What’s happening with NZ interest rates?
Filed under: Banks, Cost of living, Economics, General Budgeting, Interest Rates, Credit Cards & Mortgages in NZ
Well, the short version is: they are going up!
The longer version is that it looks like we are the only sodding country whose central bank seems to want to increase base interest rates!
If you pop onto the HiFX website, they keep a running sidebar of Base interest rate announcements around the world. Not only do we still seem to have nearly the highest rates (other than Australia lol) but ours is going up when the others are holding.
Incidentally, thats also the page that tells you how bad the exchange rate is right now. Sorry.
There is some sort of good news in the papers today, it seems that Bollard – the governor of the Reserve Bank, may actually be stopping with these silly rises, because – guess what – the economy isn’t actually picking up as well as it needs to (well Helloooo! My Mortgage is getting more expensive – where the hell do you think Ive got any money to go out and buy stuff with!). And apparently – the employment figures here were supposed to improve , and they actually worsened. Now, Mr Bollard hasn’t actually said himself that he wont be raising interest rates – the “economists” have said that they think the chance is now 25% instead of 75% that he will raise them. But that’s the way it works – economists blather on for weeks before an announcement is due, telling us what the Governor is going to say, which always makes me wonder why the governor bothers with the announcements in the first place.
Theres a wonderfully obtuse piece of prose in the article which I just had to share:
“If the economy pushes along at near-potential rates of growth, the cash rate must head back towards neutral. Neutral is not 3 per cent,” said BNZ head of research Stephen Topliss.
I have absolutely no idea what the hell that means lol. What on earth is a “near-potential rate of growth”?
So what’s the bottom line?
Well, mortgages are more expensive. Floating rates are around the 6.15% – 6.75% range, up from about 5.5%. 2 years rates are around 6.75% and 5 year rates are around 7.75% for standard mortgages. The 5 year rates seem to be fairly steady at the moment, but the floating and 2 year rates have increased with the 2 rate rises.
Even if Mr Bollard doesn’t increase the OCR on the 16th September – I would be looking at factoring in some more rises if you are looking at needing to buy a home in New Zealand in the near future. He still seems intent of costing us a small fortune in interest and refusing to let us get ahead financially.
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Exodus Gym – it’s a bit big.
Filed under: Cost of living, General Budgeting, Life in New Zealand, Things to do
One of the big problems I faced when we first arrived in Wellington as new ex-pats was trying to find a gym I felt comfortable in. We had both been members of a lovely health club at Fownhope in the UK – Wye Leisure, which a great gym, 2 pools, 2 saunas and 2 steam rooms. Just as we were leaving, they were renovating and expanding – and on a trip back to the UK – I was left drooling at the additions of another pool, sauna and steam room. One of the things we really loved about the place, was that you could do your workout and then you could have a nice relaxing swim, soothe your muscles in the sauna, and then collapse on the loungers around the pool and order some coffee. It was a good life.
Ideally, we were looking for something similar, because I really did become something of a gym-rat, but what kept me going was that relaxing bit at the end.
The problem was that in Wellington we couldn’t find the kind of Health Club style gym we wanted. We only found 2 gyms with a pool: Habit on Willis Street (but the pool as bit grotty and you sure as hell ain’t gonna relax next to it), and the Freyberg Pool owned by the council – but really didn’t want a huge families pool.
And the gym situation wasn’t that great for us either – the main ones were a chain called Les Mills – of which there are 2 in wellington and more around the country. They were TOO big and noisy. There was a Women Only Gym – but that doesn’t work as we both work out, and none of the smaller gyms grabbed me. Most of all – I was put off by the cost! We were paying £75 a month for a joint membership at Fownhope – New Zealand gyms were wanting about $35 a week. Each. (£120 using 2.5$:£1). And we weren’t getting as much for our money. I kinda objected to that.
So over the years we have collected some extra gym equipment (I already had some) was tried to work out at home – with very limited success.
Now we are living in the city, and the plan was to work out in the apartment’s onsite gym. But as that’s not being maintained – that didn’t really work out. The equipment is old, broken and filthy, and the pool is out of action.
But just up the road – about 5 mins slow walk – is the Exodus Gym. They were building it when we first moved here, but we were moving out to the country. And besides – still no pool. (They did tell me at the time that the problem they had with this was the council wont give planning consent for gyms to have pools cos they want to force you to use theirs!) But needs must when the pounds just keep clobbering you and you need to either deal with it or buy a whole new set of clothes (having got rid of all the “fat clothes” – I refuse to buy another set!) So off we went for a look round.
