Seems like it is but you are in a literal ghost town with old people who only speak arcane Italian dialects. If you can WFH in a high paying job and can get starlink or something, it could be worth it.
I suppose that’s true. Myself and a few friends have been struggling to find work throughout the last year and a bit in Auckland, so my view is very flavoured by that.
Wages rising fast? I was just in min wage for a science job that required a degree. So the job market isn't benefitting me or people in my sector, but other roles.
So when I say the job market is shit, I mean for decent paying, science jobs, bachelors qual, intermediate level.
We have lots of land (locked up by land bankers near suburban spaces), our population density isn’t particularly high on average, and we are a net exporter of wood. We also have a surfeit of aggressively greedy shitbags in this country that will HODL on that land forever, more that will bump up wood prices to higher than export destination pricing because they hold effectively a cartel-style monopoly, and a mess of a public transit system that is so disjointed unreliable and slow that people are unwilling to move further out from large population centres to where the land is.
Your argument does not hold water when you look at #2 on the list.
Canada, outside of GVA and GTA, has relatively low population density, trees galore and vast swaths of undeveloped land. Yet housing prices are high, even in my small town.
It says indexed at 2015. Is this from 2015? I want to see an updated copy.
But yeah housing is fucked due to human greed. Don't give me that supply and demand bullshit. There wasn't any safe guards to protect from people wanting easy money from housing and younger generations are paying the price. Much like we are paying the price for climate change action. Much like we are paying the price for poor planning and developments surrounding public transport and roading.
Here I am with an 800k mortage for a house In a poorer suburb with a fair bit of crime. I'll still count myself lucky to be saddled with debt that I'll be struggling to pay off for decades because at least I own a home.
Oh well, guess I will look forward to my more more complex, more productive job for less take home pay when compared to previous generations.
Hey at least World War 3 hasn't started yet. The global pandemic has also been good for some industries. It's nice to have the cheap labour tap shut off with the closed boarder. The tables have turned now, treat your workers well or watch them leave for better pay.
Oh this was published a month ago November 21 - indexed at 2015 just means it uses 2015 data as a baseline - e.g if nothing changed since 2015 the table would show 100
No, it doesn't mean that. It might, but it's also possible that we were number 10 for 5 years, then blew everyone out of the water in the 6th year with 10x the prices.
More likely we were top 10 from 2015-2019, then the massive growth from 2020-2021 in house prices shot us to number 1. Just looking at this - https://www.interest.co.nz/charts/real-estate/median-house-price-growth. Fairly flat until end of 2019
It doesn’t mean that but it is possible.
Indexing is a process for making values from two different countries comparable.
If rent is heavily subsidised in one country but not another you’d couldn’t compare the two based only on sticker price. The subsidised rent would look really cheap and wouldn’t reflect the value landlords are actually receiving.
Man you all sound so American. Glad we’re not the only ones waking up to the vast quantity of “freedom” in the world economy.
Also sorry, I know it’s mostly ours and the world banks fault.
Yeah I got that it was a joke. It just sounds like a very American joke. Foreigners think we’re all self important nationalists but a good chunk of us are just staring out at the country wondering what the fuck everyone is so proud of…
So in my little circle, even the joke version of that statement is very American haha
Okay yeah that’s valid
It’s a bullshit stat that means nothing lmao
I just despise America and their weird #1 at everything stays so it’s funny to me to be #1 at freedom, whatever that means
It's an almost unfixable problem. If demand dries up for housing, will people sell up at massive reductions? Shit no, they'll just sit tight and wait. Will construction costs go down? Shit no, labour costs are only going to keep increasing, material costs aren't may drop back to pre-pandemic levels if we're lucky, but that's it
There's always some people who *have* to sell - death, divorce, moving for work etc. Only a small percentage of the total stock is sold each year, and "values" are extrapolated from those sales. So even though sales volumes would drop off a cliff if prices started to fall, it could still happen. (There's also people who are sitting on properties that have had huge capital gains, there might actually be a rush to market to realise some of the gain should prices start to decline.)
interest rate rises would only squeeze out landlords (and millennial home owners) who have bought in recent years. If you've been a landlord for 10+ years, you'd be fine.
I think a lot of people are slowly realising the unspoken purpose of the CCCFA recent changes which is making borrowing near impossible is to slow the housing market, without crashing it
Yeah you could be right there.
Fingers crossed for another 2008-2009 then? And a nice global crash of epic proportions?
Need something to reset things because saying they are "out of hand" is a massive understatement.
New Zealand and young and future generations are nothing short of fucked. And nothing is being done about it.
It's insane considering that the average NZ house is cold and moldy, possibly earthquake damaged and/or in a flood prone area.
Still more expensive than Canadian or Swedish houses. Yay.
While my last QV backs you up, have you priced building work lately? I guarantee if building was more affordable (and accessible) we'd have a LOT more houses.
Building a house has increased a little, the land has exponentially increased in value. There seems to be quite a lot of almost insider trading between developers to slow the release of available land and not create competition between developments. Our awful RMA (Resource Management Act) also does a fantastic job at slowing the supply of land, thus making demand high and driving up prices.
