In Australia at least… the reserve bank is separate from the elected government and is filled with educated industry experts.
UK and US I’d presume have similar systems.
Then why didn’t they advise the previous government to not burn money? And why did they wait until during the election to increase interest rates?
And as for educated then why are they continuing to increase interest rates at the detriment of the rest of the economy?
Remember the reserve bank Governor, Philip Lowe, was the same person that said he didn’t see any need for interest rates to rise for the until 2024.
And if you look at interviews with him he basically spouts the same language that the Australian conservatives in the Liberal party espouse.
The last time Australia went through rapid increases in interest rates was in 2008 as a response to the GFC. Most decent economists say the same thing. They went too hard too fast and caused considerable damage to the Australian economy as a result. That was also after an ALP government had been elected.
Your argument that the reserve bank board are independent is about as credible as Australias ABC being balanced. After almost a decade of cuts and the stacking of the board there is little semblance of balance in the national broadcaster anymore.
Not to defend bad decision making but at that time the data was very different and there is a lag in ABS data in Australia. You have to go off the data, not gut feelings.
Not to blame the ABS but the ABS needs to devise a better and more efficient way to measure inflation. Also maybe the RBA could also have their own way too that is independent of the ABS so as to eliminate the blame.
2008 was a fight against the fiscal policy implemented by the government. In fact… the government was quite upset by the banks actions… But again, it is independent and there is little control over it (other than appointing directors of it)
There were many people already making the case that the then monetary policy would lead to inflationary pressure. The Ukraine/Russia crisis only added to these pressures through rapid increases in transportation costs.
In 2008 there were major concerns over how the retail banks were sourcing their loans. Nothing has been done to alleviate those concerns.
Yes the RBA does need a new approach rather than the blunt hammer of interest rate rises. Interest rate rises only affect those at the bottom. Does nothing for those that already own. And businesses claim their interest against the taxes they were meant to pay while using the rate increases as an excuse to push prices up (also see residential property investors in that group although they aren’t looking to profit through positive gearing but reduce their taxes through recording a transactional loss designed to reduce their tax obligations).
The again most countries need a new way of averaging wages as the current system is skewed too far by the relatively small number of people earning vast sums when compared to the relative majority that earn much much less.
Two reasons they keep interest rates low here.
- record low interest rates for years, when they start increasong the housing market will drop, defaults will creep up and that is very unpopular with rich and middle class alike
- the dinosaurs in govt will ultimately support big business over employees purchasing power, low interest rates keeps ntd devalued relative to USD
I don’t think it is more complicated than this.
What might force up rates are inflationary pressures, right now that has been constrained by govt energy subsidies.
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She has a stable government job and the banker probably gave her top rates. I guess she thought to buy a home whose mortgage matches her monthly salary. Unfortunately salaries in Taiwan haven’t risen, and a 1.3% to 1.5% mortgage rate is a 15% monthly premium increase, so 30k monthly premium now became 35k monthly premium and starting to become unaffordable.
You mean her mortgage payments are 100% of her income? How?
The other spouse work and labor to pay for the rest of the living expense.
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Maybe not match but close to. For example I’d guess she makes around 40k a month and got a mortgage at around 30k a month, and was hoping her salary increase would keep up with any mortgage rate increases.
I read once about a woman who got on Tinder just so she’d get free dinner. For example.
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That’s insane. Mind bogglingly stupid.
I am now gonna huff bleach to try to erase what I just heard.
I dont think she put 100% of her salry into the aprtment, that is not likely. Probably there is a husband that covers the other expenses, or she lives with her parents without other expenses and the apartment was supposed to be an investment.
My parents did the same - both were working, 1 salary was earmarked to cover the mortgage and the other salary was for living expenses.
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I am not sure the math works this way, but it’s too early in the morning to be sure. Run it through a mortgage calculator, and I think you will see that a 0.2% rate hike will not cause a 15% increase in monthly payments. When I did it for a 300kusd home with 30 year fixed, t/e difference between 1.3% and 1.5% seemed much smaller.
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not the smartest approach, very dangerous and with a very likely choke point
What are mortgage rates today (3 months later)? Are these posted in the bank branches or online?
Here is the Loans webpage at E.Sun 玉山銀行 (esunbank.com.tw)
2023 Home Loan Comparison
https://www.money101.com.tw/貸款/房屋貸款
this site lists more banks, but you may need to read more chinese.
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For reference, here are the text messages with rate info for a flex rate mortgage I got from Bank of Taiwan
just to make it clear, the rate informed is a fixed rate for fixed term saving deposit. every rate is adjusted accordingly.
I keep reading online, at least in America it seems buying makes far more sense because say your rent is 1000 dollars a month but your mortgage is about 800 a month.
This isn’t true in Taiwan right? Seems mortgage is at least 3x rent for equivalent property and that’s after putting down 30% or more. According to the news houses here are so unaffordable that more houses are inherited than bought!
So what sense is there to buy here?
you’re not new here. Younger people are only able to buy if their elderly family members help them. They “have to” buy, because their mommies and daddies and grannies and grandpas all told them to. Their elderly family members already own multiple properties, many in the names of their children, bought years ago. Buying in a place like Taipei is stupid as heck right now — how many “new” builds (but actually 5-10 years old) only ever have the lobby lights on, but you never see any upper floors with lights on? I don’t have enough fingers and toes to count the residential buildings that were built at least five years ago that I pass daily that never ever have any lights on. Those builds are bought by all the older people who already own other property outright, investing in the pyramid scheme that is property investment in Taiwan. This bubble will burst. It might not burst for another 20 years, but it will burst. You can’t have a city with 20+% of residential spaces unoccupied and continue to see the prices rise the way they have been.
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