All banks are bastards, but sometimes they speak warnings.

This is a followup of an earlier post out of sync. We are hearing from friends, who are buying houses, renovating, and they all say that money is cheap and their repayments low. We are paying down what debt we have as fast as possible. If we move into hyper inflation, that would be irrational: but with the amount of money being pumped into our economy we should expect deflation.

“Housing demand has remained strong, spurred by low mortgage rates and a speculative dynamic,” the report says.

“Added to that, a lagged response in new listings has meant that buyers are chasing relatively few properties – a perfect storm for house price rises.”

However the report sounds a note of caution about how long those conditions will last.

“We are wary about the sustainability of the upturn,” it says.

“Low mortgage rates will provide ongoing support, but the market appears out of step with fundamentals.

“The RBNZ is planning to re-impose LVR [loan-to-value ratio] restrictions, and banks have already signalled a tightening in credit conditions for investors.

The report also sees an increase in listings, which will increase the numbers of properties available for sale.

“The outlook is uncertain, but on balance, we see some cooling in the market over time,” it says

“The question is how long this raucous party can go on.

The crypto prices are over valued, in NZ dollars at least. The question, like gold, has to be if the dollar is actually worth less and the assets priced correctly or the reverse.

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This is the real pressure. We have imported a ton of people and not built infrastructure.

A dismal Wellington flat described as “on the edge of liveable” is being advertised for $815 a week – and a tenant says people are willing to pay the price.

Isaac Kirkwood has lived at 21 Marion St for two years. The building is cemented in Wellington’s party scene – it’s been home to wild all-nighters so hedonistic they’ve been documented by Vice, and is even listed as a venue on underground music site Under the Radar.

The apartment’s reputation as a party block has spanned almost two decades – one former tenant who resided in the apartment in 2002 told Newshub it was damp and worse for wear even then – but still a good place for a rager.

Kirkwood says they held some pretty crazy parties themselves – one of which was attended by about 300 people.

Beer-soaked reputation aside the flat is still a home – with dingy, threadbare carpets, an oven that works “90 percent of the time” and a yellow sticker from the council which warns a moderate earthquake could bring the building down.

Kirkwood says the flat is “more functional than it looks”. He’s now moving out with his four other flatmates and is searching for people to fill the flat.

Their listing for the flat on social media stirred up a firestorm, with people saying it was “worse than a prison”, “a f—— joke” and “definitely illegal”.

The budget has been tightened, and I’m not shopping this black Friday. The aim is to be more anti-fragile. The side gigs are started, and some are working, some are not. (No I am not monetizing this). I’m writing this the day after the station wagon decided to shed the alternator belt (car is maintained but well over 100 000 miles on it) and we got hit with an unexpected bill.

We have cushion built in. Not enough, but some. Do likewise.

And if you can’t survive in the firm you are in or the town you are in, leave now. If you have to leave countries, you should have left two years ago.

Ideally, live where there is at least a narrow (one way) bridge between you and the nearest town, and in an area without cellphone coverage. Where you would have no option but to homeschool. In my field, that is not an option.

Yet.

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John Wilder
6 months ago

Yup, the times are getting tighter. And stranger.