Which brings me to the headline – it’s a bit big! To be fair – the Les Mill’s Gym on Taranaki street is bigger, but exodus is not bad in terms of size. Theres 2 floors – the lower one being mainly Cardio equipment with a set of weights machines, and the upper floor being mainly the body building floor with a few Cardio machines.
While they do have a Sauna and steam room, they are in the changing rooms, so again, not somewhere I can relax with hubby after a killer workout (and our workouts are deadly!), but then with no pool anyway, we just go in, do the workout, then go home to shower and have a slap up breakfast.
You are still looking at about $35 a week each – there doesn’t seem to be any such thing here as a Joint Membership, but they do have corporate deals – so you may be able to get a cheaper deal depending on who you work for. Telecom for example!
By the way – if anyone is in Wellington and wants to try it out – I have some One-Day free passes which I’m happy to send you. Email me at avalon@avalonsguide.com with your address and I’ll send you one.
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Should you be forced to save?
Filed under: Banks, Cost of living, Economics, Property & General Investing, Retirement, Pensions and Kiwisaver
Forced savings – in the form of compulsory superannuation (or – shudders – compulsory Kiwisaver) is back on the agenda in new Zealand. Because apparently, not enough of us are doing as we are told and opening up Kiwisaver accounts. So we need to be made to do it.
This comes out of the Tax Working Group, now we have to pay some more academics to sit around and tell us how we need to save for retirement and how we need to do it. I hope they get different people from the ones that just beat the living crap out of any Kiwi that was using Property to try and fund their retirement. Apparently that doesn’t count as retirement planning, cos it’s not shares or managed funds.
So when they talk about “Forced Savings” just be aware that what they really mean is “Forced Stock Market Investments”.
I’m not impressed – if you couldn’t tell. 
I personally believe that forcing people in a low wage economy like this to give up at least 2% of their after tax salary is just not on. The “theory” is that if we all do this – then it will cause investment in businesses (through the sale of shares) to increase, and those businesses will then be able to pay the staff more.
Anyone actually think your wages are gonna go up?
Because heres the thing (speaking as a complete non-economist here of course):
Buying shares on the stock market does not actually put money into the business. It puts money into the pocket of the guy selling those shares. If that just happens to be the company floating shares – then yeah – you just invested money in that company. Otherwise, some guy on the street sold some shares and you bought them.
BTW, we recently found out that if you work for one of the banks, which just happens to be a “Default Provider” of Kiwisaver (where you money sits if you don’t bother to actively choose a fund), they take their “Employer contributions” out of you salary. So basically, they don’t actually contribute to their own staff’s Kiwisaver fund.
Why is this not illegal, and why is it still being allowed? And how the hell does such a company get to run a default fund???
So regretfully – still not a fan of Kiwisaver, and would still like the government to keep its grubby little paws of my money thank you very much!
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Is Income Splitting coming to New Zealand?
Filed under: Cost of living, Economics, Retirement, Pensions and Kiwisaver
It seems that a bill has been selecting for reading in Parliament which would allow single wage families to split that income and therefore pay less tax. Note the word families. Apparently me and hubby do not “count” as a family because we don’t have children. And Peter Dunne – “party leader” of United Future ( party of 1 MP – but hey – he gets a Party Leaders expense allowance and salary!) believes that you are only a family if you have Children.
Git.
I quite liked the sound of Income Splitting, until it was linked to ability to have children. (And is anyone else slightly confused that on the one hand we have Politicians saying you can only have more tax cuts if you have children at the same time we are threatening to throw someone out of the country for being pregnant???)
I personally don’t think this will go anywhere, because it does advantage those on higher incomes, and thats almost always seen as a bad thing for anyone except those on the high incomes. And besides – we have already had a raft of tax cuts, and as far as I’m aware the NZ government is still saying that tax cuts have to be paid for by equal tax increases.
But doesn’t income splitting already exist in New Zealand?
You may hear this from some people – we certainly did. Over and Over again. But it actually doesn’t. In order for one single income to be diverted to more than the person who actually did the work to earn it – you have to jump through a whole load of legal and accounting hoops to keep on the right side of the Tax Man. And you need to be self-employed. And thats always the side of the Tax Man you want to be on.