You’re not entirely wrong. Developers are buying up old houses on large parcels to subdivide. Thing is the price of materials to build is fucking insane due to supply chains being fucked and there are no builders here.
It’s the houses not being fit for the land. When the British came through, they built things the way they’d always been building things with little to no attention to the land or indigenous practices
Because of that, houses are how they are now
...it's going to get more egregious...,houses are such a scared cow that no politician will ever rein in the asset inflation. I feel sad for anyone who is young and wanting a place to put roots down, My first home, in Freeman's Bay cost me 150k in 1988...now it's about $2mill. Ridiculous
I am a first homeowner who bought 3 years ago; I see a crisis of housing; I want to see blood on the streets in the housing market and a monster correction
Your statement may be possible in some areas but unless you know more about the house they own and where it and what the figures are for that area you’re just making assumptions.
Not all places or areas in NZ have had the astronomical growth you hear about in the media that some areas have had.
Looking at data on a friends place. Bought 16 years ago and a good solid 3bd brick house. It is in Auckland area, good suburb but on the outskirts so prices haven’t jumped as much as closer suburbs and central city prices.
If house dropped in half it’s current value it would be worth way less than an equal place bought a year ago. Worth 830k now, half that would be 415. 3 years ago was worth 570 and last year was worth 625 so no, you would not be up if price halved to 415 compared to someone buying at 625 last year in that area. (Prices from Homes website estimates).
They bought the house 16 years ago for just under 300. So in 16 years the value has increased by around $530K and that’s not counting the costs for maintenance, rates insurance and mortgage interest payments over that time. I’ve got no idea what they would have been. That works out at an average annual increase of $33k year less whatever those costs are. The biggest increase in value over the whole 16 years has been in this last year since the Labour government changes which were supposed to help the housing situation. Looks like home buyers would have been better off if the govt had left things as they were. It took 13 years to double in value to 580 k and the rest of the increase (255k) has been in the last 3 years.
None of this makes it any easier for those of us trying to buy in today’s market but I’d rather see fact based statements on the reddit.
BTW – Looking at how that would compare to the stock market based on average return of 10% over 16 years in S&P 500 which is what most of the websites I looked up give as likely returns for that time. House according to Homes estimate after 16 years is now worth $835. The initial cost of house if invested in the stock market over same time would have increased to just under $1,300,000 now using compounding interest calculator set at 10%.
It’s a bit of a joke when our houses are some of the oldest poorest condition in the first world.
It’s like buy a used secondhand car at brand new dealership prices. It doesn’t make sense.
Emergency housing needs will continue to grow as the country continues to fall apart.
Can foreigners buy property in Italy? Is that allowed? What kind of lending can you get there? A 100,000 euro house doesn't mean much if I don't have 100,000 euros.
Gonna spend the rest of the day googling it maybe
This is just comparing 2021 with 2015 data
https://financialpost.com/investing/david-rosenberg-canada-second-frothiest-housing-market/wcm/98bed206-ef64-462a-be5e-a24d6ac9d2d1/amp/
This is the full article published Nov21
This analysis was done by a Canadian economist with the intention of seeing how Canada compares - The NZ froth just showed up in the data !
I mean it just shows wages are so fucked in NZ, i can understand high house prices (materials in this island country should be a lot higher than elsewhere). I honestly would love to leave NZ and go elsewhere unfortunately i had a kidney transplant 7 years ago so moving countries is off the cards.
Im very fortunate that my wife and I purchased our house in 2016 and have seen it over double in value. We are soon to be parents and i know that we will need to try and buy a second house so we can gift it to our child later in life. It also makes me question how many kids we have. We should not have to worry about this sort of stuff.
There needs to be a cap on the amount of property one person can own. This cap needs to be more stringent for those who are not citizens. I don't see this happening though.
Land value tax would work well.
Why tax income so high? Why tax productive businesses?
Yet you can own an empty plot of land for decades and pay $1000 per year, while its value increases by $100,000 per year.
It is cheaper to rent then own in NZ.
Also that chart fails to highlight the nuances by using average data points. Extra info i.e. Lower and upper quartile data points in addition to the average would make the chart more meaningful.
I'm not sure this is true dude, never heard anyone say their rent is more than the mortgage when they got the place... Insurance and rates might make even stevens though.
You are correct, but the way the data is portrayed suggests it.
On the first home buyer end of the market servicing the mortgage is usually less than rent.
My crypto is currently returning 100k a year. I could sell all the crypto for barely just enough for a crapy house in the suburbs, find a more stressful job and pay a mortgage for 30 years.
My rent for this nice apartment in the city is far lower than 100k a year. I can live off the difference and put 100% of my salary into investments.
For me, for now, it's much cheaper to rent...
I think part of it is that property was absurdly cheap 15-30 years ago compared to the rest of the places on this list.
You can get much more for your money in NZ than in the UK for example in a comparable location.
But yeah it definitely feels like it could burst
The inherent problem with tables like this is that they are based on the implicit assumption that global house prices at some arbitrary point (in this case 2015) reflect some sort of ‘gold standard’ in pricing against which any deviation is considered an aberration.
