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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

#61

Post by Manheim »

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.

If you want to do a comparable structure on this subject you need to set many parameters. There are some resources you can use for this, i.e. https://world-statistics.org/. Anyways, tax level is not the only indicator for the purchasing power in a population since it is often related to public services and common support programs.

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

#62

Post by 867-5309 »

_pdp_ wrote: post #32
NiekvdMaas wrote: post #11

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.

The average house price in south east in UK is about 500K and the average salary in the same region is about 30K. This is more like ~17x.

similar in the southwest - Cornwall prices are crazy at the moment thanks to the mass migration from the southeast during the pandemic

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

#63

Post by nikanj »

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, $2.12 million/25% yoy.

Waiting and saving money is no longer a feasible housing strategy, unless you can save at least a few thousand every month.

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

#64

Post by beardedetim »

edf13 wrote: post #35
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.

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.

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

#65

Post by te_chris »

NZs on its way to a crash. Debt to income ratios of recent mortgages are insane, and they don't do long-term fixes there. Either lots of defaults or massive drying up of disposable income. https://www.stuff.co.nz/business/128396590/world-watching-nz...

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

#67

Post by edf13 »

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.

Over here in Europe larger deposits are in and getting larger.

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

#68

Post by HPsquared »

bombcar wrote: post #26
dijit wrote: post #17

Earlier quoted context omitted.

That's not normal? I paid half my income to rent when living in London 10 years ago, and prices have only gone up since then.

For a long time a "rule of thumb" was 33% of income dedicated to housing + debts (usually based on underwriting rules, the bank wanted to see that your home loan payment + any other loan payments would be under 33% of your gross).

That depends on income though, surely. If someone is on $1M a year, even 90% going to rent would be quite sustainable if the other living expenses are affordable. On the other hand if someone's on $10k a year they'd still live poorly even if rent was free.

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

#70

Post by jurmous »

varispeed wrote: post #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.

Do you have any sources that support this?

And what makes this an artificial financial crisis? As far as I see it, much of recent inflation is happening as an effect of all COVID financial support programs and the effects on supply system because of lockdowns and turning down factory production too aggressively. And now additionally the effects of sanctions and stopping of energy imports from Russia after Russian aggressive move into Ukraine. Hardly artificial except if you believe that Covid or Russian aggression is manufactured by a conspiracy of some rich people in the WEF...

And what will force current home owners to sell a home? Since in this country you loose more money renting than owning.

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