Banks act on housing affordability crisis (while National sits on its hands)

Written By: - Date published: 6:29 am, June 10th, 2016 - 144 comments
Categories: housing, national, useless - Tags: , , ,

Despite Key’s barnstorming 2007 speech on the housing affordability crisis, National these days prefer to deny that it exists. Apparently fed up with waiting for the government to take action, banks are moving to reduce their risk and limit foreign buyers.

The Reserve Bank yesterday:

RBNZ considers property investor crackdown

Life is about to get tougher for property investors as the Reserve Bank considers clamping down further on their access to credit to buy houses.

Auckland’s housing market has refused to buckle under Reserve Bank pressure aimed at reining in house price growth, which is starting to accelerate again. And it’s not the only region where house prices are gathering pace.

Reserve Bank governor Graeme Wheeler openly concedes that puts the health of the financial system at risk.

Read that last sentence again.

“In Auckland, investors account for 46 percent of the transactions, for the rest of the country it’s around 40 [percent] or a bit more, so it’s very significant,” Mr Wheeler said.

And that one! Almost half of Auckland’s houses going to investors (more here). There’s your housing affordability crisis, your rental crisis, and your much of your homelessness crisis in one go.

Other announcements yesterday:

Westpac, ANZ Bank shut out foreign buyers

Westpac and ANZ will no longer lend to overseas-based buyers of New Zealand property – with other banks expected to follow the move to shut the door on foreign investors. The restrictions follow moves by Australian banks to stop lending to foreign buyers of property.
…
The restrictions will not affect New Zealand passport holders living abroad and purchasing property funded by overseas income. A Westpac spokeswoman said the restrictions “reduces risk”.
…
An ANZ spokesman said the changes were made to ensure the bank was “appropriately positioned in the current housing environment, taking into account supply pressure in certain areas”.
…
Labour’s Finance spokesperson Grant Robertson said the restrictions showed the banks acknowledged both that the housing market was “out of control”, and that overseas-buyers were playing a big role in that. “It’s the goal of a bank to make money from mortgage lending. If they are pulling back from lending on New Zealand housing, then there really is a crisis in the market.” …

This is what the banks are afraid of:

Nation of debt – ready, set, crash

New Zealand has half a trillion dollars in debt. If anything can bring it all down it is housing. Liam Dann talks bubbles and booms with those who know what a crash looks like.

“We’ve almost got the perfect storm,” says veteran fund manager Brian Gaynor as he reels off the many reasons New Zealand house prices and debt levels are soaring to precipitous heights.

There are many ingredients. But right now, New Zealand seems to have them all: not enough building, restrictions on development, surging migration, baby boomer savings, low interest rates and banks that are all too happy to lend for property investment.

“When you get the perfect storm like we did in the 1980s with the sharemarket, you see things just go up and up. People start to believe they will never fall,” he says.
…
The big problem, says economist Shamubeel Eaqub, is that we have a banking system designed to view lending for property as less risky than other kinds of lending.

“Our banking regulation allows us to feed on the property market,” he says.

“Of all the debt that is created in New Zealand, more and more is going towards mortgages because mortgages are less risky according to our rules and regulations.”

As house prices soar, the size of mortgages has to grow with it. There is no easy way out of the cycle. If house prices fall, then highly leveraged investors and many home buyers will be left exposed. “When it happens it will be nasty,” says Eaqub.

“There is no other way to describe it. What we have built up is ugly.” …

And what has the government been up to this year? Losing a flag referendum wasn’t it?

144 comments on “Banks act on housing affordability crisis (while National sits on its hands) ”

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  1. Paul 1
    10 June 2016 at 6:45 am

    Banks are losing money by doing this. They know something.
    Bubble about to burst.

    • tc 1.1
      10 June 2016 at 7:10 am

      Banks ride the cycles and never lose, they’ve seen this all before and do very well out of whichever way it goes.

      Something’s afoot methinks as they’ve been doing very nicely out of NACT policy so watch this space.

      A plan/ media strategy may have been hatched and this is phase 1.

      • Paul 1.1.1
        10 June 2016 at 7:33 am

        Banks do make mistakes.
        They should have lost in 2008.
        But they were bailed out USD 700billion.

      • Salsy 1.1.2
        10 June 2016 at 8:25 am

        @TC Exactly. However, the same two banks stopped lending in Australia due to fraudulent Chinese income documents, allegedly manufactured with the help of mortgage brokers. Has that been happening here also?

        http://www.stuff.co.nz/business/world/79780169/Westpac-ANZ-in-Australia-investigating-suspected-foreign-home-loan-fraud

        • TC 1.1.2.1
          10 June 2016 at 11:21 am

          Oz have rules on mortagee sales to prevent fire sales so I see this is mitigating risk more so than anything else.

          • Rosie 1.1.2.1.1
            10 June 2016 at 2:32 pm

            “Oz have rules on mortagee sales to prevent fire sales……………”

            Hmmm. I’m thinking about our application for our first mortgage in 2012. The bank, (kiwibank) were keen to loan to us despite the fact that we only had a 7.8% deposit. All was hunky dory in their eyes.

            When discussing the loan with the mortgage manager he almost skipped over the question “How will you pay your LMI?”

            “Our what?”

            “Lender’s mortgage insurance”

            This is something a bank charges clients with a low deposit. It’s either paid up front or built into a higher interest rate payment. It covers the BANK in case the client goes belly up and the bank takes your houses and sells it as a mortgagee sale. IF the house sells for less than you paid for it, the insurance co pays the bank out for the difference so they don’t lose any money on THEIR asset.

            Guess what they were going to charge us? $14K. I kid you not. I told them the LMI was a scam and I refused to pay it. They wanted the 30 year mortgage out of us so we negotiated down to $4K. We don’t have that kind of money lying around so you guessed it, it went on the mortgage. ANOTHER little earner, interest paid on insurance that covers THEM.

            So what do the aussies do that’s different?