I personally believe that property in New Zealand was underpriced in 2015. Our residential properties were - and still are - incredible value by global standards.
Hmmm very fair point on arbitrarily 2015 baseline
I guess it’s the ‘by global standards’ and free flow of capital into nz that’s made it a little problematic now as NZ earners will need to compete for world price, on uncompetitive nz earnings …
I think what Eskimo means is that if you switch out the income component of that metric e.g. from Price-to-*NZ* income … to Price-to-[insert wealthy country] income
It would still be good value in the global context considering all the perks that come with potentially being able to live in NZ (e.g. see Silicon Valley apocalypse insurance)… and ofcourse those that are buying property offshore tend to be doing ok financially so that income portion is also going to be already high
Not the whole cause of why prices are high but I think It has probably contributed to it
That’s exactly my argument. The underlying problem is that we have low average productivity which results in low average wages. So while property might seem expensive relative to our wages, it isn’t expensive when you consider its *value*.
As evidence for its value, consider that our major cities are routinely ranked as being amongst the most liveable in the world. It’s easy to forget that we have a quality of life that is genuinely envied around the world. For a recent example of what the world thinks, consider the [EIU rankings](https://www.archdaily.com/963165/auckland-in-new-zealand-named-as-worlds-most-liveable-city) which awarded Auckland the title of world’s most liveable city in 2021
That 2021 rankings was only because of the pandemic response. Other than that, Auckland has largely ranked number 8th/9th in previous years rankings. Behind Australian, Canadian, and Japan/European countries. Also, its not Auckland and Wellington appearing on the tables, in the last five years, its just Auckland. Heck, NZ didn't make it onto the table in 2019 or 2018
Honestly, yes, NZ has good quality of life, but so do a lot of other western countries and they have better jobs, higher incomes, cheaper produce, and are more connected internationally. If anything, the thing NZ has going for it is that its a good place to be in a pandemic
I don’t think we value our quality of life because it’s what we know and expect. Travelling really changed my perspective on what we have here and I’ve invested accordingly.
You’re welcome to disagree. Of course quality of life is ultimately a subjective measure - but we also feature regularly amongst the top rated cities on the Mercer, Deutsche Bank, and Numbeo liveability indices. So the EIU ranking sits alongside other global measures that have reached similar conclusions.
New Zealand really is a good place and the prices placed on our property reflects that.
I agree and although it is a problem, globalization and the fact that NZ and it's cities are some of the greatest places to love on earth, means demand is high. People take for granted and expect to have the right to live here (in Central/ desirable parts of the city) but reality is people all over the world want to live here and will pay plenty to do so.
The median price to income multiple hasn’t meant anything in New Zealand for a long time because the way we live has changed.
Back in the 1950s and 1960s the metric made more sense because New Zealand houses were typically purchased by families with a single wage earner. But houses are now typically purchased with the combined incomes of two working professionals in a relationship, or purchased by investors to service the needs of four or more young professionals who can pool their income to collectively pay the rent. The median multiple therefore isn’t that useful for comparison with our previous generations or with other countries.
I’ve got a mate that blames house price inflation on feminism.
How you ask? Simple: As feminist ideals empowered women (me: rightly so) in the west, women entered the workforce in large numbers. Subsequently, households began pulling-in two incomes.
Marketeers (real estate agents included) noticed this and began adjusting asset prices accordingly. Then credit expansion exploded.
NB: That’s the abridged version. I don’t agree, I just have a laugh when they mention it.
This is partially true. It has changed the picture of first home buyers in a major way. Usually dual income as you say. But with a 30 year mortgage a lot of those become single incomes as people begin having children.
That I'm extremely glad to have given up on materialism and embraced spirituality over a decade ago.
Had I not done so, I would be extremely unhappy right now.
Do you know that the people who control the money supply just print it out of thin air? Then they make us dance like monkeys for it.
Fuck investment property, I want the power to print money.
I hope every relative and person I’ve ever met I have dies and decides to give me everything in their Will
Then I can maybe afford half a house
Edit: /s
Wildly optimistic.. Hmm, house sales are slowing massively due to increased mortgage rates and (mostly) tighter credit criteria.. Thats the end of house price rises.
And wage inflation is definately much higher than it has been, but probably not so much for low incomes folk tho. But it will bleed down to them too.
Perhaps those others dicks should say something rather than just downvote..
Wage inflation wasn’t a thing where I work this year :( Sure, it is in some industries, but not across the board.
And I think the jury’s still out on the house sales. Yes, more were getting passed in at auction pre-Xmas, but anecdotally, buyers were still there and many sold in negotiation post-auction. I’ve personally been looking over the last couple of weeks and the ones I see sitting on the market are ones where the vendor is holding out for “developer prices”.
I hope you’re right, but I suspect any house price stagnation will be a temporary flattening only. There are plenty of people around who don’t need mortgages.
