"it will take 30 years to recover"

[Austrokiwi]

There offering me $500,000 but its all debt created from fresh air and they want to charge me interest on fresh air?

Bankster criminals they should be in court for fraud concerning the current pyramid scheme and the transfer of wealth, resources and means of production theft!

IN theory; when I paid of my NZ mortgage I actually destroyed money: Ie: took it out of the system. The only way to recreate that money is for me to re-borrow against the property again. Now I am not one of those who says the only solution is to go back to a specie backed currency, the mean reeason is there is more paper issued than gold and silver available both mined and un-mined in the world. The bankster criminals are only operating the way they do because successive NZ goverments have given up the right that they took in 1933; to control the money supply in NZ! I am sure they will argue they have given that right to the reserve bank but they don't seem to have realised that they have allowed banks to take back the right to print money through debt instruments ( credit cards). The problem is NZ governments don't know what money is and how it works!!!!


But I believe there is a potential to operate two currency systems. In otherwords retain the current fiat currency but introduce paralell to it a specie back currency. I am sure the reserve bank and Post office would argue thats already happening...............but it isn't although silver and gold commemorative coins are issued in NZ dollars there is no ryme or reason to the money issued a $10.00 coin can be .1 oz gold up to 1.4 oz gold. Also the government insists on taxing any gold coin that is not .999 standard or higher this is completely out of sync with the rest of the world.

[Badger]

The great thing about GOLD SILVER is its limited supply its natures way of preserving the resources we "ALL" need for survival.

quote" when I paid of my NZ mortgage I actually destroyed money"

Thats a flashing red light! Since to my mind capitalism is about creating capital not debt...

The rampent creation of credit by banksters and there allies the governments and corporations of the world has only fueled the distruction of much of the planet and dispossed people to look after themselves by fittting in with what nature has provided eg cash crops instead of growing food! A IMF and World Bank policy!

With out a functioning eco system life on this finite sphere is over as we know it.

Simple basic out come really I just dont see whats so hard for so many to grasp...

[Perry]

Simple basic outcome really. I just dont see what's so hard for so many to grasp...

It's called a paradigm shift, lifestyle-change, mindset makeover, etc.
Apart from a tiny minority, I suspect that everyone else is waiting
for everyone else to make the first move. The W'gton woodenheads
will be the last - such is the nature of their leadership. Hell, wasn't
it just a week ago that the drones woke up to the trans-Tasman
people drain? What were they doing, these last 4 years?


Recent rumour has it that one USA airline is laying off 590 pilots;
Lufthansa is proposing to shut down in 18 months if Avgas doesn't
come down in price.

Interesting times.

[princess]

at one airline's internal meeting last week, the discussion point was around the lack of trans tasman competition should avgas continue to increase in price.

One must suggest that some airline's bottom lines are looking pretty shaky these days!

[Badger]

It's called a paradigm shift, lifestyle-change, mindset makeover, etc.
Apart from a tiny minority, I suspect that everyone else is waiting
for everyone else to make the first move. The W'gton woodenheads
will be the last - such is the nature of their leadership. Hell, wasn't
it just a week ago that the drones woke up to the trans-Tasman
people drain? What were they doing, these last 4 years?


Recent rumour has it that one USA airline is laying off 590 pilots;
Lufthansa is proposing to shut down in 18 months if Avgas doesn't
come down in price.

Interesting times.

Still sorting out the "KNOWLEDGE ECONOMY?"

[Perry]

Right. Try eating knowledge and see
how sustaining it isn't.

Or gold and silver, for that matter.

[Austrokiwi]

The great thing about GOLD SILVER is its limited supply its natures way of preserving the resources we "ALL" need for survival.

quote" when I paid of my NZ mortgage I actually destroyed money"

Thats a flashing red light! Since to my mind capitalism is about creating capital not debt...

The rampent creation of credit by banksters and there allies the governments and corporations of the world has only fueled the distruction of much of the planet and dispossed people to look after themselves by fittting in with what nature has provided eg cash crops instead of growing food! A IMF and World Bank policy!

With out a functioning eco system life on this finite sphere is over as we know it.

Simple basic out come really I just dont see whats so hard for so many to grasp...

I think alot of people recognise it It is just so horrific they ignore it hoping some one else will solve it...... They treat it as an SEP (someone elses problem)

[exnzpat]

There's 1.3 million mortgages spread amongst 4 million people.
You work the % out.

The average mortgage is around $135,000.
The average house is valued around at $350,000.
Average LVR = 38%

There are 1.4 million dwellings:
- 900,000 owner occupied:
..... 500,000 with mortgages
..... 400,000 without mortgages
- 500,000 rentals (no idea how many have mortgages)

Not sure if this helps.

