Can you afford a home in NZ?

[samlloyd]

My goal was to buy a house when i was a teenager.

failed, i was 20

[Elmendorf]

I voted no because I currently co-own a house with my ex. I can not occupy said house, I can not speak to said co-owner, and since he decided to clean the accounts out last week I have now put a hold on the account. All this while i am out renting someone else's house and paying their mortgage as well as mine.

I personally can afford to take over the mortgage by myself and live at said property, but my ex will not let me do that without "buying" him out of the non refundable deposit he contributed to the house when it was first bought.

TBH houses are just not worth the hassle.

[sergei]

I don't see myself able to afford even 200,000 house with current salary. I will need at least to double to what I earn to be able to afford two bedroom house.

I am hoping for two things:

1) the housing market crash - reason why I believe it will crash: the prices are artificially inflated

2) some government scheme to discourage purchase of property in purpose of reselling it later for profit. Huge tax on second house sale will be good deterrent. Also tax the hell out of land lords.

Before everyone lynches me as "communist", below my reasoning why the current situation in housing market is bad.

What we are coming back to is Landlord-peasant situation from feudal europe. With these current trends (we are almost there) we looking at small amount of very rich individuals who own the land, and majority who rent. Why is this bad? Apply monopoly game principal. You can charge arm and a leg if there is no competition. Also you don't really want to sell the house because it makes you a lot of money.
In feudal europe there was a way to get really rich - brutality. You could just kill the land lord and claim the property for yourself.
Now - not so.

Holding an office job for majority of population will not allow purchasing of the house. A few decades ago it was possible to buy a house just having an average income. Now it is impossible. You will need to be in top 10%* to afford a house.

Of course if you are risk taker you could start your own business, but some people don't really have people's skills to achieve that (and if every one would start business - that of course would not work at all).

Another way to earn money is come up with a shady way of scamming people out of their money (homoeopathy, magnetic beds, wireless radiation "absorbers", grow your penis supplements, how to make money courses, and various pyramid schemes), of course people with solid morals would not be able to do anything.

In reality it is up to government to keep stratification in check, but the problem is that government is full of people who directly benefit from this stratification (how many MPs only own 1 property?). I doubt John Key would put his country before his profits.

As far as I can see, this housing marking is a running away train (just like our universe), the houses became more expensive by more than standard inflation.

[Bling]

Also tax the hell out of land lords.

You do realise this would back fire on you yes? Sure there's a lot of landlords out there that are mortgage free, but there's also a huge amount of landlords that have mortgages on the properties, you start making it impossible for them to cover their costs and they will sell up and the number of rentals available will become less. Either that or they will up the rents then you will moan more.

Its not impossible to buy a house these days at all. Sure you might not be able to buy in the area you'd like to live, but that's life.

[sergei]

Also tax the hell out of land lords.

You do realise this would back fire on you yes? Sure there's a lot of landlords out there that are mortgage free, but there's also a huge amount of landlords that have mortgages on the properties, you start making it impossible for them to cover their costs and they will sell up and the number of rentals available will become less. Either that or they will up the rents then you will moan more.

Yes, this is the goal, they will sell at a lot lower price because they should not borrow against current property, to profiteer.
Let them put the rent up when the market will be flooded with cheap houses.

[sergei]

Its not impossible to buy a house these days at all. Sure you might not be able to buy in the area you'd like to live, but that's life.

Could you please point to me where can I buy $100,000 two bedroom house, that is not 5 hours away from generic workplace?

[Bling]

Sweet, well get back to me when that theory becomes a reality

Can you point me to the hardware shop that will supply the parts to build a house for 100k all up? Building houses costs more and more each year. Price increases (on building materials) often happen more than once a year.

[sergei]

Sweet, well get back to me when that theory becomes a reality

Can you point me to the hardware shop that will supply the parts to build a house for 100k all up?

It became reality in USA.
So called "recession".
They call it recession - I call it stabilization.

[sergei]

Sweet, well get back to me when that theory becomes a reality

Can you point me to the hardware shop that will supply the parts to build a house for 100k all up? Building houses costs more and more each year. Price increases (on building materials) often happen more than once a year.

Why a 25 yo house should cost as much as brand new one?

[Bling]

Big difference between the housing market here and there. BIG. Property value is mainly in the land, not the improvements on it.

[sergei]

Big difference between the housing market here and there. BIG. Property value is mainly in the land, not the improvements on it.