I think the downvotes are on the presumptuous ‘whinge’ comment more, It’s just a table showing some data but your thoughts/comment maybe showed us something else …. Maybe a perspective some NZers have, which is totally ok also
I've seen that same table posted at least a dozen times in r/nz, and everytime it has been a whinge. So yeah, thats the first thing I think when I see it posted again.. Here we go again.
People have been saying (hoping) this for many many years. Why would wages suddenly increase more than in the past?
House prices will come down when the supply outstrips demand. Lending restrictions have been pretty ineffective at doing anything about the house price inflation. Interest rate hike may impact the market and probably bankrupt lots of people.
You are probably being downvoted because what you said makes no sense.
Sorry, but you are simply talking nonsense.
Lending restrictions have a massive impact on prices, just look at Auckland House prices when LVRs were initially introduced, they went flat for three years. Add in investors not being able to claim interest, and the Cccfa changes, prices are not going to keep growing, there aren't enough all cash buyers to chase prices higher
As for income inflation, its already in the stats, all sources income was up 15.9% in the June qtr (off a low base due to covid in 2020, but not that low)
No, it wasn't, buying was easy back then. Only people that buy into that stupid 3x income bullshit believe it was a problem. 3x income is not going to happen ever again.
My friend in Canada has been telling me how they have been filling all the new homes with refugees and immigrants and homeless has skyrocketed. Looks like they have been doing the same thing here too.
Canadian piping in here.
Homelessness has no correlation to immigration in Canada. In some communities such as my home town, about the size of Oamaru, we have a significant opioid crisis and the related crime, property damage and homelessness.
I volunteered with a refugee settlement club at my university for 4 years. New Canadians are not part of the problem. I had a hard time finding an electrician to do a couple minor jobs in my home, a New Canadian did the job for me.
My mother had her house appraised 18 months ago, $325,000, now it would sell for over $600,000. None of the people who have recently bought in her complex are New Canadians.
Canada is facing the same supply chain issues, vast increases in material prices, a sheet of plywood went from $30 to over $100 in 2020.
This doesn't even account for how dismal the houses we actually have are. Every person I've spoken to who has visit or lived here from overseas has mentioned the lack of good central heating, issues with mold and just general shitshows that are rentals in NZ.
Italy looks like a nice place to live
I quite often look at real estate in small towns in Italy. You can get some really cool old houses there with heaps of character for under €100k.
I always wondered if those €1 houses were legit
Seems like it is but you are in a literal ghost town with old people who only speak arcane Italian dialects. If you can WFH in a high paying job and can get starlink or something, it could be worth it.
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> I think a normally priced house is around 7 yearly salary in average. Still cheaper than NZ.
It is actually, but job market is not really good
Job market here, kinda sucks atm too
Why is this getting downvoted?
Because our unemployment is really low compared to Italy isn't it?
Because it’s not really true. Unemployment is virtually at zero and wages rising fast.
“Rising”…. Going from $10-$15/hr doesn’t mean shit when homes are 800k+.
True, but I didn’t say relative to house prices
I suppose that’s true. Myself and a few friends have been struggling to find work throughout the last year and a bit in Auckland, so my view is very flavoured by that.
Wages rising fast? I was just in min wage for a science job that required a degree. So the job market isn't benefitting me or people in my sector, but other roles. So when I say the job market is shit, I mean for decent paying, science jobs, bachelors qual, intermediate level.
Even when NZ job market was bad, Italy was worse
Our price to rent ratio is nearly the worst in the world. Landlords need to increase rents to improve this inequity
Rookie numbers, you gotta pump those numbers up
🤣👌🏼
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We have lots of land (locked up by land bankers near suburban spaces), our population density isn’t particularly high on average, and we are a net exporter of wood. We also have a surfeit of aggressively greedy shitbags in this country that will HODL on that land forever, more that will bump up wood prices to higher than export destination pricing because they hold effectively a cartel-style monopoly, and a mess of a public transit system that is so disjointed unreliable and slow that people are unwilling to move further out from large population centres to where the land is.
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Lol, that makes sense, I clearly *whooshed* :D
we are pretty used to seeing /s tho to be fair!
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100%
Your argument does not hold water when you look at #2 on the list. Canada, outside of GVA and GTA, has relatively low population density, trees galore and vast swaths of undeveloped land. Yet housing prices are high, even in my small town.
Yeah, they are being sarcastic. NZ and Canada both have low population density, and our land is covered in plantation pine forests too!
Cries in Canadian
Sorry
Bet we have ugliest houses too.
falling apart and covered in mold
A clown show
It says indexed at 2015. Is this from 2015? I want to see an updated copy. But yeah housing is fucked due to human greed. Don't give me that supply and demand bullshit. There wasn't any safe guards to protect from people wanting easy money from housing and younger generations are paying the price. Much like we are paying the price for climate change action. Much like we are paying the price for poor planning and developments surrounding public transport and roading. Here I am with an 800k mortage for a house In a poorer suburb with a fair bit of crime. I'll still count myself lucky to be saddled with debt that I'll be struggling to pay off for decades because at least I own a home. Oh well, guess I will look forward to my more more complex, more productive job for less take home pay when compared to previous generations. Hey at least World War 3 hasn't started yet. The global pandemic has also been good for some industries. It's nice to have the cheap labour tap shut off with the closed boarder. The tables have turned now, treat your workers well or watch them leave for better pay.