Theoretically, some of Hubbies contracting income could be diverted to me, and therefore he would earn less and pay less tax. But, its not that simple: because he does the work that brings in the money, he has to earn the bulk of that income in his own name, otherwise we are using tax rules to avoid paying tax, which isn’t legal.
So if I was to take some of that contracting income, as a wage for myself, then the amount I get has to reflect the contribution I make to earning that income. As my contribution is running this blog – which doesn’t make us any money- and doing the paperwork for the business, which doesn’t earn any income but is a necessary job, I can hardly “earn” the same amount as Hubby, and thus split the income down the middle.
So bringing in a bill to allow Income Splitting on the whole sounds like a good plan. I’m all for less taxes and I think its about time that people should be able to access the same tax cutting measures as employees that the self- employed can. I just think its wrong to link tax to ability to have children.
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Grabbed One.
Filed under: Avalon's Money Thread, Cost of living, General Budgeting
Theres a new (ish if you are in Auckland) money saving website thats come to New Zealand, and so far – looks good. Its called Grab One, and I found it via Facebook (fount of all things time wasting) via some friends.
So what’s the deal?
Well, you sign up to Grab One, and then when they have a deal – you can choose to accept the deal if its something you like the look of. Now usually, theres going to be a minimum number of people required to sign up for the deal before it becomes “live”, but if you are one of those first people, you will need to give credit card details, and if the deal goes live, you will have bought the deal. After that, if there are still some places left on the deal, you can buy or not as suits you.
Is it worth it?
Well, today was the first day that Grab One had a deal in Wellington, so its the first time i got to try it out.
As we are intending to go to the cinema at least every other week, and as the Embassy Cinema is 5 minutes (slow) walk away – I though this was well worth a try. I mean $3 for a cinema ticket??? Even on Cheap Tuesdays its $10! The downside is that you can only buy one deal per person, but this did allow me to buy a second ticket as a gift – which I thought I had better send to hubby. So that’s 2 tickets to the Embassy for $6, saving us at least $14.
Now there are some conditions: you can’t use it Friday or Saturday evenings, you cant get Platinum seats at the embassy ( those are the bigger leather couch like seats) and you cant use them for deluxe seats at the Lower Hut Cinema (which have reclining backs). But all those conditions were clearly laid out – in normal sized print, and were really easy to understand – so top marks for not trying to hide anything.
So I guess if you can get money off something you were going to buy anyway – this looks absolutely brilliant. But as with all “money saving deals” it only actually saves you money of you were going to buy it anyway. If you start buying things just because they are on offer – then its actually not saving you money – its making you spend it.
How do you find out about the deals?
There are two ways: sign up for email alerts when there’s a deal in your area, or join the Facebook group and get the alerts as posts on your Facebook newsfeed.
This is currently running in Auckland, Wellington, Christchurch and Waikato Region, and looks like they are expanding across New Zealand.
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$5 for a coffee???
This morning started off really well. Last night I finally crashed my Evony (Free forever – don’t you believe it!) account which has been hugely addictive and disruptive. So for the first time in over 4 months this morning, I didn’t have to check on the game and the Alliance I was helping to run, (ANZACS) and could get on with the day with a fresh start.
So I had a lie in. With a cup of coffee. And that’s when the day went to custard.
At about 9.30 there was a loud banging on the door. Now we’ve had this before, and you can’t always tell if it’s our apartment or next door. SO I left it. Next think i know, the door is opening, and I can hear 2 men entering the apartment!
I yell out to them that I’m in Bed and could they please leave (or words to that effect), and had to yell 3 times. The request got less polite each time. They finally left, and I got up and threw some clothes on. Then stormed out and yelled at them – with a bit more confidence than is actually possible when you are hiding in bed with no clothes on hoping desperately that they won’t come in.
Seems they “Have Authority” to enter to do fire inspection, and they left notices in our boxes 3 days ago. Like I give a damn? This is a city pad – we don’t get post here, so we don’t check. Does this in anyway make it OK to scare the crap out of me and barge into my apartment without permission???
Hubby popped home (in less than 3 mins) and got them in to do the Inspection while I refused to deal with the twats. While neither of us wanted them to do it all – at least this way they won’t be able to scare the crap out of me again like that.