            • TC 1.1.2.1.1.1
              10 June 2016 at 4:18 pm

              They cant flog houses below a fair market value to get their money back regardless of how much they are owed.

              • Colonial Viper …
                10 June 2016 at 6:12 pm

                And what if that “fair market value” starts declining…and that stage the pent up demand to sell will crash the market even faster

            • North 1.1.2.1.1.2
              10 June 2016 at 8:54 pm

              Rosie that’s the loveliest telling of how ‘it’ is. You know I have a 40 year connection to the criminal law and what you say has modified my defintion of ‘criminal’. John Key should be going down in San Quentin for 40 to life. Bastard. “Have a beer with me…….” Bastard !

    • Infused 1.2
      10 June 2016 at 10:09 am

      No. You just don’t understand anything.

    • Takere 1.3
      10 June 2016 at 1:16 pm

      The bubble has burst ….. they’re just fess’n up because the Nat’s have refused to give them an out by doing what they should have done 18 months ago. CGT, Stamp Duty & Enforcement of IRD on the 2 year buying and selling rules.
      Have the banks changed sides? Wankpac & ANZ own most of NZ’s housing debt so why would they out themselves?
      Next thing, capital flight to materialise what has been identified in the NZ Herald article,”the Perfect Storm”. Noriel Roubeni will be saying to himself, “I told you so 18 months ago” in another Herald article.

  2. Irascible 2
    10 June 2016 at 6:59 am

    Listening to Nick Smith on RNZ this morning and heard a “Cabinet Minister” denying that there was a housing crisis and then abnegating all government responsibility to step into the crisis and work to resolve it.
    Bizarre!!! Irrational and irresponsible.

    • Paul 2.1
      10 June 2016 at 7:20 am

      No crisis, Mr Smith?
      Another symptom.
      Rents rising rapidly.

      ‘The average rent in the region has gone up 21 per cent in the past five years, from $440 in 2012 to $520 in 2016.’
      Affordability was also a major factor, with more people moving further from the city in search of cheaper rents.

      “Obviously wages haven’t gone up to be able to compete with rent rises, [and] as a result of that you’re seeing people find ways to get more affordable housing, so they either move further out or move to a smaller unit,” Jeffries said.’

      http://i.stuff.co.nz/life-style/home-property/80706225/Auckland-sees-massive-rent-increases-but-not-in-the-places-you-d-expect

      Crisis.What crisis?
      https://m.youtube.com/playlist?list=PLED10BC1803145945

      • Kiwiri 2.1.1
        10 June 2016 at 10:09 am

        Good young Dr Nick Smith (his specialty is landslides and he is experiencing more). Even if he were to trip over a crisis, walk into one, bang his head into several, or swallow a few, he would he say there’s no crisis.

    • fisiani 2.2
      10 June 2016 at 11:28 am

      Nonsense. There is a hell of a lot being done. Read the truth, not just the pathetic spin by Little.
      http://m.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11653723

      • WILD KATIPO 2.2.1
        10 June 2016 at 1:56 pm

        Know your history – conditions have gotten WORSE not better.

        This was a forerunner of things to come under this govt.

        http://www.stuff.co.nz/national/politics/10468960/Aroha-of-McGehan-Close-flees-NZ

      • Kiwiri 2.2.2
        10 June 2016 at 2:46 pm

        There is hell of a not being done. John Key must read out that barnstorming 2007 speech during GE2017 and barns will certainly be storming.

      • North 2.2.3
        10 June 2016 at 9:01 pm

        Where’s your daily “40 houses”, fuckwit ? Not the fact of them, the facility of them in alleviating homelessness. You know, when the pitchforks come out Fused Anus……..many of my mates are gonna love being on the wooden end of the pitchfork, at your door…….which sounds cruel…….but not as cruel as you laughing and mocking at a talented 11 year old girl living in a van with two parents and four siblings. Shut your dirty mouth you low bastard. You can find me if you want to find me Fused Anus. What say we meet and have a ‘talk’, Fused Anus.

        • fisiani 2.2.3.1
          10 June 2016 at 9:27 pm

          Threatened violence, scatological insults, obscenities, making things up and attempted blacklisting.Are you going for the full house of transgressions? But of course being a Lefty you have no chance of being moderated.
          Another 40 houses built in Auckland today. That’s another 40 families housed. 200 Auckland families this week.

          • Pat 2.2.3.1.1
            10 June 2016 at 9:40 pm

            40 houses built today……priced from 800,000 up wards ….how many of those properties are available to those in need of housing ?…..and even if that number is correct it is still 20 houses a day short to meet demand from the increasing population, not to mention the backlog…..think about it.

            • fisiani 2.2.3.1.1.1
              10 June 2016 at 10:10 pm

              In 2008 10 houses were built a day and now it is 40 a day in Auckland. Do you not understand the concept of housing stock? Obviously not. HS+40 = 40 extra families housed. That’s probably about another 100 Auckland people housed each working day unless you seriously think that Paula Bennet, Nick Smith and Gerry Brownlee all lied in Parliament. 2,000 housed in the last month. Far better than the measly 500 under Labour.

              • Pat …
                10 June 2016 at 10:13 pm

                you truly are dense…..Auckland needs to build approx 20,000 new homes a year to meet growth demand…..that does not include the catch up required for the under build for the past two decades….do the math.

          • North 2.2.3.1.2
            10 June 2016 at 10:22 pm

            Evil !

          • North 2.2.3.1.3
            10 June 2016 at 10:32 pm

            You’re a liar of course. Please……we meet.

      • FAB mouse 2.2.4
        11 June 2016 at 8:47 am

        The spin is not Andrew Little saying there is a crisis. The spin is “a hell of a lot is being done” to make it sound like no crisis here. The link starts with “Today, Andrew Little has made several incorrect claims on this website about housing.” but doesn’t state which statements are wrong or why they are wrong. Again the spin is to list lots and lots of what is being done so it seems like it must be solved already. Is it really solved?

  3. b waghorn 3
    10 June 2016 at 7:39 am

    “As house prices soar, the size of mortgages has to grow with it. ”

    As mortgage sizes grow, house prices soar with them..

