, and with more hikes promised, exporters can expect more pain,” Dr Norman said.

“The Government’s failure to manage the housing sector, where the median house price has risen 33 percent and 44 percent in Auckland on John Key’s watch, is a key driver of today’s RBNZ action.

“Instead of a hands-off approach, the Green Party would more actively manage the housing sector to reduce the attractiveness and profitability of housing speculation.

“The Green Party will take the heat of the housing market by building more state houses and funding third party organisations to provide more affordable houses. We also will curb property speculation through a capital gains tax (except on the family home) and restrict non-resident purchases of property,” Dr Norman said.

Ends

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

False Electoral Return: John Banks Sentenced To Community Detention, Community Work

“The conviction of John Banks today is another sad chapter for John Banks and the ACT Party”, says Labour candidate for Epsom Michael Wood.

“Mr Banks was found guilty of electoral fraud in June. Regardless of what sentence is handed down, his reputation is in tatters. Sentencing is a matter for the court, and publicly deriding him further brings little benefit.”

“With the conviction confirmed, it is time for the ACT Party to step up to the mark and apologise to the people of Epsom. Mr Banks has suffered the consequences of his actions, but so far the ACT Party has gotten off scott-free” More>>

 

Parliament Today:

Gordon Campbell: On The Rise Of ISIS And Labour

While global attention got distracted by the fate of MH17 and the atrocities in Gaza, the world’s other mega ‘bad news’ story – the rise of ISIS-led fundamentalism in Iraq – has reached a tipping point. More>>

ALSO:

Rebuild: Christchurch City Council Releases Milestone Report

The Cameron Partners report says the Council may need to find an additional $783 million to $883 million by 2019... Options Cameron Partners proposed include increasing rates, borrowing more, maximising insurance payments, and freeing up capital from its commercial assets. More>>

ALSO:

Parliament Today: Parliament Adjourns

The 50th Parliament has adjourned for the final time. After the completion of the adjournment debate, MPs left for the campaign trail with Parliament to be dissolved on August 14 ahead of the September 20 election. More>>

ALSO:

Novopayout: Government-Owned Company To Take Over School Payroll

After lengthy negotiations, the Ministry of Education and the existing school payroll provider, Talent2, have settled both on the amounts payable by Talent2 towards the costs of remediating the Novopay service and a new operating model for the school payroll system. More>>

ALSO:

Employment: Labour Will Raise Minimum Wage, Restore Work Rights

A Labour government will raise the minimum wage $2 an hour to $16.25 and restore work rights to ensure the benefits of economic growth are shared fairly by all New Zealanders, Labour Leader David Cunliffe says. More>>

ALSO:

Police: Crewe File Review Released

No new evidence has come to light implicating any specific person as being responsible for the murders of Jeannette and Harvey Crewe... The review identifies there is a distinct possibility that Exhibit 350 (the brass .22 cartridge case) may be fabricated evidence, and that if this is the case, that a member of Police would have been responsible. More>>

ALSO:

Werewolf Issue #49: Gordon Campbell Interviews Laila Harre

For 25 years, Labour and National have been in virtual agreement about the basics of economic policy, and differed mainly on how to go about managing its social consequences. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news