The Dim-Post

August 11, 2016

Low for some

Filed under: Uncategorized — danylmc @ 9:07 am

Via the Herald:

The Reserve Bank has just the Official Cash Rate by 0.25 pc to a new record low of 2 per cent.

Cheap money! If you can get it. What we now have is a segregated credit regime in which many – ie younger, poorer people – can’t borrow because the loan-to-value ratios prevent them from doing so, but those who can access it – ie those with equity – have never been able to borrow at better rates. And now it gets better! If the banks even pass the cuts on.


  1. It’s like intervening in a beating, where some weedy little kid is getting pummeled and then, just as he thinks you’ve come to help, straight nut punching him.

    Comment by Eltalstro — August 11, 2016 @ 9:30 am

  2. @Danyl

    In all honesty, are you confident that you understand the implications of this announcement well enough to determine that it is a bad thing?


    Comment by Antoine — August 11, 2016 @ 10:54 am

  3. Also. The purpose of lowering the rate (according to your link) was to influence the NZ dollar downwards. You are aware that it is Green Party policy to “[put] an increased focus on the exchange rate and balance of payments, including using a range of tools to dampen volatility in the New Zealand dollar exchange rate or to influence it if it remains significantly over-valued or under-valued”?


    Comment by Antoine — August 11, 2016 @ 10:58 am

  4. And that the Green Party supported the Reserve Bank’s more stringent LVR (loan-to-value ratio) restrictions, as recently as July?

    Comment by Antoine — August 11, 2016 @ 11:01 am

  5. And here’s the Green Party supporting the Reserve Bank’s OCR cuts in March:

    Comment by Antoine — August 11, 2016 @ 11:03 am

  6. Jeepers Antoine, you are really keen to hang on to your capital gains aren’t you? It is alright we have all agreed that the rest of the economy and the younger generations are irrelevant, all that matters is that Antoine’s rental property keeps going up in value. The world can burn as long as you get some sweet returns on your property investment.

    Comment by sam — August 11, 2016 @ 12:22 pm

  7. @sam

    You are being dopey. In no way do I expect that my postings on this blog will influence interest rates or house prices. Rather, I am trying to point out that Danyl is leaping to criticise policy outcomes which his own party supported, and (I suspect) without having a clear understanding of the effects the OCR cut will have.


    Comment by Antoine — August 11, 2016 @ 12:29 pm

  8. PS Knocking 0.25% off the OCR does not count as “the world burning”

    Comment by Antoine — August 11, 2016 @ 12:33 pm

  9. There’s no LVR requirement on new homes and the 40% limit only applies to investors and there are givt schemes to help first home buyers.

    But it is the case that any intervention in the property market will most likely disadvantage some.

    Which is why those selling easy solutions are selling snake oil.

    Comment by NeilM — August 11, 2016 @ 12:55 pm

  10. @Neil, Danyl may be referring to young investors?


    Comment by Antoine — August 11, 2016 @ 12:57 pm

  11. @Antoine I will not dispute the amount of dope in my previous comment (I think it was optimal, others, yourself included, may disagree). I was referring to a trend where posts on topics related (even tangentially) to house prices, attract a lot of interest from your quarter. I do not doubt that you approach these topics with the public interest in mind…. Well, actually yes I do. I feel self-interest may prevent you from seeing the bigger picture on house prices (as it does for us all on occasion).

    Comment by sam — August 11, 2016 @ 1:06 pm

  12. @sam well excuse me for commenting on a blog about things I am interested in!


    Comment by Antoine — August 11, 2016 @ 1:12 pm

  13. Swings and roundabouts.

    Bad for retirees living off savings, good for young people wanting to borrow.

    Comment by NeilM — August 11, 2016 @ 1:24 pm

  14. @Antoine no worries, you are excused.

    Comment by sam — August 11, 2016 @ 1:25 pm

  15. /flounce

    Comment by Gregor W — August 11, 2016 @ 1:33 pm

  16. Fight! … Fight! … Fight! ….

    Comment by leeharmanclark — August 11, 2016 @ 7:36 pm

  17. I have not yet begun to flounce

    Comment by Antoine — August 11, 2016 @ 10:47 pm

  18. On reflection, my posts were inappropriate, I apologise to everyone. I was being frivolous about a serious topic; a matter of supreme policy and political importance. I am of course talking about Antoine’s capital gains; these are sacred gains that must be protected at all costs. No principle is higher than Antoine’s natural right, and the right of other boomers, to a steady flow of value into his properties. Was not the eleventh commandment that capital gains must flow to the righteous? A tax on capital gains is a tax on righteousness. All other principles must be cast aside and we must focus with the utmost vigour on maintaining a noble society where the anointed landed gentry realise their ordained destiny to an ever increasing flow of wealth and prestige.

    Nah I am just messing with you, I have nothing against your capital gains Antoine, I hope they bring you joy (unlike my savings which do not bring me much at all anymore and are taxed, which is weird). The housing market has just reached a stage now, where the only sane response is misguided attempts at humour; dope as you call it.

    Comment by sam — August 11, 2016 @ 10:48 pm

  19. Sssh! You are distracting me from rolling in my capital gains

    Comment by Antoine — August 12, 2016 @ 12:36 am

  20. i reckon we need something a little more punitive than a self slap for “disrespecting New Zealand”

    Comment by rodaigh — August 12, 2016 @ 9:39 am

  21. my apologies – wrong thread..

    Comment by rodaigh — August 12, 2016 @ 9:44 am

  22. @Antoine Alright, I will leave you to your capital gains rolling. Just bear in mind though, if the younger generations last long enough, time travel might be invented. Then they can head back in time and beat the boomers to the punch and snap up all the houses. Who will be laughing then, eh.

    Comment by sam — August 12, 2016 @ 12:26 pm

  23. It’s ok rodaigh, your comment made as much sense as all the others on this post so far.

    Comment by Lee Clark — August 12, 2016 @ 6:58 pm

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