    Fify

  4. Keith 4
    10 June 2016 at 8:06 am

    Banks only concern is to their shareholders not if people in this country can buy a home, not the homeless, nothing but profit. So clearly they don’t like what they’re seeing out there, whatever their lookouts are projecting is scaring the bejesus out of them. Yes they have given up on National acting in the best interests of all Kiwis so it’s every man for himself.

    Poll driven National do not want to do something or anything about this housing/debt crisis because they fear they will be blamed for the bubble bursting. Great isn’t it?

  5. fisiani 5
    10 June 2016 at 8:44 am

    There is no housing affordability crisis.
    Here is a link to a real estate firm
    http://www.realestate.co.nz/residential/all/manawatu-wanganui/horowhenua/levin

    look at all the easily affordable houses.
    New Zealand is much more than Auckland.
    The smart Aucklanders are selling up and moving to the regions.

    • Sabine 5.1
      10 June 2016 at 8:58 am

      Is Paula Bennett still paying $ 3000 to unemployed people in the regions to move to the city?

      • Kiwiri 5.1.1
        10 June 2016 at 10:25 am

        $3000 should pay for a reasonable amount of petrol for driving to and a few touring trips around Auckland city in the mobile house called ‘car’, including being stuck in the traffic.

      • fisiani 5.1.2
        10 June 2016 at 11:29 am

        You have it the wrong way round.

    • weka 5.2
      10 June 2016 at 9:10 am

      How do people moving to Levin get a mortgage without having a job?

        • weka 5.2.1.1
          10 June 2016 at 11:32 am

          yeah and I bet you really believe that getting a job in a new town is as straightforward as looking on the internet as a random list of positions.

          • fisiani 5.2.1.1.1
            10 June 2016 at 12:04 pm

            You can get a job or just whinge. You can sell your $500,000 house in Auckland and buy a $300,000 house of the same size South of the Bombay hills. That leaves you $200,000 to start a business of your own. But wait , weka would then whinge about not having the ability to start a business or some other lame excuse or just blame the gummint.

            • Pat 5.2.1.1.1.1
              10 June 2016 at 12:09 pm

              keep spinning…..approx 50% of Aucklander’s don’t own a 500K(or otherwise) house to sell and downgrade from……what part of “unaffordable” don’t you understand?

            • Stuart Munro 5.2.1.1.1.2
              10 June 2016 at 12:22 pm

              Oh you mustn’t whinge – that nice Mr Key isn’t really your employee after all – he isn’t really just a liar and a thief and the worst economic manager NZ has ever seen. Make nice with the dictator and you might get a treat –
              “Only certainty in life: when the icy jaws of death close upon you, you will not have had enough treats.”

              Fisiani paradigm – the crawler’s credo.

            • weka 5.2.1.1.1.3
              10 June 2016 at 12:37 pm

              If you already have a house and job in Auckland why would you want to sell it and move to Levin? The debate is about people living in cars, not people who already have $500,000 equity in a house. Numpty. As far as I can tell, you’re the one that’s whining, about these terrible people who won’t pull themselves up by their bootstraps, but you’re just a bit confused about who these people actually are.

              • fisiani …
                10 June 2016 at 12:50 pm

                Read what is actually happening
                http://m.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11653723

                If you want an affordable house why choose to live in Auckland. Even though another 40 houses have been built there since yesterday it will still be expensive. What’s wrong with living in Levin? Are you chardonnay socialists so out of touch? No wonder you lose in Levin. You can still get a decent latte in Levin. There are vacant state houses all over the country.
                Do you really think that a single woman should live in a 3 bedroom state house when there is a family living in a van?
                http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11652668

                • Psycho Milt …
                  10 June 2016 at 1:31 pm

                  Houses that aren’t in the city experiencing the property bubble are cheaper? No fucking shit, Sherlock!

                  It’s a good job they didn’t put you in charge of fighting the Ebola outbreak – your “solution” would be to suggest people should just go and live in places that don’t have Ebola.

                  • Richardrawshark …
                    10 June 2016 at 1:49 pm

                    yeah but, um living where there was no Ebola outbreak would kind of work, wouldn’t it?

                    Just saying LMAO.

                  • fisiani …
                    10 June 2016 at 3:37 pm

                    Why choose to live in a bubble? Do you really think that the poor are hopeless? That they cannot have a life outside Auckland? No single person should be able to continue to rent a 3 bedroom state house. Surely you agree with that. Why bring up a family in a car when there is a warm dry comfortable house available?
                    It is possible to buy or rent a house in NZ for $200 a WEEK

                • Richardrawshark …
                  10 June 2016 at 1:46 pm

                  Do you want the 5 dollar argument or the ten dollar one Fisiani?

                  You link Nick and PB’s reply? We discussed that last night?

                  Fail, lets call you on stats? who is they when they say, THEY, made 40 houses a day, rich pricks like you?

                  Do we trust a government that lies over asset sales money and had they not diverted it we may not have an emergency social housing issue. I won’t even go into the housing bubble. YET.

                  Stats from the liars LMFAO, those who lied about crime statistics? Skewing the stats by not reporting crimes as the crimes they actually were, or just not reporting them.

                  Fisiani your party is such a all out failure, defending them looks as pathetic as the direction your neo lib policies have landed us.

                  You got a free reign, you got total power, you ran your neo lib agenda all out for 8 years and guess where we are. It doesn’t work get your head out of your arse and get with the program.

                  The program is about bettering NZ, and labour are far from communist socialism that’s BS and scare tactics, if a policy works use it, like most do, when you rely on doctrine ways of governance like National and a neo lib agenda this is what happens.

                • weka …
                  10 June 2016 at 2:13 pm

                  “Read what is actually happening”

                  That article is a nonsense. If you want me to take you seriously, cut and paste and make an actual point. Linking to two people who can’t organise their way out of a paper bag doesn’t count as an argument.

