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Average home prices in New Zealand reaches 8.8 times average household income

businessdesk.co.nz

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Re: Average home prices in New Zealand reaches 8.8 times average household income

#41

Post by cianmm »

matsemann wrote: post #34

How have other countries dealt with that? In Norway, the cap you can borrow is 5x your income. This cap is total of all loans (student loans, mortgages, limit on your credit cards etc) Not sure of the effect, but perhaps it has cooled it somewhat You notice certain "bands" on apartment prices. An apartment for a single person is capped at ~5x what a single person makes, then there is a gap until the next band etc. On…

In Ireland we've got a cap of 3.5X income (which banks can sometimes stretch to 4.5 income but it's pretty difficult to do due to government limitations) and that hasn't seemed to have helped house prices much (although it was iirc more to stop a housing bubble and crash rather than to keep house prices down). It's just meant that it's easier for investment firms and cash-buyers to outbid everybody else.

Re: Average home prices in New Zealand reaches 8.8 times average household income

#44

Post by bennyp101 »

_pdp_ wrote: post #32
NiekvdMaas wrote: post #11

Compared to some other countries: The Netherlands: €31.5k average household income, average house price €387k - so 12.3x. UK: £31.4k average household income, average house price £274k - so 8.7x.

The average house price in south east in UK is about 500K and the average salary in the same region is about 30K. This is more like ~17x.

Yea here in the SE prices have gone crazy the last couple of years, we're pretty much priced out of our local village now - if we hadn't bought 4 years ago, no way we would be able to now.

Re: Average home prices in New Zealand reaches 8.8 times average household income

#46

Post by Markoff »

Manheim wrote: post #39

In Norway the median income is NOK 550 920,- and the average income is NOK 609 480,-. The average price for a home is NOK 4 483 328,-. So respectively 8,1 and 7,3 times.

Are you quoting average income per capita or household?

Re: Average home prices in New Zealand reaches 8.8 times average household income

#47

Post by zer0tonin »

jusssi wrote: post #27
muchtest wrote: post #6

It annoys me when they compare countries and don't consider income tax - you don't pay with pre tax income... If you earn 150k in High Tax Euro Country you're losing 50% of that. In low tax US state you're closer to 33%. Thats the difference between 75k and 100k.

Most Euro countries have capital gains tax rate that's mostly flat and significantly under 50%. By the time the progressive income tax rate starts to exceed the near-flat capital gains tax rate, people start finding ways of converting their income to capital gains.

Not many people can actually do that no

Re: Average home prices in New Zealand reaches 8.8 times average household income

#48

Post by berkut »

mpol wrote: post #37
xupybd wrote: post #14

I live in NZ and my home has more than doubled in value over the last 5 years. The rapid increase in prices is scary.

Can you explain what the cause of this sharp rise is? The linked article has nothing on that. It even feels a bit alarming without much depth. And is anything being done? In the Netherlands, many investors, big and small, are buying up houses to rent out. Airbnb renting was a part of this as well. Many local governments are now creating rules, like, you have to live in the house when you buy it. Also, some taxes for…

A lot of demand for housing (both to buy and rent), and in my experience (live in Wellington) a lot of the newer apartments being built seem very much architected with buy to let in mind, so I think renting is a large part of it, along with limited supply.

The government did tighten the rules a bit several years ago so that effectively (there are ways around it), you needed to be a resident to buy property, but I don't think that had that much impact (although maybe it would be even worse if that wasn't done?)

Re: Average home prices in New Zealand reaches 8.8 times average household income

#49

Post by math-dev »

supernova87a wrote: post #28

Here is something I would like to get opinions on -- whether this is a valid historical viewpoint. Talking very macro here. We (the world) have spent the last 80 years in a period of relative prosperity, peace, and general building up of countries' (and people's) wealth and productivity. Currencies -- stores of value -- have not defaulted generally, and as everyone engaged in producing more over the last decades (rea…

No I think this may be off base (but appreciate your original viewpoint) but also correct.

I think for luxury goods like artwork boats etc what you say is correct, but what I think doesn’t work is property prices. There’s no reason for the majority of the world to be struggling with rent given all the advancements in the world. it is human generated scarcity that doesn’t make no sense except to existing capital owners taking advantage of the rest

Re: Average home prices in New Zealand reaches 8.8 times average household income

#50

Post by nikanj »

mpol wrote: post #37
xupybd wrote: post #14

I live in NZ and my home has more than doubled in value over the last 5 years. The rapid increase in prices is scary.

Can you explain what the cause of this sharp rise is? The linked article has nothing on that. It even feels a bit alarming without much depth. And is anything being done? In the Netherlands, many investors, big and small, are buying up houses to rent out. Airbnb renting was a part of this as well. Many local governments are now creating rules, like, you have to live in the house when you buy it. Also, some taxes for…

New Zealand has built more rules. Maybe they should have built more homes instead.
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