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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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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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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Me and the MX5: The Finale
Filed under: Cost of living, General Budgeting, Life in New Zealand
Well, let’s just say at this point that Motors: Mazda: MX5 has been listed as a favorite on my Trade Me account as long as I have had a Trade Me account. This is basically becuase when I first started getting into Property Investing, I happened to pass by the Mazda garage in Wellington (as you do – honestly its on the route to Moore Wilsons). And I thought I would pop in to look at what they had in the showroom – so that I could build a “Vision Board” of where I wanted the investing to take us.
And lo: they had this really swanky new Dark Purple (so dark its almost black), shiny MX5 that was just screaming at me to buy it.
I was in Wuv.
Slight sticking point – it was $50,000.
And it was brand new – which means as soon as you drive it out the dealership its worth a lot less than you paid for it. Not great odds for anyone planning on making squillions in the property game. Besides – didn’t have $50,000 sitting around burning a hole in my pocket. But dammit – thats the car I wanted, so it went on the dream board, and I have been keeping an eye out on Trade me for 2nd hand ones. One came up a while back, but still with a price tag of $35,000 which is still too much for me.
Ho Hum. Of course now that I need to buy a new car, the swanky purple one isn’t available – at any price, but I have been watching and planning. I was hoping to be able to spend about $20,000 but in the end the pennies just weren’t there. So I decided to buy a cheaper version – and I can always spray it when I have some more money.
2nd hand MX5′s can be had for between $3,000 and $45,000 – so I thought I’d better be at the lower end. I test drove a few in the 8-10k range, but in the end decided I wanted an Automatic. Basically because most cars over here are automatics, all ours were, and I’ve just got used to them. Besides – my original 2 MX5′s were as well.
On Friday last week, I called a guy in Levin who was selling an 1999 MX5, automatic, British racing green (no pop up headlights). Asking price $7995. A quick price check said that was very reasonable – I looked at one a year older for $11K, and one a year younger at $14k. We drove over to take it for a spin, and I loved it! It was in good nick (needs a good clean inside), but the roof is sound, it drove well and everything worked. Experience says theres not likely to be a huge amount that needs fixing – they are not cars that are run by complicated computers so they tend not to be expensive to fix. And the big expense which was a new Cam Belt had already been done and there was a service bill to show it.
All it took was a call to the bank manager, who had been warned this might be coming, and she put the payment through straight away. The guy was comfortable enough from talking to me to let me take the car straight away, and within 10 minutes I finally had my long sought after dream: an MX5.
We then drove a little north to Foxton Beach, grabbed fish and chips from Mr Grumpy’s and coffee from the Simply Balmy Cafe and had a late lunch at the beach sitting in my new car with the hood down. I couldn’t stop grinning.
In fact – I still haven’t stopped grinning every time i get in the car.
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Me and the MX5: part3
Filed under: Cost of living, General Budgeting, Life in New Zealand
Well, we managed with one car for the first year, sharing it between myself and hubby, mum and dad. The fact that we managed that long without a car each and 3 spares was a minor miracle. Never before has my family coped with so little vehicular choice.
Being countryside dwellers for so long – we are into the habit of having to get around under our own steam. Theres kinda point relying on public transport when theres only one buss a week into town, and the train station is 10 miles away. Its no different here in NZ – public transport doesn’t start till you get to Carterton, and thats 15kms away.
But when mum and dad came back for there second 6 month stay they decided to go buy themselves a car. They went out one day – and came back with an old Jag XJ6 – basically a Tank with bigger comfier seats and a fuel consumption to match. Cheap to buy – small mortgage needed to fill up at the pump.
So we managed for a few years like this, then when they came to stay full time, my brother also bought a car, as he was now going to be living separately from the rest of us, and needed to be able to get about.
It was at this point that I made the comment over of coffee or two that if there were any more cars to be bought by this family – it was damn well going to be mine. Any deviation from this plan would be met with a major Grumpage alert.
At which point the Jag decided to die on us having failed its WoF and being about to cost considerably more to repair than was spent buying it. This was a few weeks ago. So I jumped and suggested that maybe now was the time for me to replace my MX5.
Obviously there are a lot of changes to our lives right now, with Hubby changing jobs and us moving into the city. So I figured that we could use a small car, and mum and dad could keep our big, fast, blacked out car with the big boot. Much more useful for the country life, and lets face it – a small car in the city is much easier to park.
Only problem was – how the hell do we buy a new car when we have little money and a credit card bill we cant pay in full?
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Briscoes: You’ll never buy better?
Filed under: Avalon's Money Thread, Cost of living, General Budgeting
It’s a really annoying jingle and an even more annoying tagline – more so becuase it’s highly dishonest. Briscoes is a chain of homeware stores across New Zealand known for its permanent sales (advertised as “get in quick – 2 days sale”).
The thing with Briscoes is that from what I have seen – the sale price actually brings it in line with the retail price in most stores. We found this when I bought a coffee machine. They had it “on sale” for $499 down from a supposed RRP of $899. Except when i was doing my price checks, I couldnt find any other store that sold it for for more than $499. We ended up buying it at Moore Wilsons.
