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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

#111

Post by [deleted] »

nikanj wrote: post #63
donmcronald wrote: post #16

So, if the average person can save 10% of their income, it takes 8.8 years to save a 10% down payment? Factor in tax and the time it takes to save a down payment is starting to look close to the time it took my parents’ generation to own a house free and clear.

This is assuming the priced don’t increase. In many places, the prices increase so fast your downpayment grows faster than your savings. Home value goes up 10%, from 1 million to 1.1 million, 20% downpayment goes up from $200k to $220k. If you’re saving under $1666 per mo, you’re actually further away than you were last year. In Vancouver, the average price is $1.36 million and it went up 21% in a year. For detached,…

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

#112

Post by sacrosancty »

jacquesm wrote: post #90
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.

What was the inflation rate over that period? Are house prices counted in the inflation?

There are multiple measure of inflation - housing, wages, food, etc. Housing inflation is the highest.

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

#113

Post by sgt »

mrep wrote: post #96
yardstick wrote: post #86

In NZ we have created a culture that obsesses with house prices. It's been this way since at least 2000, if not earlier. Many peoples retirements plans hinge on them being landlords or holding large amounts of property. The NZ share market is a joke. Pretty much any serious global company that started in NZ moves away from NZ without even entering our sharemarket. There are a few exceptions of course, but by and larg…

> Holding growth shares in US tech stocks will result in annual wealth taxes, even if you hold and never sell. Can you explain this more?

I wonder about this as well. Let's say Amazon did really well for 5 years and you paid significant wealth tax from these shares. Then Amazon plummets and you lose 50% and then you sell shares. Would the NZ government reimburse a part of the wealth taxes you already paid?

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

#114

Post by bluedays »

beardedetim wrote: post #64
edf13 wrote: post #35

Earlier quoted context omitted.

Most mortgages (At any reasonable %) will require more than 10% these days... you're looking at 20-25% in many cases.

In USA this isn't true. We bought a house using an FHA loan and put down less than 5% and our interest rate was lower than 3% if I remember correctly. Maybe not as reasonable as you are imagining but it was really low in our mind.

Same

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

#115

Post by sgt »

throwaway3b03 wrote: post #22
donmcronald wrote: post #16

So, if the average person can save 10% of their income, it takes 8.8 years to save a 10% down payment? Factor in tax and the time it takes to save a down payment is starting to look close to the time it took my parents’ generation to own a house free and clear.

> if the average person can save 10% of their income, it takes 8.8 years to save a 10% down payment Not according to this article, where it mentions the average household income, not the average per-capita income. So you can expect it to take quite a bit longer than that to save for that down-payment, for the average person.

Then the average person just needs to leverage some pre-existing wealth. Sell some property that you already have, make a decent profit! /s

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

#116

Post by refurb »

MisterBastahrd wrote: post #36
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.

It annoys me when people don't realize that just because Euro States are taxing at 50%, it doesn't mean that the US is cheaper. We're paying for the services that Europeans take for granted while someone else makes a profit off of these services. The US is more expensive and US citizens are getting less for their money.

For some. But at $200k, another 15% in tax is $30k. That covers healthcare (the extra not covered by employer insurance), childcare for 1 with a little left over.

And it's not just $30k. That same role is likely paid less in the EU. So it's more like $50-70k extra.

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

#117

Post by bigDinosaur »

yardstick wrote: post #86

In NZ we have created a culture that obsesses with house prices. It's been this way since at least 2000, if not earlier. Many peoples retirements plans hinge on them being landlords or holding large amounts of property. The NZ share market is a joke. Pretty much any serious global company that started in NZ moves away from NZ without even entering our sharemarket. There are a few exceptions of course, but by and larg…

House prices are like car dependency in that when it becomes an issue it makes so many conversations so boring. Housing and traffic. Exciting! People become obsessed and then it's all downhill.

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

#118

Post by sgt »

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.

And in Norway it's still very common for young people (25-50) to buy property. Often couples buying together, but it's almost a given that you buy instead of renting.

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

#119

Post by solenoidalslide »

refurb wrote: post #105
msh wrote: post #10

Earlier quoted context omitted.

But then you also have to consider what services are included in the tax that the lower tax rate might have to pay out of pocket.

Such as? At that income level you have great health insurance, can still qualify for state schools, maybe childcare? I agree at lower taxes the difference is more stark.

The United States is the fourth largest country in the world and has no kind of high speed rail of any kind

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

#120

Post by richbell »

yardstick wrote: post #86

In NZ we have created a culture that obsesses with house prices. It's been this way since at least 2000, if not earlier. Many peoples retirements plans hinge on them being landlords or holding large amounts of property. The NZ share market is a joke. Pretty much any serious global company that started in NZ moves away from NZ without even entering our sharemarket. There are a few exceptions of course, but by and larg…

> In NZ we have created a culture that obsesses with house prices. It's been this way since at least 2000, if not earlier. Many peoples retirements plans hinge on them being landlords or holding large amounts of property.

Canada and New Zealand are similar in that respect. There are a sizable number of people with "investment properties", but the majority of homeowners own a single home and are counting on the price to rise indefinitely to fund their retirement.

Economists and politicians regularly brag about how much 'wealth' the average Canadian has; in reality, being able to sell your house for 1.5MM isn't that much of a windfall when other houses are at least 1MM and rising rapidly, and renting is more expensive than having a mortgage.

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