Yet the population density of NZ does not warrant such high prices of land.

[Bling]

Everyone wants to be close to town/work. That's the problem. The further from town you go the cheaper a property will be. I live on the south EDGE of town Still, chch is a lot smaller than Auckland, so getting to town would take a max of 20 minutes. You can buy a house for 20k down south

[sergei]

My point is:

Middle class in NZ is unable to own a home, and retire debt free.
Govt. should have initiative to help first time buyers. Real help. Instead they came up with kiwi saver (which is pathetic).

[sergei]

Everyone wants to be close to town/work. That's the problem. The further from town you go the cheaper a property will be. I live on the south EDGE of town Still, chch is a lot smaller than Auckland, so getting to town would take a max of 20 minutes. You can buy a house for 20k down south

Yeah, you are not in Auckland.
Everything in radius of 200km of Auckland is unaffordable (more so in north).

I don't mind living in south island (Auckland is full of idiots), but there are no jobs there for me.

[Bling]

You choose to live in Auckland remember I choose not to.

What would you consider the weekly household wage of a middle class household to be? If you can put a figure on it

[sergei]

What would you consider the weekly household wage of a middle class house to be? If you can put a figure on it

middle class is, by my understanding median wage. Median wage is around 500-600 p/w in Auckland after tax. So two people earn ~1000 p/w.
Now average price of a house in Auckland is ~350,000-400,000, which puts mortgage repayments around $800-$1000 per week.
Another point is that most of the banks will not even consider lending unless primary applicant earns $60,000. That $60,000 is well above median.

[sergei]

You choose to live in Auckland remember I choose not to.

What would you consider the weekly household wage of a middle class household to be? If you can put a figure on it

People don't choose to live in Auckland, people live in Auckland because this is where job is.

[frost]

i foolishly thought i could get ahead if i buy a house early

we talk about this sort of thing at my mates workshop all the time,
the way the system is, you dont really get anywhere until its too late(old)

e.g
you get a mortgage at 20something pay it off in 20 year if your lucky,
while paying it off you have no money to do sh1t fak all,
now your 4osomething hopefully dept free,
you think of buying a flat to expand your portfolio,
govt comes in and says no or we will tax the hell out of you,
so your left to slowly die in your old ass house that wasn't your first choice because the price was so high.

or.....
you "let" the govt hold money from you until your 60 and then you can almost afford to buy a sh1t house. while living poverty for the last 40 years, and the money they give back is only 1/4 of what a house costs(in the future)

[samlloyd]

i foolishly thought i could get ahead if i buy a house early

we talk about this sort of thing at my mates workshop all the time,
the way the system is, you dont really get anywhere until its too late(old)

e.g
you get a mortgage at 20something pay it off in 20 year if your lucky,
while paying it off you have no money to do sh1t fak all,
now your 4osomething hopefully dept free,
you think of buying a flat to expand your portfolio,
govt comes in and says no or we will tax the hell out of you,
so your left to slowly die in your old buttocks house that wasn't your first choice because the price was so high.

or.....
you "let" the govt hold money from you until your 60 and then you can almost afford to buy a sh1t house. while living poverty for the last 40 years, and the money they give back is only 1/4 of what a house costs(in the future)

What about if you buy one when your young, 7 years time, its gained a bit of equity, use that to borrow more, buy another, same thing happens, sell the first one, thats gained even more in the meantime, use that money to pay back the second house. This could happen..

[frost]

i foolishly thought i could get ahead if i buy a house early

we talk about this sort of thing at my mates workshop all the time,
the way the system is, you dont really get anywhere until its too late(old)

e.g
you get a mortgage at 20something pay it off in 20 year if your lucky,
while paying it off you have no money to do sh1t fak all,
now your 4osomething hopefully dept free,
you think of buying a flat to expand your portfolio,
govt comes in and says no or we will tax the hell out of you,
so your left to slowly die in your old buttocks house that wasn't your first choice because the price was so high.

or.....
you "let" the govt hold money from you until your 60 and then you can almost afford to buy a sh1t house. while living poverty for the last 40 years, and the money they give back is only 1/4 of what a house costs(in the future)

What about if you buy one when your young, 7 years time, its gained a bit of equity, use that to borrow more, buy another, same thing happens, sell the first one, thats gained even more in the meantime, use that money to pay back the second house. This could happen..

haha and orange sherbet comes out my arse.
it use to work like that but not now,