                  “If you want an affordable house why choose to live in Auckland.”

                  Lots of reasons. Are you too stupid to understand the reasons for why people are living there?

                  “Even though another 40 houses have been built there since yesterday it will still be expensive.”

                  lol, Smith and Bennett got out their magic wands and produced 40 affordable houses overnight.

                  “What’s wrong with living in Levin?”

                  Nothing. I don’t know why people would want to live in Auckland myself. But people do have their reasons, including work, family, other commitments, not being able to afford to relocate etc.

                  “You can still get a decent latte in Levin.”

                  That’s alright then.

                  “There are vacant state houses all over the country.
                  Do you really think that a single woman should live in a 3 bedroom state house when there is a family living in a van?”

                  The thing I love about this comment is that you sound so communist. Fucking brilliant.

                  • Gangnam Style …
                    10 June 2016 at 2:25 pm

                    “The thing I love about this comment is that you sound so communist. Fucking brilliant.” – I noticed that too, Stalin would have agreed with you Fisiani.

                    • fisiani …
                      10 June 2016 at 9:41 pm

                      Are you claiming that it is acceptable for a single woman to live in a three bedroom state house whilst a family is homeless? No wonderthe Left is languishing.

                • gnomic …
                  11 June 2016 at 1:10 am

                  Fizzer, you are a fruitcake. Like your chums Paula and Nick. Useless idiots all.

                  Or perhaps I misjudge you. This could be a very obscure attempt at satire?

            • katipo 5.2.1.1.1.4
              10 June 2016 at 12:47 pm

              When we have working people in NZ living in cars of forced to take out accommodation loans to live in a 200/night hotel that they will never be able to pay back, then it’s time to put aside all the tired old neo-lib-victim-blaming “it’s all about personal responsibility” arguments and address the problem.

            • North 5.2.1.1.1.5
              10 June 2016 at 10:13 pm

              Which assumes the person had a $500,000 house in the first place you fucking idiot. In the fullness of the whole matter, you dirty , low liar. We need to meet !

      • adam 5.2.2
        10 June 2016 at 3:23 pm

        Sub-prime mortgages Weka.

        The solution for the rich to enrichment.

        • weka 5.2.2.1
          10 June 2016 at 4:39 pm

          we don’t have that here though right? You can’t get a mortgate in NZ without a secure income.

    • Billy fish 5.3
      10 June 2016 at 12:16 pm

      Double plus good

  6. Sabine 6
    10 June 2016 at 8:57 am

    It would be interesting to know just how much money these two banks have lend to overseas investors.

    • Sam C 6.1
      10 June 2016 at 10:50 am

      Exactly. This is mere window dressing. Banks are driven by profit, not social conscience. How many loans are the banks actually excluding with this policy? My guess is not many. Chinese money is cheaper than bank rates in NZ, so “foreign buyers” would not be financing it through NZ banks anyway. Plus, if you believe the scuttlebutt, “foreign buyers” are repatriating their money out of their domestic markets, which means by and large they are paying cold, hard cash for their purchases.

      • whispering kate 6.1.1
        10 June 2016 at 4:00 pm

        That’s exactly what I thought, the banks aren’t really losing that much money surely by not loaning to Chinese buyers, Chinese buy in cash and that’s why they can just bid endlessly at house auctions (and I do have some experience of it as houses in my street almost on a weekly basis are snatched up by Chinese buyers who have very deep pockets) to whatever price until the floor is clear and everybody just drops out, they have wads of it, suitcases full of it, I have read of it in the newspapers where they buy expensive cars with suitcases full of it. Which is another thing I cannot fathom, surely banks when they are presented with wads of notes have a duty to report these transactions to IRD, the car dealers and realtors and even solicitors who deal with house transfers must be aware of all this cash flowing through the system. The young lass I saw at a recent auction phoned her Dad in China for him to transfer 1.3 or thereabouts into a bank account here to pay for the house she had just bought.

        So much for tightening up by not loaning to Chinese buyers, it looks like a PR exercise to me.

  7. Nessalt 7
    10 June 2016 at 9:07 am

    So banks are using their position to act as market stabilisers? Who would have thought that free market agents work as they are supposed to?

    makes a nice change from hearing Bloody banksters, reaping profits to send off shore, neo liberal trickle down free market economics has failed etc etc etc.

    • One Anonymous Bloke 7.1
      10 June 2016 at 9:21 am

      “Market stabilisers”.

      Nice try, Wormtongue. In their own words they are minimising risk to themselves.

      • Aaron 7.1.1
        10 June 2016 at 10:38 am

        I don’t think we can emphasise how unprecedented this is. Banks are allowed to be their own regulators these days and have, up to this point, proven to have a never ending appetite.

        It’s like, the Foxes, having been put in charge of the hen house, have actually decided to go easy on the hens! I think my head is about to explode with the improbabliity of it all.

      • Nessalt 7.1.2
        10 June 2016 at 12:11 pm

        which is stabilising the market. it’s the same thing as the RBNZ does with interest rates but done at a micro level. Free market agents act rationally to protect or further there interests adjusting the markets appetite. free market works again!

        socialism 0 : free market capitalist economics stopped posting scores ages ago to protect the sensitive socialists feelings. far better to let you think you idealism and caring actually achieves something in the real world, not just the imaginary world you choose to intellectually reside in.

        you should really study economics and or finance before commenting again. same goes for most of your comments TBH, think before you spam your keyboard.

        • Pat 7.1.2.1
          10 June 2016 at 12:18 pm

          free markets also self correct through crashes where investors are supposed to lose their bad investments, not be bailed out by taxpayers….that includes banks.

        • framu 7.1.2.2
          10 June 2016 at 12:24 pm

          ” Free market agents act rationally”

          according to the theory – not born out 100% by reality

        • One Anonymous Bloke 7.1.2.3
          10 June 2016 at 12:30 pm

          Wormtongue, the successes you are falsely claiming credit for belong to mixed social democratic economies. I’m not surprised your intellect is so piss weak you have to invent these pathetic strawmen: wingnuts and stupidity being so closely linked and all that.