We have done the same price checks today, and out of 10 separate items, only one of them came out cheaper at Briscoes – a Tefal frying pan which would normally have been the same price as in Moore Wilsons, but had 40% off in Brisoces, and this time Briscoes weren’t exaggerating the price before discounting.
Just be aware of this kind of thing. I have found time and again that “sales” “bulk buys” and “special prices” of all descriptions are a con over here. Why the commerce commission allows it I have no idea – but it really will pay you to check your prices before buying.
Today we saved about $50 on three items where there was a cost difference, and will save another $150 on a few items that I know are cheaper in Wellington stores. Its a start.
Unfortunately I cant actually spend that on coffee!
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Arghhh – having to pay interest on the credit card!
Filed under: Avalon's Money Thread, Cost of living, Interest Rates, Credit Cards & Mortgages in NZ
Well, for the first time in five and half years – I cannot pay off the whole balance on our credit cards, and we will be paying interest.
This is quite depressing.
I guess I should be happy that its only likely to be a few months where we have to pay, and that we have been able to organise our finances so well for so long that we haven’t had to do this thus far while we have lived in New Zealand. But still – its damned annoying.
Especially since the interest rate is a whopping 19.95%
So – from here on in – hard nosed budgeting and spending restrictions to get us back on track as fast as possible.
Why has this happened?
Some really big bills I’m afraid. Despite the emergency fund, which I still have some left of, we have had some really big expenses come through and no income. The emergency fund is coving our living expenses and top ups on the rentals, but it cant cover:
- Some large medical bills.
- Set up costs for Hubby’s contracting business.
- Legal fees
- Buying furniture for an apartment in the city. (and yes – even though we have 2 houses worth of furniture – it still turns out we need a few things – that was a depressing moment!)
Hubby has income coming in now, but almost all of it is paying the setup costs: new computer, travel, phones, internet bills, city pad – it all adds up.
And at least this time I actually know what I’m doing. I know how to work through the budgets, I know how to cut costs, and I know how to stick to the harder decisions. One thing I am sure of – that debt is not going to be there long. Ill be paying money into it as soon and as often as I can.
I’m just not sure how to cut my coffee budget
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Taking IBM to Employment Court
We’ve written previously about IBM redundancies and how they completely ignored what should be done in NZ.
‘cos it’s just business.
And also about how they refused to attend mediation
Since they’re a really big company and they were just doing business.
After a lot of dragging of feet on IBM’s part, and refusal to acknowledge anything was up
It’s all just business don’t I know?
We’re off to the Mediation (finally) this week.
You see, the ERA (Employment relations Authority) has the power to force parties to attend mediation. While this can’t of course ensure that a mutually satisfactory agreement is reached, it’s the first step in formal court proceedings. If we can’t agree on anything, then it’s off to court we go and everything suddenly becomes a matter of public record.
My job can sometimes be a little strange. Investigating what has happened to the IT systems of a company, spending weeks justifying why we need to invest some small amount of money on something to stop some people doing something we don’t want them too. [sorry for the very non-specifics, just best I don't use an example]
Until you find the right person in the organisation, whose job it is is to keep the Minister/General Manager/CEO ‘s name off the front page of the DomPost for anything other than good reasons.
This is often the acid test. Will what I’m doing keep the organisation off the radar of a bored journalist with nothing other than sifting through boxes of credit card receipts to occupy their time? [although I applaud the UK & NZ newspapers that have kept at this particular story, irrespective of debates about the journalists motivations. They are holding our elected representatives to account when those representatives seemed to feel they were beyond account. And after all, it's just business for the newspapers.]
And so with IBM, the mediation isn’t about right or wrong, it’s an acid test.
We have a strong case. Plus a very good lawyer, who spends a lot of time arguing for the Employer’s side so he knows what it’ll look like from the other end.
It’s the first major step in holding IBM to account for how it’s messed about with people’s lives.
Apparently dealing with the occasional employment relations matter is just a cost of doing business for IBM NZ.
As a current customer, a former employee, an existing shareholder – I personally believe there is a better way of doing business. I’m a bit funny like that sometimes.
[Added by Avalon: The budgeting has come in handy - we have managed OK this far on our savings. But although Hubby has plenty of work, there are long delays in getting paid for it, on top of having expenses in setting up a new consulting business. This is not an easy process to go through, and i personally have nothing but contempt for IBM in refusing twice to go to mediation, costing us lawyers fees and making the stress a whole lot worse. They are acting like bullies - which is par for the course in the NZ / Aus company. They have tried to force us to back down, and we have refused to be bullied. I hope one day theres a new management in New Zealand who actually run the company properly, not based on their silly personal insecurities over staff who get paid more than them.
If we settle on Wednesday, it is unlikely that we will be able to tell you how much for im afraid, but we should be able to tell you whether we settled or will be going to court. Court will cost us a fair bit of money, and theres no guarantee we would win, even with a strong case. But we will do that if IBM continue ride roughshod over us and the law. There have been a few recent cases in the papers with similar issues to Hubby's that won, so we have case law behind us.]
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