So that excitement being over – I decided “sod this – I’m going out for Breakfast”. I decided to pop to Brooklyn Bakery which is actually our closest cafe. Via Moore Wilsons to get some Sugar Free chocolate – because lets face it – you need Chocolate when 2 men have just tried to barge in while you’re in bed! Brooklyn have a sign outside saying Bacon and Eggs with coffee $9.50. So thats what I ordered. Except when it went through the Credit card machine- I was charged $17! Which obviously I queried. “That’s only till 10am” I’m told. The fact that the board is still outside and its 10.30 is lost on them – but I refuse to pay it and leave in disgust.
So now I’m left thinking – I have chocolate, I’m miffed, I’ve not had breakfast – and I need coffee. Moore Wilsons sell coffee, but they don’t have Decaff, and I’m already wound up enough without having a shot of caffeine. So I head to the Coffee Cart outside the Telecom office, which is opposite our apartment. Can’t go wrong I thought. It’s also an informal outside office for Telecom from the number of suited blokes hanging round the cart.
I ordered a large Decaff Americano – which is what I normally get. $5! Five Dollars!!! For a shot of espresso with water. There no milk used, so the increase in Price of dairy doesn’t affect it. I mean – it was a nice coffee – but not $5 nice when Starbucks charge $3.80 the the same amount of coffee.
So all in all, not a great morning, but I did get my coffee, ate some breakfast, and ate some chocolate as “pudding”. And next time – I need an emergency coffee – I’m walking the extra 3 minutes to Starbucks and saving $1.20!
I’m now calm.
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Would you pay $800 for a can of Coke?
I guess this might sound like a really daft question, becuase hopefully there is no one on the planet actually so careless with money that they would do such a thing. But it was a question that came to me after flying to Fiji.
You see, on our recent trip to the Gold Coast for hubby’s work – we flew economy class as usual, and both asked for Diet Cokes after our food (or what is termed food by airlines!). We got a small plastic cup half filled with our drink (to stop it spilling I presume), and Hubby was slightly miffed that we didn’t get a full can. Which at least we could have poured a little bit out of at a time – but at least we wouldn’t be rationed to 3 sips before having to ask for a refill (not that we got the chance!).
But lo! on my trip to Fiji I went Business Class! And no – I didn’t pay for it! This was on points from our previous trip to the UK. We bought Early Bird Tickets for Singapore Airlines – which came with enough bonus points to each get a Business Class flight to Fiji, Rarotonga or the Cook Islands. Worth looking for if you are flying back home anytime soon.
And yes – I did get a whole can of Diet Coke all to myself. In fact I had 2. Plus a glass of bubbly before the flight and a nice glass of wine with dinner. Not a bad start to the holiday.
The cost of that flight?
Well I picked 2 random dates in August on the Air New Zealand website and this is what I came up with:
- Return Cheapest Economy = $648
- Return Business Class = $1530
Which by my reckoning makes the cost of a can of Diet Coke on an Air New Zealand Flight to Fiji a remarkable $882.
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Still no Ikea in NZ, but…
Filed under: Cost of living, Getting to New Zealand, Life in New Zealand
straight from the Facebook Page “I want IKEA stores to open in New Zealand” comes a link for a new company in Parnell Auckland that is shipping IKEA products from Australia for you, MYKEA.
The Idea is that you visit the Australian IKEA website, fill in a form with MYKEA telling them what you want, and they send you a quote telling you how much it will cost to get it delivered to you, including all costs (taxes, shipping etc). You can then place the order or not. They have a minimum order of $150 AUD, and you cant any item less than $10 AUD, but all in all it looks like a good system to me.
Now you are going to pay a premium for this obviously – not only are you covering IKEA’s profit, but also MYKEA’s, but hey – nowt wrong with that. They are being enterprising, and offering a service that many NZ’ers really want. Good on ‘em. And lets face it – you can always judge for yourself whether the quoted prices suit your pocket, or are fair. Given the numbe rof people I’ve met taking flights to Aussie just to go get stuff from IKEA – I’d say they could be onto something in saving you money on airfairs and excess baggage fees!
Actually they aren’t the first to do this. When we first arrived 5 and a bit years ago, there was a company doing the same thing, and another company that was actually just importing container loads of stuff and selling it the old fashioned way. Both of those stopped trading – Ive no idea if it was because they went out of business or went on to do other things. But it does suggest that there may be a window here in which to make the most of this opportunity.