Population: 4,000,000.00
Mortgages: 1,300,000.00
Mortgages per Population: 32.5%

Population: 4,000,000.00
Dwellings: 1,400,000.00
People per Dwelling: 2.86

Dwellings: 1,400,000.00
With Mortgage (Owner Occupied): 500,000.00
Dwellings with Mortgage: 35.7%

Dwellings: 1,400,000.00
Without Mortgages (Owner Occupied): 400,000.00
Dwellings Without Mortgage: 28.6%

Dwellings: 1,400,000.00
Rentals: 500,000.00
Dwellings that are Rented: 35.7%

Dwellings: 1,400,000.00
Owner Occupied: 900,000.00
Dwellings that are Occupied by Owner: 64%

Dwellings: 1,400,000.00
With Mortgage plus Mortgages, Security Undetermined: 1,300,000.00
Ratio: 92.9%

1,300,000.00 Mortgages
(500,000.00) Dwellings with mortgages
800,000.00 Mortgages, security undetermined

Mortgages: 1,300,000.00
Mortgages, Security Undetermined: 800,000.00
Ratio: 61.5%

If this is correct then we could safely say:
1. There are 100,000 dwellings without mortgages.
2. There are 500,000 1st mortgages.
3. At least 500,000 2nd mortgages.
4. Then another 300,000 3rd mortgages.

With only 1.4 million dwellings and 1.3 million mortgages versus the fact there are only 0.5 million owner occupied dwellings with a mortgage of some sort (either 1st, 2nd, 3rd or combination of one or all) then I would say that the average New Zealander shoulders a pretty mighty burden of debt.

Because we don't know the equity value of each mortgage then we really can't say how indebted New Zealanders really are, but we can make assumptions: consider that each mortgage note is valued at $1 and all mortgage holders own a range of equity between 0% of and 75%.

1st Mortgage -- 500,000.00 -- 0% Equity -- $500,000.00 -- Minus 20% Equity -- $400,000.00 -- Minus 50% Equity -- $250,000.00 -- Minus 75% Equity -- $125,000.00

2nd Mortgage -- 500,000.00 -- 0% Equity -- $500,000.00 -- Minus 20% Equity -- $400,000.00 -- Minus 50% Equity -- $250,000.00 -- Minus 75% Equity -- $125,000.00

3rd Mortgage -- 300,000.00 -- 0% Equity -- $300,000.00 -- Minus 20% Equity -- $240,000.00 -- Minus 50% Equity -- $150,000.00 -- Minus 75% Equity -- $75,000.00

Totals: $1,300,000.00 -- $1,040,000.00 -- $650,000.00 -- $325,000.00

Sorry, my formatting sucks here.

This averages out to: $828,750.00 or 63.75% of equity held in all 1.3 million mortgages (and I'm sure you would agree that is a pretty generous average). If this is the case then home values in New Zealand only need to fall 36.25% before we see banks calling in 75% of their loans.

[tricky]

Thanks for those figures, exnzpat.
I got lost in them by the end so I'm hoping you can provide some more detail.

For starters:

If this is correct then we could safely say:
1. There are 100,000 dwellings without mortgages.
2. There are 500,000 1st mortgages.
3. At least 500,000 2nd mortgages.
4. Then another 300,000 3rd mortgages.

Point 1 is wrong.
I said there are 400,000 (owner occupied) without mortgages with another unknown amount of rentals without mortgages - so perhaps 500,000 dwellings without mortgages?

This averages out to: $828,750.00 or 63.75% of equity held in all 1.3 million mortgages (and I'm sure you would agree that is a pretty generous average). If this is the case then home values in New Zealand only need to fall 36.25% before we see banks calling in 75% of their loans.

You lost me here.
$828,750.00 - what is this figure? Three times the average house?
The average mortgage is $135,000.

cheers

[Perry]

It might aid comprehension if the last dot
and trailing zeros were not shown, unless
they are needed for the 'look at' exercise.

(The .00 may be coming over when copying
cell values from a spreadsheet)

[Jumpin]

Population: 4,000,000.00
Mortgages: 1,300,000.00
Mortgages per Population: 32.5%

Population: 4,000,000.00
Dwellings: 1,400,000.00
People per Dwelling: 2.86

Dwellings: 1,400,000.00
With Mortgage (Owner Occupied): 500,000.00
Dwellings with Mortgage: 35.7%

Dwellings: 1,400,000.00
Without Mortgages (Owner Occupied): 400,000.00
Dwellings Without Mortgage: 28.6%

Dwellings: 1,400,000.00
Rentals: 500,000.00
Dwellings that are Rented: 35.7%

Dwellings: 1,400,000.00
Owner Occupied: 900,000.00
Dwellings that are Occupied by Owner: 64%

Dwellings: 1,400,000.00
With Mortgage plus Mortgages, Security Undetermined: 1,300,000.00
Ratio: 92.9%

1,300,000.00 Mortgages
(500,000.00) Dwellings with mortgages
800,000.00 Mortgages, security undetermined

Mortgages: 1,300,000.00
Mortgages, Security Undetermined: 800,000.00
Ratio: 61.5%

If this is correct then we could safely say:
1. There are 100,000 dwellings without mortgages.
2. There are 500,000 1st mortgages.
3. At least 500,000 2nd mortgages.
4. Then another 300,000 3rd mortgages.

With only 1.4 million dwellings and 1.3 million mortgages versus the fact there are only 0.5 million owner occupied dwellings with a mortgage of some sort (either 1st, 2nd, 3rd or combination of one or all) then I would say that the average New Zealander shoulders a pretty mighty burden of debt.

