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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

#131
post #128
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.

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

US has state schools that have subsidized education and grants for low income. And we're talking internationally ranked schools like Berkeley, UCLA, U of Michigan, U of Virginia. And cheap loans to pay for it (plus high salaries to pay it back).

US Social Security is actually very generous with the max pension pay out ($3,300USD per month per person). Lots of American retire with nothing more than their SS pension. SSI is disability insurance if you can't work. You can also qualify for free Medicaid or Medicare if you're poor or can't work due to illness. Once you hit 65 you get very generous healthcare coverage.

Unemployment benefits are very generous. During the 2008 crash they were extended for 2 years at 80% of your normal up to a cap (like $4,000 per month in CA I believe). Even during normal times you can get 26 weeks. Welfare after that.

Medical maybe but in Europe, private insurance isn't uncommon along with premium payments and co-pays. So I wouldn't act like Europe is entirely "free" unless it's like the UK and you stick entirely with the public system. In the US your employer pays much of it, you can get HSA (tax free) money to help with out of pocket. It's a massive paperwork hassle and annoy bureaucracy I'll agree.

Childcare if it's subsidized sure.

The US has plenty of great public schools. Don't let the movies fool you. I lived in a small town in Michigan and the public schools were outstanding and entirely free.

I always chuckle when people say "the US has no safety net" when 50% of our taxes go to "safety net" programs.

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

#132

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…

A lot of our current problem is actually caused by too little domestic population growth. They tried to cover it up with low interest rates and immigration but it isn't working.

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

#133
I can’t believe this hasn’t been mentioned, but NZ has no capital gains tax, making property an interest-free investment. People put their wealth into the housing market ever since the 80s and are putting their untaxed profits back in. Source: kiwi.

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

#134
post #96

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?

It’s NZ’s CFC/FIF rules.

See

https://www.ird.govt.nz/income-tax/income-tax-for-businesses...

https://taxsummaries.pwc.com/new-zealand/individual/income-d...

No I don’t believe you can get tax credits for paper loses. But you definitely do have to pay for paper gains.

Most financial firms in NZ wrap US/growth stocks in a special type of investment called a PIE, which essentially they handle the tax issues for you (Ie your net % gain includes after this wealth tax is taken into account).

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

#135

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…

How is the startup scene in NZ? I wonder if local investors could focus on that, even if they have to import talent. Perhaps there are regulations preventing this? But, of course I am saying this realizing startups are not a "quick buck" like real estate.

There is a decent bootstrapping startup scene in NZ. Not too many active investors, and if they are they aren’t the same nature as you would find in the US. Less risk takers, more property buyers.

The problem is most NZ startups don’t have the hockey stick growth due to our isolated market. We have to spend a lot more on sales before network effects kick in. The Internet can only help soo much.

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

#136
Is this a NZ-caused problem like the article seems to imply? Or is it foreign countries / companies buying up houses in place of stock like seems to be the case everywhere else? Or is it just more billionaires (from other countries) buying backup/vacation homes in NZ?

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

#138
post #93

Earlier quoted context omitted.

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.

it is an extremely violent and dangerous place, and not reflected in crime statistics due to peoples distrust of the police and general motivation to "not be a dirty grass".

I hear it's getting better with the students these days, but, as mentioned, it's quite dangerous to be any amount of affluent in Coventry.

It's actually hard to convey how frightening it can be, to randomly be targeted while walking through the streets.. I'm having a mild panic just thinking about it.

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

#139

I can’t believe this hasn’t been mentioned, but NZ has no capital gains tax, making property an interest-free investment. People put their wealth into the housing market ever since the 80s and are putting their untaxed profits back in. Source: kiwi.

Americans are exempted from a great amount of capital gains as well.

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

#140

How are the lending laws in New Zealand, if they're regulated? Here in Norway, one can loan 5x of annual gross income (minus any debt you have), and at least a 15% down payment. Average annual household income here is 610000 NOK (~64500 USD). Average home price here (end of April) is 4483328 NOK (~473914 USD), so the ratio here would be 7.34 - but that's assuming single income household. For double income, that ratio…

> Average annual household income here is 610000 NOK (~64500 USD).

Norway's GDP per capita is about USD70.000. Surely you're using GDP per capita, or average individual income, not household income? I have a very hard time believing that Norwegian average household income is just over half that of New Zealand.

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