Depending on whether we make out “city living” arrangement permanent after a few months of trialling – I am sorely tempted to splurge (once we have cleared the credit cards!) and buy some decent storage! NZ is woefully short on decent affordable storage I’m afraid. And to be honest – when you have kit out a second home -you need access to something that isnt going to rob you blind on the costs. The nearest similar store to IKEA in NZ is Freedom Furniture – but its a lot more expensive. Arguably the quality is better, especially if you compare it with the cheaper IKEA ranges, but when the budget is what matters – there really isn’t a good alternative.
If you have IKEA bookshelves – or indeed IKEA anything - what ever you do – bring it with you! You will regret it if you don’t. Even if you don’t want to keep it – bring it and sell it on Trade Me.
By the way: apparently the reason we cant have an IKEA store in NZ is becuase teh Auckland council reckons they cant cope with the traffic chaos that will inevitably ensue when 4,000,000 kiwis descend the place. Sheesh.
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Our First “weekend in the Wairarapa”.
Filed under: Beaches in New Zealand, Cost of living, Life in New Zealand
Well, this is it – we are now officially City Dwellers, having taken our first Saturday morning (well, afternoon actually) jaunt out of town for the weekend. So this is how it went.
Friday Night:
We decide at 8.40 pm to go to the 9pm showing of Eclipse at the Reading cinema, and are sat in there by 8.55 with coffee and Diet Cokes. No “ah yes but it’ll take us 90 minutes to drive, 10 minutes to park, then we have to come back home”.
Saturday Morning.
Wake up at 9.30.
Realise we don’t have any eggs for breakfast, so rather than nip across the road to Moore Wilsons, decide that we will use our “eat out” budget to spring for bacon and eggs at Mr Bun’s. (Cheap and cheerful). Throw a few things in a suitcase, and pop off for breakfast.
Finish breakfast at 10.30, head back to the flat and work out how to fit a suitcase, two laptop bags and a handbag in a tiny car. Thankfully, because I couldn’t be bothered to get eggs from MW, I also didn’t pick up a 5.5kg frozen turkey that I was planning on buying to stick in the big chest freezer ready for Christmas.
Leave at about 11.30, feeling that possibly we haven’t really got this who “weekend” concept quite right. We are heading for something more like “Afternooners” or “4pm-ers” at this rate.
We finally made it back home by 1.30pm, and only that by not stopping in Greytown with the other hoards from the city for lunch. Passed a few other convertibles there I can tell you!
So here we are – in the peace and quiet. Not having to listen to the bars and clubs over the weekend. Getting our fix of open countryside and greenery.
Possibly off to the beach tomorrow!
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The problem with buying Leasehold properties
Leasehold properties are cheaper than Freehold properties – which makes them look like a bargain. (Well sometimes – you can see leasehold properties for sale at freehold prices!) But theres a reason for that – you don’t own the land – you just own the building on it. Someone else owns the land, and charges you rent for the privilege of owning the house on it.
Like Hawkes Bay Regional Council, whose leases are coming up for renewal, and so they have hiked the prices up.
One week Niki Willis was paying $27 a week ground rent on her leasehold home in Napier, the next she was paying $172.
Now that’s one helluva hike in your weekly budget. And bear in mind this is on top of any mortgage your may have to pay.
The council, which owns about 1000 residential leasehold properties in Napier with a total book value of $85 million, realises many leaseholders are finding themselves in impossible situations when their ground rent is reviewed at the end of the 21-year term
Thats the bit to be aware of: how long is your lease for, and when are the rent reviews allowed. 999 years with no rent review till the end – possibly worth thinking about, but a rent review every four or five years and you could be in serious trouble.
And the worst thing is: not many people are willing to buy leasehold land. I know I wont touch it with a bargepole – so straight away you cot your chances of selling for a good price. Hey – thats why its cheap if you want to buy it yourself.
Many of the new apartments going up in Wellington along the waterfront are Leasehold.
Added to this in New Zealand is that some of the leases are owned by Maori Iwi and you could possibly have issues with any claims under the Waitangi Agreement. SO if you are thinking of buying Leasehold, especially in New Zealand – please take care. Make sure a lawyer goes through all the ups and downs with a fine toothed comb – then at least you fully know what you are taking on.
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