          In minimising their own risk, the banks are simply transferring it to someone else.

          • Nessalt 7.1.2.3.1
            10 June 2016 at 3:00 pm

            you mean the homeowners who got tricked by those big mean banks into mortgages they can’t repay if interest rates go up? awww market agents acting in a rational fashion which results in a stabilisation of the market, who would have thought the free market actually works.

            i know you genuinely believe being a keyboard care whore hoovering up imaginary internet points actually makes a difference. i bet this is the only place where you aren’t invisible to all those around so you get to be a tough guy. people cut you off all the time don’t they? and no one apologises. i feel sorry for you. truly.

            • One Anonymous Bloke 7.1.2.3.1.1
              10 June 2016 at 3:51 pm

              Dimwit, did I say there’s anything wrong with banks minimising risk to their shareholders? Have you got some more strawmen lined up?

              As for the “free market”, “working”, must I rub your face in the fact that you live in a mixed economy again?

              You lose your bet, oh, and by the way, don’t you feel a vague sense of cognitive dissonance, criticising someone for making comments on an internet forum…by making a comment on an internet forum…stupidity and hypocrisy 😆

              • Nessalt …
                10 June 2016 at 4:30 pm

                haha back peddling on your constant criticism that new zealand is crony capitalist state run by the few now?

                our markets are free, free markets characterised by no or low barriers to entry and exit. there is regulation, but it isn’t particularly onerous and applies to the management of financial institutions in this instance, as opposed to the creation and dissolution of them.

                I make comments here to point out the incorrect nature and therefore irrelevance of your criticisms and “experiences” in your version of “real” new zealand. IF you’d like to start going on about cognitive dissonance, remember that my comments are always consistent. you are wrong, that is a consistent truism that I use. you on the other hand show an alarming inconsistency on your thoughts opinions and behavioural approaces, like most lefties. the only constant is that you agree with anything that is against the national government, so there is a theme, no matter how contradictory every opinion within your grand story arc is.

                • One Anonymous Bloke …
                  10 June 2016 at 6:49 pm

                  In fact, my constant criticism is that the National Party is corrupt and incompetent (hence the corruption), and really really shit at being a government. This causes unnecessary hardship and distress.

                  Not sure who you’re describing.

                  PS: the only incorrect nature you point out is in the strawmen you invent. It’s dull, in every sense of the word. Backpeddling from what exactly? Link to the comment I’m backpeddling from.

        • North 7.1.2.4
          10 June 2016 at 10:28 pm

          Oh Nessie bitch…….you’re Rodders Love Perks Hide coming over all erectial……how looooovely !

    • Kiwiri 7.2
      10 June 2016 at 10:20 am

      Good one, Nessalt – the banks are using their position to act as spin market stabilisers. FIFY.

      • Nessalt 7.2.1
        10 June 2016 at 12:13 pm

        good one simple simon. bet you chuckled to yourself for a good ten minutes over that one. giggling like a simpleton, at such an idiotic comment. knowing nothing and trying to turn a comment to a political angle that is barely relevant makes you look stupid. i wish you’d take the kiwi out of your name. you shame this country.

        • Anno1701 7.2.1.1
          10 June 2016 at 4:29 pm

          “take the kiwi out of your name. you shame this country.”

          pathetic…. truly craven

    • Colonial Viper 7.3
      10 June 2016 at 12:22 pm

      So banks are using their position to act as market stabilisers? Who would have thought that free market agents work as they are supposed to?

      Oh fuck off. Bank credit has been instrumental in making houses unaffordable in this country, and as already pointed out, this is purely a matter of self interest for the banks and for the banks shareholders.

      • Nessalt 7.3.1
        10 June 2016 at 2:55 pm

        you fuck off. everyone is ignoring my original point that the free market is working as it should.

        Stop injecting fucking caring meme’s. it’s so boring and brings zero real results or change. being seen to care does not equal equal knowledge.

        go like a few more kony 2012 posts on FB. that’ll save the kids. better yet, waffle on on the internet. that really effects change. OAB, looking at you

        • Pat 7.3.1.1
          10 June 2016 at 3:01 pm

          we don’t have a free market(and never have had thank god)…we have a (very poorly) regulated market…and its not working as it should due to a number of distorting interventions

        • One Anonymous Bloke 7.3.1.2
          10 June 2016 at 3:58 pm

          Have you caught up with the fact that you live in a mixed economy yet?

        • dave 7.3.1.3
          10 June 2016 at 6:59 pm

          everyone is ignoring my original point that the free market is working as it should. its not a free market how do you explain the rental supplement them ?????

          • One Anonymous Bloke 7.3.1.3.1
            10 June 2016 at 7:05 pm

            Nessalt is projecting: in fact, the only person ignoring the points others are making is Nessalt. I’d like some discussion of my assertion that the banks are simply shucking risk, rather than lowering it overall. Fat chance getting it from a wingnut.

    • Anno1701 7.4
      10 June 2016 at 1:51 pm

      dont mistake analytical capitalism for altruism ….

      they have runt he figures and they are minimizing risk, when the bubble bursts they know they cant chase the buyers back to wherever they are from and will not be-able re-coup any money from foreign nationals who flee their debts when all of a sudden their rental portfolio drops how ever % many in value compared to what they have borrowed based on their fraudulent declaration of earnings abroad

      its a “firewall” against the rampant mortgage frauds that have been perpetrated that we will find out about soon enough …

      • Draco T Bastard 7.4.1
        10 June 2016 at 3:22 pm

        +1

        The entire financial system’s a fraud but the open borders policies on financial capital has accelerated that way beyond the norm and now the people are going to have to pay for it.

    • Draco T Bastard 7.5
      10 June 2016 at 3:05 pm

      So banks are using their position to act as market stabilisers? Who would have thought that free market agents work as they are supposed to?

      Was them causing the problem in the first place also them working as intended?

      And to be honest I really can’t see this making enough of a difference.

