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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

#121

Post by LadyCailin »

pydry wrote: post #76
5350-uiop-1130 wrote: post #24

Earlier quoted context omitted.

What is most depressing to me, where do people get the money??? It would take me 30 years of saving to get 500k, that's like 70-80% of my working life. That's assuming you don't get sick or lose your job. This metric annoy me because only a fraction of your income can go toward rent or mortgage . You would pay over 100k in interest fees alone on a long term mortgage.

Real incomes cant keep up with compounding, especially when the latter is basically tax free. It's driven by capital gains, not salaries. What's most depressing to me is that the only time a party promised to slow down this madness they were destroyed in an election. People voted for this. The majority voted for this.

Yes, why would I vote against my own interests? I am after all a temporarily embarrassed millionaire, rather than a poor person. I’ll get there one day, surely.

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

#122

Post by refurb »

solenoidalslide wrote: post #119
refurb wrote: post #105

Earlier quoted context omitted.

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

True, but we have this thing called "high speed planes". Gets you there even faster than rail.

If you want to take a train and you've got time to kill, take Amtrak.

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

#123

Post by 5350-uiop-1130 »

maccard wrote: post #110
5350-uiop-1130 wrote: post #24

Earlier quoted context omitted.

What is most depressing to me, where do people get the money??? It would take me 30 years of saving to get 500k, that's like 70-80% of my working life. That's assuming you don't get sick or lose your job. This metric annoy me because only a fraction of your income can go toward rent or mortgage . You would pay over 100k in interest fees alone on a long term mortgage.

> What is most depressing to me, where do people get the money?? It would take me 30 years of saving to get 500k, that's like 70-80% of my working life. Mortgages. This is why they exist. > You would pay over 100k in interest fees alone on a long term mortgage. You pay 100k of today's money in interest and fees over the course of 30 years. 100k in 1992 was worth far far more than 100k is worth today.

Yes, because a bank will happily give someone on a 60k salary a 1 million dollar mortgage.

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

#124

Post by ZeroGravitas »

This seems a fairly easy thing to fix except for the politics. (Similar to climate change)

Anyone got a good solution including the politics angle?

You'd need to give people an off ramp from their house investments and give them confidence that they'd get a share of the economic goods that they currently receive by holding a house plus a bonus from the bounty unleashed by the sane housing market.

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

#126

Post by dannyw »

ZeroGravitas wrote: post #124

This seems a fairly easy thing to fix except for the politics. (Similar to climate change) Anyone got a good solution including the politics angle? You'd need to give people an off ramp from their house investments and give them confidence that they'd get a share of the economic goods that they currently receive by holding a house plus a bonus from the bounty unleashed by the sane housing market.

There's no need: Stubbornly high inflation due to loose monetary policy (which is the largest contributor into asset overvaluations; including housing) is forcing central banks to raise rates.

Higher interest rates means buyers can afford to offer less, causing property prices to fall.

Home prices in Auckland is already down 10-20% and the RBNZ is continuing to hike. The same is happening in Canada, and if you check Zillow's latest report, it's happening in America too although likely to be more muted (i.e. take longer) due to the US's fairly unique 30-year fixed rates and people's 3 month interest rate locks expiring.

Just give it another year or two, the housing bubble will have sorted itself thanks to normal levels of interest rates.

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

#127

Post by philjohn »

dijit wrote: post #93
philjohn wrote: post #84

Earlier quoted context omitted.

Until 9 years ago I was living in a 3 bed semi detached within commuting distance of Birmingham, near a trainline, monthly season ticket was £90 - mortgage was around £400 a month - interestingly, houses there are still relatively affordable.

Coventry is/was that cheap, the downside is you’re extremely likely not to make it home from the train station. Hardly a reasonable trade off.

In what way were you not likely to make it home?

This was a place in South Staffordshire, on the chase line.

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

#128

Post by msh »

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.

A few things off the top of my head:

- Free university education, with a stipend payed to study (so no student loans, no need to save for the kids college fund). - Social security net so you have to save less for that kind of thing. - unemployment benefits, so less need to save for that - No co pay on medical expenses. - cheap and good childcare - good public schools, cheapish private schools

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

#129

Post by Gustomaximus »

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.

I'm Brisbane outskirts. Moved here to avoid the crazy Sydney prices about 5 years ago. We would expect a bit under double now, maybe 70% up.

It's crazy. Great to feel you have more equity on the surface, but it's meaningless really as you have to sell to buy if your moving and then things like rates and stamp duty are higher than ever.

I think the best solution is cap how many properties people can own. Homes are good for people or investors, not both. While interest rates are the main driver, a country like Australia has little ability to far steer outside global rates. From that I think the best solution is to place a limit of ~3 residential properties per person, or something like than with a grace period to ease the new rules. Get the big investors out of the market. Make homes for people again. Action should have been 15 years ago before it was todays problem, but was still obviously heading this way. It's going to be hard to unwind now without creating serious pain somewhere.

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

#130

Post by Escapado »

ido wrote: post #104
Escapado wrote: post #100

Earlier quoted context omitted.

It's pretty much the same for anything around the city of hamburg in the north and most of the time it's less about the houses and more about the land they sit on. Building got more expensive but land even more so. 1.000 EUR/m² of land for adjacent cities are becoming the norm. Most of my friends graduated from university with either a bachelor or a masters degree and only those who stand to inherit a sizable sum of…

I don't disagree that the housing market in german cities is overheated, but isn't it pretty standard to take 30+ year mortgages? Keep in mind that 20+ years into paying this back your monthly payment will not increase to 2042 levels but remain in current 2022 levels.

When I talked to my parents they told me most of their peers would pay off their mortgage within 20 years but maybe times changed, I don't know the data on that. I am 30 now and I have trouble imagining being in debt for a time equivalent to my entire lifetime so far - just to live in a house. 15 years sounds so much more bearable emotionally but it's probably never gonna happen. You are obviously right about 2042 payment levels probably being different but that also hinges on inflation being positive - but I would agree that that's more probable than deflation.
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