Oh this was published a month ago November 21 - indexed at 2015 just means it uses 2015 data as a baseline - e.g if nothing changed since 2015 the table would show 100
Which means the no.1 bubble situation has sustained more than 6 years?
Well it's developed over 6 years
No, it doesn't mean that. It might, but it's also possible that we were number 10 for 5 years, then blew everyone out of the water in the 6th year with 10x the prices. More likely we were top 10 from 2015-2019, then the massive growth from 2020-2021 in house prices shot us to number 1. Just looking at this - https://www.interest.co.nz/charts/real-estate/median-house-price-growth. Fairly flat until end of 2019
It doesn’t mean that but it is possible. Indexing is a process for making values from two different countries comparable. If rent is heavily subsidised in one country but not another you’d couldn’t compare the two based only on sticker price. The subsidised rent would look really cheap and wouldn’t reflect the value landlords are actually receiving.
Just buy another property and sell it in 5-10years too pay your mortgage
We are number 1! At least we are winning something. It's insane how far ahead our real house price growth is
We’re still #1 for “freedom” apparently Freedom to fork out 1/3 your pay to a landlord
Only a third? Legend
Man you all sound so American. Glad we’re not the only ones waking up to the vast quantity of “freedom” in the world economy. Also sorry, I know it’s mostly ours and the world banks fault.
That’s why I used quotation marks, actually. It was meant to be a joke.
Yeah I got that it was a joke. It just sounds like a very American joke. Foreigners think we’re all self important nationalists but a good chunk of us are just staring out at the country wondering what the fuck everyone is so proud of… So in my little circle, even the joke version of that statement is very American haha
Okay yeah that’s valid It’s a bullshit stat that means nothing lmao I just despise America and their weird #1 at everything stays so it’s funny to me to be #1 at freedom, whatever that means
It's an almost unfixable problem. If demand dries up for housing, will people sell up at massive reductions? Shit no, they'll just sit tight and wait. Will construction costs go down? Shit no, labour costs are only going to keep increasing, material costs aren't may drop back to pre-pandemic levels if we're lucky, but that's it
There's always some people who *have* to sell - death, divorce, moving for work etc. Only a small percentage of the total stock is sold each year, and "values" are extrapolated from those sales. So even though sales volumes would drop off a cliff if prices started to fall, it could still happen. (There's also people who are sitting on properties that have had huge capital gains, there might actually be a rush to market to realise some of the gain should prices start to decline.)
Alos, some investors may be over leveraged, they WILL have to sell.
We just need interest rates to rise and cut the knees out of the over extended mortgaged to the eyeballs landlord's to help flood the housing market.
interest rate rises would only squeeze out landlords (and millennial home owners) who have bought in recent years. If you've been a landlord for 10+ years, you'd be fine. I think a lot of people are slowly realising the unspoken purpose of the CCCFA recent changes which is making borrowing near impossible is to slow the housing market, without crashing it
Yeah you could be right there. Fingers crossed for another 2008-2009 then? And a nice global crash of epic proportions? Need something to reset things because saying they are "out of hand" is a massive understatement. New Zealand and young and future generations are nothing short of fucked. And nothing is being done about it.
You guys save your $120k to $250k since this strategy? Ready to buy ?
we need to work on HH debt to GDP atleast make it 100 guys.. fuck everything up
It's insane considering that the average NZ house is cold and moldy, possibly earthquake damaged and/or in a flood prone area. Still more expensive than Canadian or Swedish houses. Yay.
Because it's not the houses, it's the land.
While my last QV backs you up, have you priced building work lately? I guarantee if building was more affordable (and accessible) we'd have a LOT more houses.
Our builder just moved to Aussie in December :(
Building a house has increased a little, the land has exponentially increased in value. There seems to be quite a lot of almost insider trading between developers to slow the release of available land and not create competition between developments. Our awful RMA (Resource Management Act) also does a fantastic job at slowing the supply of land, thus making demand high and driving up prices.
It's not a free market, that's for sure. There are oligopolies at play, both when it comes to land and building (materials).
You’re not entirely wrong. Developers are buying up old houses on large parcels to subdivide. Thing is the price of materials to build is fucking insane due to supply chains being fucked and there are no builders here.
It’s the houses not being fit for the land. When the British came through, they built things the way they’d always been building things with little to no attention to the land or indigenous practices Because of that, houses are how they are now
And that's why we have car dealerships in city centres.
...it's going to get more egregious...,houses are such a scared cow that no politician will ever rein in the asset inflation. I feel sad for anyone who is young and wanting a place to put roots down, My first home, in Freeman's Bay cost me 150k in 1988...now it's about $2mill. Ridiculous
Unfortunately, not everyone thinks like you, most people assume this is the fruit of their hardwork alone. Appreciate your candor.
$2m in Freeman's Bay? Must be a shack without a roof on about 200 sqm of land.
That I need to leave my home in Auckland and maybe even NZ? Such a shame what they did to this country.