      • Pat 7.5.1
        10 June 2016 at 3:09 pm

        nope, but its a signal for everyone to batten down the hatches……they are preparing for defaults.

    • North 7.6
      10 June 2016 at 10:20 pm

      Oh Nessalt what has happened to you right wing arse of a thing ? You acknowledge all of what you purport to throw shit at…….

  8. Eralc 8
    10 June 2016 at 9:11 am

    I used to work for one of these banks in Lending. We were constantly assessing risk, especially in light of the events and outcomes of the GFC. Since that time, the banks have really tightened up. What the banks have done is just BAU – nothing unusual about it, it’s just getting more publicity that’s all.

    The Banks aren’t losing out on revenue by doing this – they’re limiting their risk, managing their risk and will mitigate in some other way. They have shareholders to answer to, that and risk are the big drivers.

    As fisiani points out above, there’s no housing crisis – plenty of properties south of the Bombays at reasonable prices.

    • Kiwiri 8.1
      10 June 2016 at 10:05 am

      Yeah, no housing crisis south of the ‘Bombays’; check out those 3br houses for under $200k in Lumsden.

    • Colonial Viper 8.2
      10 June 2016 at 10:08 am

      As fisiani points out above, there’s no housing crisis – plenty of properties south of the Bombays at reasonable prices.

      Well, that would be fine if politicians and business got off their collective arses and started creating employment opportunities in the regions.

      • fisiani 8.2.1
        10 June 2016 at 1:12 pm

        Fancy owning 5 bedrooms for just $180,000
        http://www.realestate.co.nz/2818763

        $205 a week for a mortgage.
        Note that it is two houses. Live in one and rent the other.

      • Bob 8.2.2
        10 June 2016 at 3:26 pm

        Is it illegal to start a business yourself south of the Bombays?
        Why does everyone have to wait for someone else? Half of the complaints on here are people saying the banks give out money too easily, and I have heard many complaints on this site that business owners are tax dodging rich pricks, so why not borrow some of that easy money, pay tax and live comfortably in an affordable house?

      • AB 8.2.3
        10 June 2016 at 5:45 pm

        “Well, that would be fine if politicians and business got off their collective arses and started creating employment opportunities in the regions.”
        If politicians did it that would be ‘intervention’ which is ipso facto (and a priori) bad in the strange world of Nactonomics

  9. Colonial Viper 9
    10 June 2016 at 9:55 am

    I think we may have missed the big statistic here: more than 40% of house sales throughout the country are by investors.

    That activity, especially as it will be concentrated at the rental end of the market, locks out a massive amount of would be first home buyers.

    This is the problem in NZ.

    • Pat 9.1
      10 June 2016 at 10:04 am

      1990 population 3.3 million …..70,000 state rentals

      2016 population 4.6 million…..69,000 state rentals

      • Kiwiri 9.1.1
        10 June 2016 at 10:19 am

        Can’t wait for Paula-Nick to do a tandem over how their government is a victim of its own fabulous financial success that’s reflected in the stunningly drastic drop in the real rate of state rentals.

        Leaving those two to front the media, Mr Smile-and-Wave has buggered out of town.

        • Pat 9.1.1.1
          10 June 2016 at 10:31 am

          I think you do our dear Paula and Nick a grave disservice…..its obvious to anyone how hard they are trying to solve the housing problems of our less affluent NZers

          • Kiwiri 9.1.1.1.1
            10 June 2016 at 10:43 am

            *coffee over keyboard*

            And it is such a great pity for Paula that Australia has changed so much since 1788-1868 that she can’t issue a press release this afternoon to say those living in cars, garages and streets will be criminalised and then shipped to West Island before GE2017.

            • Pat 9.1.1.1.1.1
              10 June 2016 at 10:59 am

              Ah …West Island…that diminishing home of our ever sympathetic financial institutions….perhaps Paula and Nick may care to take an (extremely) extended fact finding visit.

    • Infused 9.2
      10 June 2016 at 10:34 am

      Yeah, and you will find it’s not foreigners. It’s us, being greedy fucks.

      • Kiwiri 9.2.1
        10 June 2016 at 10:51 am

        You are a genius. Update: it’s Lumsden’s fault, Labour’s fault, and all our own fault.

      • Gangnam Style 9.2.2
        10 June 2016 at 2:35 pm

        “It’s us, being greedy fucks.” – well duh, that’s the whole ‘neo-lib’ thing/raison d’être innit? The Invisible Hand is out to grab & hoard as much as it can.

  10. Infused 10
    10 June 2016 at 10:08 am

    It’s bullshit and shows how little you understand.

    True ‘foreign’ buyers bring the money in from China where it’s far cheaper. This was just a marketing ploy as the banks will have very little borrowing from foreign buyers.

    A master stroke by the banks.

    • save nz 10.1
      10 June 2016 at 11:34 am

      Yep foreign buyers bring foreign money in, and then Kiwis have to pay higher interest rates for their mortgages and businesses.

      Lose, lose.

      But agree with your point, that normal foreign investors use much cheaper rates available practically everywhere else in the world than NZ.

      So for locals it is not a fair playing field, you could be paying over 4% higher interest than our foreign buyers when you buy anything here.

    • Visubversa 10.2
      10 June 2016 at 1:33 pm

      Absolutely – the money comes in from overseas and the only Pakeha hands that touch the whole process are the Consent people at Council.

  11. Observer Toke 11
    10 June 2016 at 10:32 am

    .
    . Could you please try and understand that no one south of the Bombay Hills wants anyone from Auckland.

    Please try and work out why that is. It is simple enough. It has to do with rising house prices; rising rentals; low rural wages; and gross lack of jobs; clinics but few Hospitals. High cost of travel to Hospitals. And to other essentials services.

    Keep Aucklanders in Auckland. They are incompetent; unskilled; lazy and lacking compassion. Big on ego. Short on everything else.

    They have had near two hundred years to get Auckland right. Still, it is in a worse state than ever!

