Reserve bank warns of potentially stressful impact of potential interest rate spikes

Record low interest rates have been helping many first home buyers claw their way onto the property ladder, but mortgage rates aren't expected to stay low forever.

Mortgage analyst Jose George told 1 NEWS "The interest rate environment is that has been around for the last few years is definitely turning.

"I believe first home-buyers will be vulnerable to managing their budget."

The government is also concerned and have been asking the Reserve Bank just how borrowers will cope when the rates rise.

A Reserve Bank email to the government in January warned that if rates were to rise to 7.5 per cent a typical first home buyer in Auckland could be spending around 70 per cent of their income on housing costs.

While the percentage for first home buyer's outside Auckland would be around 50 per cent.

Greens co-leader Metiria Turei said "It's a real concern, the Reserve Bank is very worried about these first home buyers buying into the market because they are concerned about house prices growing, and the high levels of debt.

"The Reserve Bank is also saying it could mean families have to cut back on essentials like food and power."

Finance Minister Steven Joyce told 1 NEWS, although he expects rates to increase, he doesn't predict it will get to those levels.

The Reserve Bank meets on Thursday to consider its official cash rate.

While a hike isn't likely this week, economists believe a rate rise is definitely on the way.

As the Reserve bank warns of rising mortgage rates could see Auckland home buyers spend 70 per cent of income on housing costs. Source: 1 NEWS



Child in critical condition after non-fatal drowning incident near Taupo

A child is in a critical condition in hospital after a non-fatal drowning incident near Taupo today.

Police have confirmed to 1 NEWS the child has been taken to Rotorua Hospital after the incident at a private address in Broadlands.

Emergency services were called to the scene at about 6pm.

St John Ambulance (file picture).
St John Ambulance (file picture). Source: St John.

TODAY'S
TOP STORIES

Jacinda Ardern speaks at launch of Stardust and Substance book chronicling her rise to power

Jacinda Ardern spoke at the launch of the book Stardust and Substance: The New Zealand General Election of 2017 in Wellington this evening.

The new book, edited by Stephen Levine, "captures some of the magic of Jacinda Ardern's extraordinary seven-and-a-half weeks' campaign, defeating a National Party government in power for nine years."

Ms Ardern read some passages from the book and recalled memories from the "extraordinary and interesting" period in her life.

A lot of the General Election was a "blur" for the Prime Minister who says the book serves as a good artifact to refer to.

The book is already out of stock on the Victoria University Press website, the publishers of the book.

The Prime Minister says the book covers an "extraordinary and interesting" period in her life. Source: 1 NEWS

TODAY'S
FEATURED STORIES

Volunteers hit Auckland streets to conduct city's first official homeless count

Auckland is gearing up to count its homeless population for the first time.

Tonight, hundreds of volunteers will walk the city's streets to find those who are living without permanent shelter in an attempt to resource the problem.

"We need to know why people are out on the street and what the nature of those people are. Once we've got that information then we can make steps towards solving the problem," Auckland Mayor Phil Goff told 1 NEWS.

Doctor Kate Amore from Otago University has been looking at homelessness for two decades.

She says while the census gives a snapshot of the problem many people don't get counted.

"We know the main cause is the mis-match between affordability and people's income. We know if there was a plentiful supply of affordable housing we wouldn't have a homeless problem," Dr Amore says.

Her research shows half of those who are homeless are under the age of 25.

"Half of homeless adults are working studying or both and I think it used to be in the old days the stereotype of a homeless person was an alcoholic middle-aged man on the street.

"But I think in the last few years that picture has definitely changed in New Zealand," Dr Amore says.

The Government's Housing First programme has funding to take almost 600 people off the streets in Auckland including children.

Those sleeping rough in the city tonight can expect to have some visitors drop by. Source: 1 NEWS


'PC gone mad' say teachers not allowed to restrain troubled, violent students

It’s "PC gone mad" - that’s the claim from teachers who say they’re unable to deal with troubled and violent students under current child restraint rules.

The guidelines were introduced last year to provide more clarity to schools after seclusion rooms were banned.

Physical force can be used if there’s a serious and imminent risk to safety, like a child attacking someone. But teachers say there are other times they need to intervene and the rules don’t allow it.

Pat Newman, Hora Hora school principal and Te Tai Tokerau Principals Association President, says children have thrown tantrums and started ripping items of walls.

"One school reports about how a boy urinates in the classroom in front of all the kids because he’s annoyed," Mr Newman says. 

But he says teachers can’t use any force to remove the disruptive child and instead the other, "well-behaved" children have to leave.

"This is PC gone mad - it's absolute coo-coo land," he says.

A  teacher from Auckland's Western Springs College teacher, Melanie Webber, says it's a tough to know when you can act.

"Should I step in or could I be potentially facing charges for this? Losing my registration, losing my job, because I was wanting to keep people safe," she says.

The restraint guidelines clearly state teachers should avoid restraining a child when they are disrupting the classroom, using verbal threats, trying to leave the classroom or school without permission, and damaging or removing property.

"An example would be, say a student picks up my laptop and starts walking out of the room with it, if I stand in the doorway and say no you're not allowed to leave, that breaches the Education Act as it stands," Ms Webber says.

Another teacher, Judith Nel, who works with children with high needs, says restraint is sometimes necessary.

"If you don’t, then all the other children in that classroom are traumatised, and that’s what we’re forgetting," she says.

The Education Ministry says the guidelines do need to be clearer. It met with an Advisory Group last week and it says it "will continue to work with the Advisory Group with the intention of providing advice to the Minister on any updates to the guidelines by the end of the year."

The guidelines were introduced last year to provide more clarity to schools after seclusion rooms were banned. Source: 1 NEWS