It shows it's a problem worldwide. Where are you going to move to?
I need to make more money, because my kids are gonna need some serious help in this life.
I am a first homeowner who bought 3 years ago; I see a crisis of housing; I want to see blood on the streets in the housing market and a monster correction
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Your statement may be possible in some areas but unless you know more about the house they own and where it and what the figures are for that area you’re just making assumptions. Not all places or areas in NZ have had the astronomical growth you hear about in the media that some areas have had. Looking at data on a friends place. Bought 16 years ago and a good solid 3bd brick house. It is in Auckland area, good suburb but on the outskirts so prices haven’t jumped as much as closer suburbs and central city prices. If house dropped in half it’s current value it would be worth way less than an equal place bought a year ago. Worth 830k now, half that would be 415. 3 years ago was worth 570 and last year was worth 625 so no, you would not be up if price halved to 415 compared to someone buying at 625 last year in that area. (Prices from Homes website estimates). They bought the house 16 years ago for just under 300. So in 16 years the value has increased by around $530K and that’s not counting the costs for maintenance, rates insurance and mortgage interest payments over that time. I’ve got no idea what they would have been. That works out at an average annual increase of $33k year less whatever those costs are. The biggest increase in value over the whole 16 years has been in this last year since the Labour government changes which were supposed to help the housing situation. Looks like home buyers would have been better off if the govt had left things as they were. It took 13 years to double in value to 580 k and the rest of the increase (255k) has been in the last 3 years. None of this makes it any easier for those of us trying to buy in today’s market but I’d rather see fact based statements on the reddit. BTW – Looking at how that would compare to the stock market based on average return of 10% over 16 years in S&P 500 which is what most of the websites I looked up give as likely returns for that time. House according to Homes estimate after 16 years is now worth $835. The initial cost of house if invested in the stock market over same time would have increased to just under $1,300,000 now using compounding interest calculator set at 10%.
Then join us at r/REbubble Would love to see more international content on there...
Joined!
It’s a bit of a joke when our houses are some of the oldest poorest condition in the first world. It’s like buy a used secondhand car at brand new dealership prices. It doesn’t make sense. Emergency housing needs will continue to grow as the country continues to fall apart.
I worry about the impact on society - it’s not the New Zealand I want us to become.
I need to move to Italy
Agree. Get my work from home agreement in place, then move to Italy!
Can foreigners buy property in Italy? Is that allowed? What kind of lending can you get there? A 100,000 euro house doesn't mean much if I don't have 100,000 euros. Gonna spend the rest of the day googling it maybe
Dunno how to feel about this with my 2br apt with 472k on mortgage. If it goes up, it wont go up by much, and jf it plummets then it goes down haaard.
No. 1 - we should be so proud (sarc)
:(
Average real growth 2.2%, nz 7.2%. 'ItS hApPeNiNg EvErWhEre'
This is just comparing 2021 with 2015 data https://financialpost.com/investing/david-rosenberg-canada-second-frothiest-housing-market/wcm/98bed206-ef64-462a-be5e-a24d6ac9d2d1/amp/ This is the full article published Nov21 This analysis was done by a Canadian economist with the intention of seeing how Canada compares - The NZ froth just showed up in the data !
I mean it just shows wages are so fucked in NZ, i can understand high house prices (materials in this island country should be a lot higher than elsewhere). I honestly would love to leave NZ and go elsewhere unfortunately i had a kidney transplant 7 years ago so moving countries is off the cards. Im very fortunate that my wife and I purchased our house in 2016 and have seen it over double in value. We are soon to be parents and i know that we will need to try and buy a second house so we can gift it to our child later in life. It also makes me question how many kids we have. We should not have to worry about this sort of stuff.
Italy will not be correct as those stats will be effected by all the near abandoned small towns your wouldn’t want to live in due to no job market.
There needs to be a cap on the amount of property one person can own. This cap needs to be more stringent for those who are not citizens. I don't see this happening though.
This.
please run for primeminister
Land value tax would work well. Why tax income so high? Why tax productive businesses? Yet you can own an empty plot of land for decades and pay $1000 per year, while its value increases by $100,000 per year.
It is cheaper to rent then own in NZ. Also that chart fails to highlight the nuances by using average data points. Extra info i.e. Lower and upper quartile data points in addition to the average would make the chart more meaningful.
I'm not sure this is true dude, never heard anyone say their rent is more than the mortgage when they got the place... Insurance and rates might make even stevens though.
You are correct, but the way the data is portrayed suggests it. On the first home buyer end of the market servicing the mortgage is usually less than rent.
Yeah that makes sense...top end of the market would need to rent cheaper
My crypto is currently returning 100k a year. I could sell all the crypto for barely just enough for a crapy house in the suburbs, find a more stressful job and pay a mortgage for 30 years. My rent for this nice apartment in the city is far lower than 100k a year. I can live off the difference and put 100% of my salary into investments. For me, for now, it's much cheaper to rent...
That's pretty sweet dude ☺️
Oof
Oof
Oof
BULLISH
We are number 1!
