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:

Royals: The Prince Of Wales And Duchess Of Cornwall To Visit

Prime Minister John Key welcomes today’s announcement that the Prince of Wales and The Duchess of Cornwall will visit New Zealand in November. This will be the second joint visit for Their Royal Highnesses to New Zealand. More>>

ALSO:

Tracey Martin Replaced: Ron Mark Is New New Zealand First Deputy Leader

Clayton Mitchell was the successful candidate for the Associate Whip position. Winston Peters was re-elected as Leader by the Caucus. Ron Mark was elected as the Deputy Leader with effect from 10am, Friday, 3rd July. More>>

ALSO:

Rebuild Rebrand: "Regenerate Christchurch" To Replace CERA

The regeneration of Christchurch will be the city’s focus for the next five years as local leadership progressively takes control of the rebuild, Canterbury Earthquake Recovery Minister Gerry Brownlee says. More>>

ALSO:

Nauru: Scholars Urge Minister To Act On Deteriorating Democracy

“Since the 2013 election in Nauru, there has been a series of disturbing developments on the islands that indicate a severe deterioration in the state of its parliamentary democracy and in the rule of law,” say the scholars. More>>

ALSO:

Foreign Affairs: NZ Begins Presidency Of UN Security Council

Prime Minister John Key has welcomed the start of New Zealand’s month-long Presidency of the United Nations Security Council in New York. More>>

ALSO:

Labour: Cash For Charter Schools, Mould For State Schools

“Recently released financial statements show the Whangarei charter school He Puna Marama received $3.9 million in government funding to the end of last year. Yet their audited accounts show they only spent $1.4 million on education, leaving almost $2.5 million over two years unaccounted for." More>>

ALSO:

Kiwirail Plans Shift From Electric: National Urged Not To Take Backwards Step

The National Government shouldn’t drag New Zealand backwards by replacing its climate friendly electric trains with carbon-polluting diesel trains, the Green Party said today. More>>

ALSO:

Capital Connection:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news