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

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

#51
Where I live (southern Germany), you cannot find a house under 600,000 EUR. The average net household income in Germany is around 43,000 EUR. That means that house prices here are over 16 times the average household income. Yupp, it's bad.

My wife and I both have university degrees, we have good and secure jobs, and our net household income is above average. But we have generally accepted the fact that it is impossible for us to fully own a house before we are dead here, even with the national or state-wide support programs for families (we would not get much, if any, support because our income is too large). Our parents don't quite get this. When my parents were our age in the early 90ies, my mother was a homekeeper and my father worked as a carpenter at a small company with a completely average salary. Yet it was no problem for them to build a fairly large house in a very nice neighorbood, without any financial support from their families. I remember we didn't go on vacation for 2 years in the late 90ies "because we now have to pay off the mortgage", but that was it. Their house is today worth so much (> 1,000,000) that it would be impossible for us to find a bank willing to lend us the money to buy it.

We currently rent a 4 room apartment, but lived in a 2-room apartment with our daughter for 2 years before because we couldn't find an apartment in a 30 km radius around our home town. The problem was not money - there was simply nothing available. For our current apartment, we were one of around 500 families that were initially interested, and one of 50 families who made it through the various hoops and obstacles created by the estate agent to get that number down to something managable. This is completely standard here. We only got the apartment because we were lucky.

At the same time, we are now starting a legal battle with our local district for a kindergarten place for our 3 year old daughter, which she is very clearly entitled to by law and for which we applied years ago. But their are no free places anywhere, and nobody in our local town seems to care anymore. Our local mayor basically said "well, sue the district". The people in charge at our town hall also regularly quit. The previous person, who has now also left, told us she cannot bear parents in tears anymore who scream and yell at her because they have to both work full-time to pay of massive mortgages, and don't know what to do with their children. Again, this is something our parents cannot even remotely understand, because the situation was completely different 30 years ago, when it was absolutely standard for a child to enter kindergarten when it was 3 years old. You just went to the town, asked for a place, and one was assigned to you.

The situation for families here has become so bad that we are seriously considering leaving the country.

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

#52
post #37
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…

Bank credit creation has inflated prices leaving them relatively untethered from housing supply.

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

#53
post #37
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…

Low interest rates and not enough building have causd prices to increase, of course, just like anywhere else but there was another factor.

For some inexplicable reason they decided to remove the LVR requirements for lending in response to covid.

This suddenly caused a huge surge in ability for people to buy houses that were previously not able to.

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

#54

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.

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

#55
The prices are artificially inflated by WEF connected funds. They pay above market price for properties, pricing out locals out of the market. This is part of Great Reset. The artificial financial crisis will force people who own homes to sell as well and by the target date of 2030, people will own nothing.

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

#56
post #25

Earlier quoted context omitted.

Stupid question... is the problem with not enough land (eg. if you want to live in manhattan, you literally have nowhere to build, unless you demolish something else),... or is there enough buildable (physically) land in "near-enough-to-commute" locations, but the government doesn't allow people to build (large enough) housing there?

In Wellington at least (where I live), there are limits on the density of housing that can be built (and height). Recently, the council was going to free up some of these restrictions a bit, but there was a lot of backlash by residents who didn't want the "character" of their neighbourhoods to be affected, so the relaxation in the rules has been a lot less. Wellington is a bit different in that there is a limit on th…

“pinned in” - meaning “penned in”? I can see they’d sound the same in a New Zealand accent so just idly wondering

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

#57
post #27

Earlier quoted context omitted.

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

GP must think the maximum tax rate is reached at 5 million euro a year. In most Euro countries you're at 45% (combining both social security and income tax) at around 50k/year. Or actually close to 60% taxed if you count the 33% paid by the company in social security tax that is somewhat hidden to the employee.

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

#58
post #51

Where I live (southern Germany), you cannot find a house under 600,000 EUR. The average net household income in Germany is around 43,000 EUR. That means that house prices here are over 16 times the average household income. Yupp, it's bad. My wife and I both have university degrees, we have good and secure jobs, and our net household income is above average. But we have generally accepted the fact that it is impossib…

Very similar here in the Netherlands... House prices are growing fast.

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

#59
I'm currently living in Tokyo and have family visiting from NZ. I've already had a few uncomfortable conversations about when I'll be coming back. Realistically I won't be, not only would I lose more than half my salary, but I would then have to dedicate a large portion of what's left on an overpriced hovel that's probably rotting from the inside. It's no wonder that most of the people I graduated with left the country long ago. Those who stayed had well off parents who could get them onto the property ladder.

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

#60

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.

Czechia - 220K CZK per person with average household 2.1 people makes 462K CZK / 18823 EUR with average real estate price 3.751M CZK /153K EUR (65m2, data from end 2021) so roughly 8 yearly average household incomes to get average 65 m2 apartment with prices varying a lot across regions (in Prague would such apartment cost almost exactly double price)

https://www.kurzy.cz/zpravy/630209-prijmy-a-zivotni-podminky... https://www.seznamzpravy.cz/clanek/za-rok-a-pul-pres-milion-...

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