    It is Auckland’s task to get their incredible mess fixed. Leave the rest of New Zealand out of their pooh.

    • b waghorn 11.1
      10 June 2016 at 10:52 am

      Your completely wrong. Lose of population in rural towns is what has driven the reduction in services, most of the issues you mention could be solved by government actively pumping life back into the provinces.

      Oh and not all of us are anti aucklanders. Get sick of hearing about Auckland yes .

    • Sabine 11.2
      10 June 2016 at 11:12 am

      so are you saying that Aucklanders are not New Zealanders?

      No one from New Zealand ever moved to Auckland? Really?

    • Chumly 11.3
      10 June 2016 at 4:59 pm

      Well…I guess to an extent there is some of that rhetoric bubbling around.
      Probably what killed the regions was the rate at which technology just never made it out there. NZ was so incredibly slow on the uptake and in realising that the internet was the future (and that applies in a general sense, too).
      The lure of the city! Oh the city with all it’s everything!

      Fair to say New Zealand’s egalitarian heyday was infact when the regions were thriving.
      Take me back to the sheep farm.

    • Treetop 11.4
      10 June 2016 at 8:27 pm

      Pleased that you raised access to a hospital.

      There is the health shuttle which runs between Levin and Palmy, missing it would be a problem.

      Not sure if still the case, Levin did not have a ASB bank four years ago.

      Leaving the town using public transport is the only way in or out of Levin if carless. Short trips on Intercity are quite dear. To get around Levin a push bike (ok for a single person with average health) is an option. Walking is a last resort.

      The Auckland rail system is 100 years behind.

      Housing in Auckland is about 30 years behind.

      Family separation can be tough (five members of my family had to relocate several weeks ago, my life is not the same).

      Living in NZ is a lot harder than it used to be.

      Key works for the US first and NZ takes second place, that is what I think the problem is.

  12. save nz 12
    10 June 2016 at 11:29 am

    Most foreign investors have access to much cheaper interest rates than NZ so would be using the cheaper rate, so my guess is that the foreign investors that are using NZ banks to borrow, are likely to be scamster’s or to money launder.

  13. Observer Toke 13
    10 June 2016 at 12:19 pm

    .@ B Waghorn

    . I think if you read what I have written, we are in agreement about a lot of the rural issues.

    If jobs were increased in rural areas there would be no problem with shipping people out of Auckland. But jobs (income) is the first and foremost necessity for any adult human being.

    Auckland appears to have jobs but has run out of affordable housing. This has caused high rental rates.

    So instead of sending people to places that have no jobs and no prospects, why not get Auckland to build affordable houses.

    My shock at the incompetence of Auckland is not against individual people. But I think their idea of getting rid of people by sending them off to far away jobless places is absurd.

    • Colonial Viper 13.1
      10 June 2016 at 12:25 pm

      Plenty of people from regional NZ who have moved to Auckland for jobs would love to leave the bloody place if there were jobs back nearer to their home towns.

      • Stuart Munro 13.1.1
        10 June 2016 at 2:34 pm

        +1000

      • Richardrawshark 13.1.2
        10 June 2016 at 3:07 pm

        If you move away from work, WINZ I suspect will cancel your benefit. There are only certain area’s they actually allow you to move from and your forgetting that.

      • Little Kiwi 13.1.3
        14 June 2016 at 6:20 pm

        Aucklanders shouldn’t be forced to move because of speculation. It’s moving rapidly to the rest of the country so they could move and not much later wind up with the same issues. There is a lot of focus on Auckland but the problem is rapidly becoming country-wide. The homeless situation is getting some global attention now, so the govt can’t deny it’s a problem any longer. To be honest I did love leaving Auckland but I can’t afford to rent where I am now and the next move is overseas because I can. I just feel really sad that NZ has come to this level of greed.

    • framu 13.2
      10 June 2016 at 12:28 pm

      “My shock at the incompetence of Auckland is not against individual people”

      “They are incompetent; unskilled; lazy and lacking compassion. Big on ego. Short on everything else. ”

      fair points on the rest – but really?

    • save nz 13.3
      10 June 2016 at 1:13 pm

      @Observer Toke -it’s not Auckland people trying to do these ridiculous things, – it’s Wellington to Auckland.

      Even the stupidest journalist at Granny is now seeing that they are looking like idiots mimicking the government on housing, and saying that their SHA are working. RMA grants 99% of consents. You can put in a roll of toilet paper with a plan and a cheque and Auckland council planners will consent it if you pay them enough. It’s the built houses that are missing from the big picture, that, and the infrastructure and too many people.

      Some Troll yesterday spouting that line – 40 building consents per day, is somehow 40 houses available now and built for affordability!

      Get the sock puppets out again.

      National have had 8 years to solve it and they have added 100,000’s of extra people in that time, National are creating the housing crisis!

      Now apparently not only the poor have to move out to make way for whoever the government apparently deems more worthwhile to house in Auckland (Sky city workers maybe?) but also the middle class should sell their house in Auckland and then move somewhere cheaper to free up housing.

  14. Adrian 14
    10 June 2016 at 12:29 pm

    It,s complex but any private money coming out of China is pretty much illegal, you have to put it in a banks special account there and draw out a similiar amount in an overseas subsidiary and if the money is ill-gotten ( as a lot of it is ) and dodgy it gets even trickier involving gold and diamonds etc.
    Do we really want dodgy fuckers investing here?

    • Colonial Viper 14.1
      10 June 2016 at 12:41 pm

      In which jurisdication is that money illegal Adrian?

      Why is it that the NZ banking system and NZ real estate agents accept illegal money?

  15. Observer Toke 15
    10 June 2016 at 12:30 pm

    . @ Sabine

    Are you proud of Auckland for not having adequate affordable housing and reasonable rents?

    Don’t you want them to get cracking and fix the situation they have got themselves into?

    Why would you want to shunt your fellow Aucklanders off to places that have no jobs?

    Auckland is New Zealand’s dumb city. I regret if that offends you.

