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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

#141

Post by Markoff »

yafinder wrote: post #54
martinsuchan wrote: post #30

Similar or worse situation is here in Prague, Czechia, person working in Prague needs about ~16 yearly incomes to buy average home here, it's insane, see: https://www.idnes.cz/ekonomika/domaci/praha-byt-cena-bydleni... Also Czech National Bank just increased the base interest rate to 5.75% this week, you can imagine how expensive regular mortgage is currently.

What does an average home in Prague look like? Is it an apartment or a detached house, how many bedrooms? In Eastern European countries, the quality of housing varies greatly, from cramped apartments in gray concrete buildings to elegant mansions. I wonder, which of this is worth 16 times annual income.

65 m2 apartment is Czech average, obviously it will be apartment as well in Prague, since houses are reserved only for extremely wealthy or people with family here who inherited it, though I'd not guess what's average m2 in Prague, I'd assume less than Czech 65m2 average, which is btw. quite small 2BR+1LR apartment

and it will be mix of old brick buildings, commie concrete block buildings and new brick/concrete buildings, msot of the people live for sure in commie block ghettoes (8-13fl usually), I am lucky one bought apartment in concrete building but with only 5 floors which looks also from outside like brick building (only around 50 of these models built in Czechia) and right next to my building is older brick building owith almost same height, lot of green and quite close to city center unlike those commie block ghettos which are on the edges of city

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

#142

Post by IMTDb »

TrackerFF wrote: post #72

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…

Public policies are now heavily favouring public transport and cycling, which both require higher population density than single family homes to be effective. As a consequence, a higher share of the population is expected to live in apartments rather than homes compared to the 70's and 80's.

Additionally, averages tend be impacted by outliers. Take the example of a rich heir buying a multi-million dollar mansion. His property will heavily influence the average house cost and his income is close to 0 since he lives off his capital, thereby reducing the average household income. This can twist the perception of what's actually happening for most people. The best way to fight that is to use medians instead of averages.

I am not able to find reputable sources for data in Norway, but what does your analysis look like when looking at median household income and median appartment prices. As this will more likely reflect the reality on the field.

Of course, people will want to own houses, but large - car optimized - and low density suburbs, are an anomaly of the last 50 years. They actually aren't sustainable, so their expansion has to stop, and the expectation is that the median worker will be steered towards appartment, while the richer elite will be able to afford houses - but that will gradually become a minority.

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

#143

Post by Markoff »

Manheim wrote: post #99
Markoff wrote: post #46

Earlier quoted context omitted.

Are you quoting average income per capita or household?

per capita https://finanssans.no/gjennomsnittsl%C3%B8nn-i-norge

but the article is per household, so you should slash your prices by half since household usually consist of two people, so it seems Norway has extremely cheap properties

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

#144

Post by ido »

Escapado wrote: post #130
ido wrote: post #104

Earlier quoted context omitted.

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 pa…

I think you think that because buying (rather than renting) is not traditionally that common in German/Austrian cities. In other countries it's perfectly expected that you take a mortgage for 30+ years if you buy a house, it's the same* as paying rent for 30 years except you get to own the house at the end

* i know it's not exactly the same, e.g. you need a downpayment and you have to pay for maintaining the house but it's not like you wouldn't have had to pay rent the same 30+ years had you rented instead of bought.

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

#145

Post by ipsi »

jvvw wrote: post #75
ipsi wrote: post #21

Earlier quoted context omitted.

That's not correct. I suspect that the source you saw said: > As of 2017, the average annual real disposable income of Dutch households was roughly 31,500 euros. Disposable household income would be, at a minimum, after tax, and possibly after accommodation. You'd want to increase that by about 60% to account for tax/etc, which would be 50.4K. That seems more reasonable to me, and would put the multiplier at 7.7. Not…

I don't think London throws them out of whack all that much. I'm around Milton Keynes/Bedford so SE but a bit further than most folk would want to commute to London (and I'd imagine a reasonable percentage of the population live within a similar radius of London) and that average house price feels about right. You'd might manage to get a three-bed terrace or two-bed semi for that sort of amount I'd say.

I dunno - I always assumed that London-proper prices (i.e., not Milton Keynes) being so outrageously high, upwards of £1,000,000, would throw out the average. Though perhaps the number of slightly cheaper apartments brings it back down again (although of course statistics can't tell you that's because the apartments are the size of a shoebox).

Plus as I understand it, a bit further north you could probably start getting a decent house for £300,000 or less. And in really out of the way places, under £150,000. Trying to talk about "average" house prices in most countries is generally a bit daft IMO because the range between "remote little country town" and "centre of the largest city" is vast.

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

#146

Post by Manheim »

Markoff wrote: post #143
Manheim wrote: post #99

Earlier quoted context omitted.

per capita https://finanssans.no/gjennomsnittsl%C3%B8nn-i-norge

but the article is per household, so you should slash your prices by half since household usually consist of two people, so it seems Norway has extremely cheap properties

true - many households here are with double income, but you can't double the income just like that since there are many single person housholds. I find statistics that say that for all households the median after tax, is NOK 546 700 (2020). I can't find the official statistics over income before taxation. I do however, find a public research article that indicate that just under fifty percent of the poulation has a household income lower than NOK 750 000.

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

#147

Post by PickledHotdog »

Gustomaximus wrote: post #129
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 goo…

Unfortunately it's been the policy of successive Australian governments to put "real estate investment" into the engine room of the economy. They didn't do it 15 years ago vecahse they didn't want to. It's going to be an absolute ball-breaker trying to unwind the whole thing, too.

If you limit it to 3 houses per person you'll get people buying houses for their three year olds (which already happens). It's an improvement, for sure, but it'll be rorted.

What we really need is 1960s Chinese Land Reforms

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

#148

Post by PickledHotdog »

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…

There are no significant taxes on housing investment in Australia and infact there are tax concessions to do so ("Negative Gearing") which no government has the guts to repeal because the largest cohort of voters (people 60+) benefit so much from it that to repeal it is political suicide.

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

#149

Post by PickledHotdog »

chii wrote: post #80
nikanj wrote: post #63

Earlier quoted context omitted.

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,…

you don't save money by merely keeping it in your savings account (at least, not for the past decade and a half). You "save" by investing that savings in stocks (and may be some mix of bonds too if person is more fiscally conservative).

Ah yes, I'm sure that's what my parents had to do in the late 70s to get their deposit together.

I'm not saying your wrong or that it's not a bad idea, but should you have to take risks by investing your deposit just so you can have the chance to take a bigger risk in the housing market? It's mental that that's the case these days

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

#150

Post by Fire-Dragon-DoL »

nikanj wrote: post #109
Fire-Dragon-DoL wrote: post #98

Earlier quoted context omitted.

The greater Vancouver area though is not 1.3M and a detached house is something not even taken in consideration in Europe. I lived in Rome and having a yard meant you were loaded

This was the first hit from Google https://wowa.ca/vancouver-housing-market

Sorry, simpler than that, I misread the post. The post states 2.12M for detached, which is definitely in line with what I was observing
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