Because we don't know the equity value of each mortgage then we really can't say how indebted New Zealanders really are, but we can make assumptions: consider that each mortgage note is valued at $1 and all mortgage holders own a range of equity between 0% of and 75%.

1st Mortgage -- 500,000.00 -- 0% Equity -- $500,000.00 -- Minus 20% Equity -- $400,000.00 -- Minus 50% Equity -- $250,000.00 -- Minus 75% Equity -- $125,000.00

2nd Mortgage -- 500,000.00 -- 0% Equity -- $500,000.00 -- Minus 20% Equity -- $400,000.00 -- Minus 50% Equity -- $250,000.00 -- Minus 75% Equity -- $125,000.00

3rd Mortgage -- 300,000.00 -- 0% Equity -- $300,000.00 -- Minus 20% Equity -- $240,000.00 -- Minus 50% Equity -- $150,000.00 -- Minus 75% Equity -- $75,000.00

Totals: $1,300,000.00 -- $1,040,000.00 -- $650,000.00 -- $325,000.00

Sorry, my formatting sucks here.

This averages out to: $828,750.00 or 63.75% of equity held in all 1.3 million mortgages (and I'm sure you would agree that is a pretty generous average). If this is the case then home values in New Zealand only need to fall 36.25% before we see banks calling in 75% of their loans.

Lock up your calculators guys, we've got a live one here!!

[exnzpat]

The problem is formatting. I spent over an hour trying to put that post into some semblance of order. A whitespace issue no doubt. Perhaps the mods can jump in and explain how to post jpegs, graphs and tables… please!

Tricky, yes I had the same problems when looking at the numbers but decided that it did made sense the way you posted it:

There are 1.4 million dwellings:
- 900,000 owner occupied:
..... 500,000 with mortgages
..... 400,000 without mortgages
- 500,000 rentals (no idea how many have mortgages)

If you add it up it makes sense 900,000 owner occupied broken into two categories with and without mortgages.
Also 900,000 owner occupied (with and without mortgages) plus 500,000 rentals does equal 1.4 million dwellings.

Anyway, the blue text is probably the most confusing. Basically, there are 1.3 million mortgages each of which is of a different age. Therefore, each mortgage must have some equity and some debt for it to exist -- but we don’t know how much of either.

So, I hypothetically valued each mortgage note at one dollar and then subtracted 0% equity, 20% equity, 50% equity and 75% equity from each note and then averaged out what was left (what was left to pay on the note that is, in other words: debt). I did not consider interest because that would be way more complicated…trust me; this looked really good on the spreadsheet.

Anyway, the $828,750.00 is the average debt of those 4 categories (0% equity, 20% equity, 50% equity and 75% equity). Which when considered against the dollar value of 1.3 million mortgages came to 63.75%.

This means, in this hypothetically argument that of all 1.3 million mortgages 36.25% is equity and if the collective market value of the all New Zealand homes falls below this value then banks will call in their loans. And yes, if you are wondering I am a nerd.

[Tucker]

While that is a good guess it could be way out because there could be a lot more with low LVR's or mortgages nearly paid off than some with big mortgages, but still 60 odd percent is probably a good bet.

Someone mentioned $135,000 where did this come from?

[Bob Kane]

Here's my 2 cents worth:

Assumptions:
1. 500,000 rentals - some without mortgages but I suspect most will have a mortgage. I'll take a stab and say 400,000 have mortgages.
2. Average mortgage is for $135,000 - stats from the banks.
3. A dwelling may have more that one mortgage.

Workings:
1. 500,000 PPORs have mortgages plus 400,000 rentals with mortgages = 900,000 dwellings with mortgages.
2. 1.3 million mortgages spread over 900,000 dwellings = 1.44 mortgages per dwelling.
3. Average mortgage is $135,000.
4. Average mortgage per dwelling = $135,000 * 1.44 = $194,400
5. Average dwelling value = $350,000 which has $194,400 mortgage and $155,600 equity. LVR = 55%
6. Dwellings have to drop in value by 45% before the banks get nervous.

Make sense?

[Austrokiwi]

Here's my 2 cents worth:

Assumptions:
1. 500,000 rentals - some without mortgages but I suspect most will have a mortgage. I'll take a stab and say 400,000 have mortgages.
2. Average mortgage is for $135,000 - stats from the banks.
3. A dwelling may have more that one mortgage.

Workings:
1. 500,000 PPORs have mortgages plus 400,000 rentals with mortgages = 900,000 dwellings with mortgages.
2. 1.3 million mortgages spread over 900,000 dwellings = 1.44 mortgages per dwelling.
3. Average mortgage is $135,000.
4. Average mortgage per dwelling = $135,000 * 1.44 = $194,400
5. Average dwelling value = $350,000 which has $194,400 mortgage and $155,600 equity. LVR = 55%
6. Dwellings have to drop in value by 45% before the banks get nervous.

Make sense?

Makes sense: but I would say we have to take a range from 36-45 % drop. But is there a base assumption here that also needs to be challenged?
Can banks continue with their current risk profiles, and obtain the funding they need?