  16. Draco T Bastard 16
    10 June 2016 at 12:57 pm

    In those states, if a property ends up worth less than the mortgage, the homeowner can effectively post the keys back to the bank and leave their debt behind them.

    In New Zealand there’s no such escape: the debt stays with the borrower.

    Translation: The lenders are protected from the risks that they take and all the risk is placed upon the borrowers.

    If a nation has good savings then it is not so dependent on foreign investment and less vulnerable to global economic shocks, MacCulloch says.

    Actually, if we didn’t allow foreign investment then foreign borrowing wouldn’t be a problem. And really, foreign money doesn’t actually bring anything of value to NZ as we can always afford to utilise our own resources. If all available resources are presently in use then all foreign cash does is push up inflation.

    Debt itself is not inherently good or bad. “As a financial tool it is a wonderful invention,” says MacCulloch.

    “It allows you to buy a house and pay for an education. So you can smooth consumption over your life cycle.

    “You need debt. It’s sort of fundamental to economics.

    Typical bollocks from an economist who wouldn’t know what an economy was if they tripped over one. And certainly doesn’t understand the position of society within peoples lives.

    Debt is fundamental to the rich getting richer off of other peoples work. It has no other purpose.

    We are told repeatedly we must have a strong banking sector to have a successful economy. But the reality is they are not the doers, they are only the facilitators. Somehow we’ve put the facilitators on a pedestal, in a way that has never happened before in history.

    Yeah we have the most notable being the Great Depression and then the GFC but we’ve been doing it consistently for the last 5000 years of recorded history and it always ends up the same way – with the collapse of the society that does it.

    We cannot afford the rich

    Bill English certainly remains adamant that individuals are best placed to make their own choices about borrowing and spending.

    Actually, individuals haven’t got a friggen clue as they haven’t got the information needed to put their borrowing into the perspective of the entire society and what society can afford. That’s what bubbles are – individuals pushing spending and borrowing beyond what the society can afford. And that’s assisted by the fact that the private banks create money every time that they make a loan and they’re incentivised to maximise lending so as to maximise profit.

    The profit motive bringing about the worst possible result for society

    The US can sustain 100 per cent of gross government debt to GDP because it is a super-economy

    No, it’s got an economy that’s identical to our one. It has it’s physical resources, it has its people and it has its people’s skills. And that’s it. Their huge land mass means that they’ve got a lot of those things but it’s still the same as every other economy.

  17. Takere 17
    10 June 2016 at 1:05 pm

    So is the catalyst for the Nat’s to call for an early election? The election you wouldn’t want to win?

  18. save nz 18
    10 June 2016 at 1:29 pm

    Is John Key and the National government going to call the banks racist like they call everyone else for trying to contain the problem and lesson the stability of NZ?

    • Richardrawshark 18.1
      10 June 2016 at 1:51 pm

      Only if they refuse to lend to people with Chinese sounding names 🙂

  19. Observer Toke 19
    10 June 2016 at 2:23 pm

    To: SaveNZ

    . I can agree with you that Parliament (which is rock solid out of touch) has allowed a situation to build up. Far too many immigrants seeking residence in Auckland, where there is a morgue like paralysis in infrastructure, as well as in additional Housing.

    The captain of a ship knows that if you put too much freight on it it will sink in a rush of chilly bubbles.

    On top of the morgue mode, 40% of our houses go to foreign non resident investors.

    But worse still, the prices of the houses are pushed up to ridiculous levels which only the foreigners can afford.

    The out of touch Parliament does nought. The Council keeps its morgue like immobility and the people of Auckland don’t give a twopenny cuss.

    We need a leader who will reduce immigration; who will put ceiling prices on houses and rentals until things settle; and which will build more infrastructure and Housing.

    That Captain could be Bernie Sanders. He is Mr Common Sense. But it would seem Auckland wants to do nothing, and drown like silly little shrimp. Bugger common sense. Eh

    • save nz 19.1
      10 June 2016 at 4:31 pm

      @Observer Toke – actually it’s a great strategy for National clinging to power. They move poorer voters out of Auckland and richer overseas folks in to vote for them. They have no intention of changing this – that is why no houses are being built and those that are, are not for local waged folk. Then locals buying are expected to pay for increased house prices with higher mortgages and are between a rock and a hard place and yes, nobody in this mess can afford for house prices to fall significantly.

      If you have a look at what happened in the USA with the GFC, it was the ordinary person who coped it, losing their house, their job, their medical and their retirement savings, while the government bailed out the banks. After that crash there was not this inequality gain that a lot of people in NZ seem to think will happen if property prices crash here, quite the opposite has occurred in the US, everyone lost their jobs and savings, the poor are poorer, the middle class are poorer, the rich are poorer and the super rich own everything, including the politicians.

  20. Richardrawshark 20
    10 June 2016 at 3:11 pm

    Imagine if for any reason,. something came along that scared these speculators and foreign investors enough to pull out of housing.

    69k mortgage half way there.. 100 a week..so happy, so, so, happy.

  21. Smilin 21
    10 June 2016 at 5:40 pm

    The ultimate exercise in self regulation by the govt -Wait for the market to do something even though the govt has a democratic obligation or is it just my politics not theirs

  22. Observer Toke 22
    10 June 2016 at 5:40 pm

    .
    To: Save NZ

    . I sincerely hope that many people will read your most recent Post. 19.1

    For mine, you have the issues straight, clear and very telling!

    .
    I truly hope Auckland gets off its ass and lets the Pollies and the Council know what they should be doing. In the meantime Auckland is drifting like a sinking boat …

    • Treetop 22.1
      10 June 2016 at 8:55 pm

      “In the meantime Auckland is drifting like a sinking boat…”

      Success creating failure?

      Heard a discussion on the port of Auckland last weekend. I thought similar to Peters, fill up the harbour with ocean liners (at least those embarking will not require a bed for the night) and move the container operation up north, that just may create some regional growth.

      I won’t be here in 50 years, so I will not know if the Auckland harbour gridlock will be another fail.

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