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

 

Parliament Today:

The Kids: OECD Report Shows Huge Impact Of Poverty On Education

A new report from the OECD has again highlighted the negative effects of poverty, showing that disadvantaged children in New Zealand are more than six times more likely to underachieve in maths than children from wealthier homes. More>>

ALSO:

Pacific: NZ Pledges $500,000 To Help Address Zika

“With the Zika virus now confirmed in a number of Pacific countries, New Zealand is committed to helping limit the impact and spread of the virus in the region,” says Mr McCully. “New Zealand will provide $250,000 as a contribution to the WHO to implement the Pacific Zika Action Plan, and a further $250,000 to enable countries in the region to respond rapidly if required." More>>

ALSO:

Labour: Police Commissioner 'Doesn’t Get Force Needs'

The Police Commissioner has let down the public and his own force by insisting the police have what they need despite it taking a year to solve a burglary and overwhelming number of officers saying they are under-resourced, says Labour’s Police spokesman Stuart Nash. More>>

ALSO:

Gordon Campbell: On The US Pressure To Expand Our Role In Iraq

Foreign news services are being more forthcoming about what the “next 12 months” will entail – essentially, the defence ministers will be under US pressure to increase their “training” role preparatory to an assault on the city of Mosul in northern Iraq. More>>

ALSO:

Parliament Restarts: Prime Minister’s Statement

Our policy agenda and legislative programme will reflect the Government’s four priorities: • to responsibly manage the Government’s finances • to build a more competitive and productive economy • to deliver better public services to New Zealanders, an • to support the rebuilding of Christchurch. More>>

ALSO:

NZEI Survey Report: Special Needs Students Missing Out

The survey revealed that around 16 percent of students were on schools’ special needs registers, but nearly 90 percent of schools’ special needs coordinators did not believe there was adequate support for students and their learning... More>>

ALSO:

Interim Report: Waitangi Tribunal On Ture Whenua Legislation

Labour on Proposed changes to Maori land rules: “To have Treaty Negotiations Minister Chris Finlayson dismiss findings as ‘bizarre’ is totally disingenuous and disrespectful. What’s bizarre is Maori Development Minister Te Ururoa Flavell stubbornly pushing through this Bill before the Waitangi Tribunal has even completed its report..." More>>

ALSO:

Spy Update: Appointment Of GCSB Acting Director

GCSB Chief Legal Advisor Lisa Fong will become the Acting Director of the Government Communications Security Bureau (GCSB) from 15 February 2016, Minister Responsible for the GCSB Christopher Finlayson announced today. More>>

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news