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The parent commenter said "(real, unadjusted) inflation". The inflation rate published by the Reserve Bank is calculated for everyday items as used by some demo

by vorg 10y ago

The parent commenter said "(real, unadjusted) inflation". The inflation rate published by the Reserve Bank is calculated for everyday items as used by some demographic, but excludes the rising price of assets such as houses themselves, or the health costs of the aged demographic. If you treat the rental and purchase price of houses to be part of the real inflation rate (because they are compulsory costs for people living in Auckland) and appropriately weight them in the basket of items considered, then the real year-on-year inflation rate is far higher than the Reserve Bank's interest rate, causing even more locals to borrow money for more houses.

lostlogin 10y ago
Would it? If we are using that inflation rate then we should compare it to the interest rates you can actually get - around 5-6%. This article puts inflation including housing at around 2.5% late last year (half the 5% interest rate you can get). I know we have had steep housing cost rises lately, but they aren't rising right now. I can't see how that was calculated though and it seems lower than I'd expect. http://www.radionz.co.nz/news/national/311147/call-for-inflation-overhaul-to-include-house-prices http://www.radionz.co.nz/news/national/311147/call-for-infla...
- mistermann 10y ago
  I'm sorry but when housing expenses are typically 30%++ of the typical citizens expenses, and housing is rising at 10% to 30% per year, year after year, you absolutely should not trust anyone who says that inflation is 1% or even 2.5% (this fellow is just being extremely conservative I presume). That's one way of looking at it. Another way is.....we can argue about what the specific numbers are, but leaving that aside, there is very obviously a major, major problem with housing costs in many countries in the world, Canada being one of the very worst affected. But in the realm of political discussion, it is almost never mentioned, and when it does come up, almost all politicians "poo poo" the idea as if it's some crackpot conspiracy theory, and if you won't shut up about it, they then resort to calling you a racist, which in Vancouver was almost a foolproof technique for suppressing discussion, until it finally got so bad that even that stopped working, but even then almost no politicians would acknowledge the elephant in the room. It feels like a complete conspiracy. Could the explanation be as simple that all politicians own real estate, so it is in their best interests to blow the bubble as big as possible? As silly as that sounds, the numbers are literally so big that's is nearly the equivalent of winning a small lottery...and knowing human nature, how many people wouldn't compromise their principles just a little to guarantee win the lottery?

by vorg 10y ago

lostlogin 10y ago

Would it? If we are using that inflation rate then we should compare it to the interest rates you can actually get - around 5-6%. This article puts inflation including housing at around 2.5% late last year (half the 5% interest rate you can get). I know we have had steep housing cost rises lately, but they aren't rising right now. I can't see how that was calculated though and it seems lower than I'd expect. http://www.radionz.co.nz/news/national/311147/call-for-inflation-overhaul-to-include-house-prices http://www.radionz.co.nz/news/national/311147/call-for-infla...

mistermann 10y ago
I'm sorry but when housing expenses are typically 30%++ of the typical citizens expenses, and housing is rising at 10% to 30% per year, year after year, you absolutely should not trust anyone who says that inflation is 1% or even 2.5% (this fellow is just being extremely conservative I presume). That's one way of looking at it. Another way is.....we can argue about what the specific numbers are, but leaving that aside, there is very obviously a major, major problem with housing costs in many countries in the world, Canada being one of the very worst affected. But in the realm of political discussion, it is almost never mentioned, and when it does come up, almost all politicians "poo poo" the idea as if it's some crackpot conspiracy theory, and if you won't shut up about it, they then resort to calling you a racist, which in Vancouver was almost a foolproof technique for suppressing discussion, until it finally got so bad that even that stopped working, but even then almost no politicians would acknowledge the elephant in the room. It feels like a complete conspiracy. Could the explanation be as simple that all politicians own real estate, so it is in their best interests to blow the bubble as big as possible? As silly as that sounds, the numbers are literally so big that's is nearly the equivalent of winning a small lottery...and knowing human nature, how many people wouldn't compromise their principles just a little to guarantee win the lottery?