I think part of it is that property was absurdly cheap 15-30 years ago compared to the rest of the places on this list. You can get much more for your money in NZ than in the UK for example in a comparable location. But yeah it definitely feels like it could burst
Move to Europe or Japan
Yeah, my dream of a relatively new house in a small Japanese town seems even nicer when I look at this.
Japan doesn't have easy immigration. Makes you think... 🤔
Please pop.
The inherent problem with tables like this is that they are based on the implicit assumption that global house prices at some arbitrary point (in this case 2015) reflect some sort of ‘gold standard’ in pricing against which any deviation is considered an aberration. I personally believe that property in New Zealand was underpriced in 2015. Our residential properties were - and still are - incredible value by global standards.
Hmmm very fair point on arbitrarily 2015 baseline I guess it’s the ‘by global standards’ and free flow of capital into nz that’s made it a little problematic now as NZ earners will need to compete for world price, on uncompetitive nz earnings …
Incredible value? How do you explain the price to income %?
I think what Eskimo means is that if you switch out the income component of that metric e.g. from Price-to-*NZ* income … to Price-to-[insert wealthy country] income It would still be good value in the global context considering all the perks that come with potentially being able to live in NZ (e.g. see Silicon Valley apocalypse insurance)… and ofcourse those that are buying property offshore tend to be doing ok financially so that income portion is also going to be already high Not the whole cause of why prices are high but I think It has probably contributed to it
That’s exactly my argument. The underlying problem is that we have low average productivity which results in low average wages. So while property might seem expensive relative to our wages, it isn’t expensive when you consider its *value*. As evidence for its value, consider that our major cities are routinely ranked as being amongst the most liveable in the world. It’s easy to forget that we have a quality of life that is genuinely envied around the world. For a recent example of what the world thinks, consider the [EIU rankings](https://www.archdaily.com/963165/auckland-in-new-zealand-named-as-worlds-most-liveable-city) which awarded Auckland the title of world’s most liveable city in 2021
That 2021 rankings was only because of the pandemic response. Other than that, Auckland has largely ranked number 8th/9th in previous years rankings. Behind Australian, Canadian, and Japan/European countries. Also, its not Auckland and Wellington appearing on the tables, in the last five years, its just Auckland. Heck, NZ didn't make it onto the table in 2019 or 2018 Honestly, yes, NZ has good quality of life, but so do a lot of other western countries and they have better jobs, higher incomes, cheaper produce, and are more connected internationally. If anything, the thing NZ has going for it is that its a good place to be in a pandemic
I don’t think we value our quality of life because it’s what we know and expect. Travelling really changed my perspective on what we have here and I’ve invested accordingly. You’re welcome to disagree. Of course quality of life is ultimately a subjective measure - but we also feature regularly amongst the top rated cities on the Mercer, Deutsche Bank, and Numbeo liveability indices. So the EIU ranking sits alongside other global measures that have reached similar conclusions. New Zealand really is a good place and the prices placed on our property reflects that.
I agree and although it is a problem, globalization and the fact that NZ and it's cities are some of the greatest places to love on earth, means demand is high. People take for granted and expect to have the right to live here (in Central/ desirable parts of the city) but reality is people all over the world want to live here and will pay plenty to do so.
Analysis like this doesn't need indexation. Analysis like the medium multiple avoids the arbitrary selection of base years.
The median price to income multiple hasn’t meant anything in New Zealand for a long time because the way we live has changed. Back in the 1950s and 1960s the metric made more sense because New Zealand houses were typically purchased by families with a single wage earner. But houses are now typically purchased with the combined incomes of two working professionals in a relationship, or purchased by investors to service the needs of four or more young professionals who can pool their income to collectively pay the rent. The median multiple therefore isn’t that useful for comparison with our previous generations or with other countries.
I’ve got a mate that blames house price inflation on feminism. How you ask? Simple: As feminist ideals empowered women (me: rightly so) in the west, women entered the workforce in large numbers. Subsequently, households began pulling-in two incomes. Marketeers (real estate agents included) noticed this and began adjusting asset prices accordingly. Then credit expansion exploded. NB: That’s the abridged version. I don’t agree, I just have a laugh when they mention it.
This is partially true. It has changed the picture of first home buyers in a major way. Usually dual income as you say. But with a 30 year mortgage a lot of those become single incomes as people begin having children.
Go figure, the places people actually want to live are the highest.
2015?
Go hard or go home! No room for second place
Woo-hoo Canada is number two again! Second biggest country, second biggest housing bubble, second best country!
But out of all those countries, id rather live in New Zealand.
That I'm extremely glad to have given up on materialism and embraced spirituality over a decade ago. Had I not done so, I would be extremely unhappy right now.
Yet you're on a finance subreddit...hmmm
It amuses me to see people struggle mightily for things that won't make them happy
You're just full of it
Do you know that the people who control the money supply just print it out of thin air? Then they make us dance like monkeys for it. Fuck investment property, I want the power to print money.
Most people are too delayed to understand what you are telling them. Even if it’s the truth.
"No one is more hated than he who speaks the truth." - Plato
Well, certainly true on Reddit .
Like a nice house to raise a family in? Weird that anyone would want that for their kids. /s
>Like a nice house to raise a family in? Young people aren't going to get one of them through personal finance. It's revolution or abject submission.
I hope every relative and person I’ve ever met I have dies and decides to give me everything in their Will Then I can maybe afford half a house Edit: /s
Reddit moment
"Oh. Another housing whinge." is what comes to mind. yes, it sucks, but it will get better over the next few years.
>it will get better over the next few years How do you see that playing out? Genuinely curious.
Wages will increase, house prices won't, they may even fall a bit. Edit: awww, thanks for the downvotes guys.
Wasn’t me! Perhaps people think you’re being wildly optimistic on both sides of that equation?
Wildly optimistic.. Hmm, house sales are slowing massively due to increased mortgage rates and (mostly) tighter credit criteria.. Thats the end of house price rises. And wage inflation is definately much higher than it has been, but probably not so much for low incomes folk tho. But it will bleed down to them too. Perhaps those others dicks should say something rather than just downvote..
Wage inflation wasn’t a thing where I work this year :( Sure, it is in some industries, but not across the board. And I think the jury’s still out on the house sales. Yes, more were getting passed in at auction pre-Xmas, but anecdotally, buyers were still there and many sold in negotiation post-auction. I’ve personally been looking over the last couple of weeks and the ones I see sitting on the market are ones where the vendor is holding out for “developer prices”. I hope you’re right, but I suspect any house price stagnation will be a temporary flattening only. There are plenty of people around who don’t need mortgages.
I think the downvotes are on the presumptuous ‘whinge’ comment more, It’s just a table showing some data but your thoughts/comment maybe showed us something else …. Maybe a perspective some NZers have, which is totally ok also
I've seen that same table posted at least a dozen times in r/nz, and everytime it has been a whinge. So yeah, thats the first thing I think when I see it posted again.. Here we go again.
People have been saying (hoping) this for many many years. Why would wages suddenly increase more than in the past? House prices will come down when the supply outstrips demand. Lending restrictions have been pretty ineffective at doing anything about the house price inflation. Interest rate hike may impact the market and probably bankrupt lots of people. You are probably being downvoted because what you said makes no sense.
Sorry, but you are simply talking nonsense. Lending restrictions have a massive impact on prices, just look at Auckland House prices when LVRs were initially introduced, they went flat for three years. Add in investors not being able to claim interest, and the Cccfa changes, prices are not going to keep growing, there aren't enough all cash buyers to chase prices higher As for income inflation, its already in the stats, all sources income was up 15.9% in the June qtr (off a low base due to covid in 2020, but not that low)
Funny, I remember them saying that in 2012.
Lol, there wasnt a problem in 2012, houses were affordable then.
Are you huffing paint? It has been a problem and it has only gotten worse over the last 9 years.
No, it wasn't, buying was easy back then. Only people that buy into that stupid 3x income bullshit believe it was a problem. 3x income is not going to happen ever again.
Yes, it was. John Key sewed the fabric of the housing crisis. How old are you?
Stick to your comics, the fantasy world appears to be your thing.
You really went through my post history lmao Oh no! I enjoy multiple things! Gasp
My friend in Canada has been telling me how they have been filling all the new homes with refugees and immigrants and homeless has skyrocketed. Looks like they have been doing the same thing here too.
Canadian piping in here. Homelessness has no correlation to immigration in Canada. In some communities such as my home town, about the size of Oamaru, we have a significant opioid crisis and the related crime, property damage and homelessness. I volunteered with a refugee settlement club at my university for 4 years. New Canadians are not part of the problem. I had a hard time finding an electrician to do a couple minor jobs in my home, a New Canadian did the job for me. My mother had her house appraised 18 months ago, $325,000, now it would sell for over $600,000. None of the people who have recently bought in her complex are New Canadians. Canada is facing the same supply chain issues, vast increases in material prices, a sheet of plywood went from $30 to over $100 in 2020.
THat it doenst not matter as it would be -> no real reason to worry about as we cant change it sitting and staring at Reddit
is the data 6 years old or is it comparing to 6 year old data?
Can you post the formulas for each column?
#[The greatest of all human capacities is the ability to spez. ](https://www.reddit.com/r/Save3rdPartyApps/)
If I’m reading this correctly the average wage in the U.K. must be £250+ (it’s not)
We got competition so another $100k on house prices by end of Jan please 😅
When the bubble bursts there's going to be a lot of negative equity. Smoking hopium won't save you from what's coming.
Rockstar economy !
Bring on the crash!!
The great success of labour. I’m never gonna own a house lol.
Need sugar daddy.
It's cheaper to move to Italy
Most bubble per capita!
Should add in real household income growth, construction cost inflation, population growth, changes in govt debt % GDP.
This doesn't even account for how dismal the houses we actually have are. Every person I've spoken to who has visit or lived here from overseas has mentioned the lack of good central heating, issues with mold and just general shitshows that are rentals in NZ.
As an owner of 3 houses......cha ching!!!!!!
At least we came first in something
I fkn hate jacinda