By Elizabeth Davies
The latest stats are tough to argue with. Since the Reserve Bank’s lending limits came in the number of first home buyers has dropped in 90 Auckland suburbs. The opportunity to own one’s own home is slipping further and further out of my generation’s grasp.
We’re often criticised for wanting to ‘take up where our parents left off’. The desire to have what our parents were lucky enough to have leads to members of the older generation accusing us of being selfish or bratty, and we are shamed for our supposed sense of ‘entitlement’. I won’t pretend I don’t feel the sting of such remarks.
The latest news predicts interest rates could peak at a level where a family’s mortgage is accounting for two thirds of their household income. It’s no longer a matter of working hard or being smart with your money, though of course these are both now more important than ever. It’s now a matter of making big sacrifices or accepting the seeming impossibility of it all.
People are being forced to choose between their job in the city or their house in wherever they can afford. They are being asked to choose if they want to buy a house now or have kids. It’s no surprise that women are choosing to have their first child later and later as families desperately scramble to achieve that elusive state of ‘financial security’.
The possibility of never being able to afford to buy my own home is an incredibly bitter pill to swallow. Made even harder by the fact that I was, like many people my age, brought up thinking differently.
Every parent wants the best for their child. We are raised with the mantra that we can ‘do anything we put our minds to’ and ‘be anything we want to be’. The fantasy of owning one’s own home hasn’t changed from our great grandparents to our grandparents, to Mum and Dad, to you. The reality however is barely recognisable.
As children we were sold the Kiwi dream, and now, twenty five or thirty years later, we are opening our eyes and we’re not loving what we see. Frankly, we are pissed off. We are told point blank to forget about living in Auckland, near our families, our careers and the place we consider home. We’re told to scale back our hopes, and be thankful if we can afford a unit let alone a free standing house.
Worst of all we are told that if we want better we should leave New Zealand. More often than not we are told to ‘get over it’. As the very frameworks of our domestic future are burned to the ground we are sneered at.
I know not everyone is so critical of my generation and many people I know are only able to consider buying a house because their parents are generous enough to help them financially. It would seem parents have a couple of options, swap out the bed time stories of white picket fences and big back yards to dodgy landlords, unpredictable rent and rural living or if you are able, give your kids a leg up.
If you must promise us the moon, the least you can do is not laugh as we jump to reach it.
As interest rates, housing price averages and stress levels rise, there is only one thing going down – our expectations.
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Elizabeth Davies is a 24 year-old graduate of the Auckland University of Technology post graduate journalism course. She lives with her partner in Epsom and spends her free time refurbishing vintage furniture and attempting to bake while fighting a daily battle against her bank balance. She writes a weekly article for interest.co.nz on money matters and financial struggles from a young person's perspective.
99 Comments
I agree , we did not promise anything . We struggled to buy our first property ( a dirty noisy little place above a strip of shops ) and I was just under 30 , and stayed there until we were well in our 30's . We also needed 20% back then
Its got a little harder , I will concede , becasue you are forced to save a big deposit in real cash terms
Things have changed forever , and we are bringing in new migrants with money to keep ordinary Kiwis out of home ownership
Quote from Andy Xie in Bernards top-10-today at #6
Rich people usually get rich in China for doing something illegal
If it's illegal the probability is it's un-taxed
And that's why they're getting it out of China and into someplace else, as fast as they can
Made today - gone tomorrow - fast money
Totally agree with this article, making plans to start a family out of Auckland now, will miss the best harbour in the world. Now just waiting for the BB to finish their lattes in the sun, wipe the muffins crumbs off their herald and start giving you what for as usual Elizabeth....
You can buy your first home as a rental outside of auckland and still live (rent) in auckland.
This part of the property cycle is not when you would want to buy in auckland anyway (prices already stretched pretty thin); you can rent a place far cheaper than buying in auck, while setting up a rental outside of auckland where tenants cover all mortgage payments and capital gains (from the ripple effect/ catch up effect a la 2004-2007) can be used as a deposit for your own auckland home. Auck prices would need to go up at a rate of 5x your rental property for this to not work; At this point its likely certain cities that dont have excess supply such as p.n will exceed auckland price inflation over next 2-3 years
The "ripple effect" you often refer to won't happen this time Simon. Auckland is in its own QE/stimulus fed bubbleland. Wouldn't PIs around the rest of the country have already bought up all the so called bargains you refer to, or do all PIs live in Auckland? This time the rest of us outside of Auckland continue to live in NZ's economic reality of excessive indebtedness,flat to negative house prices and already rising interest costs.
This time it's different?
So as an owner of say 2 properties in auckland, 1mill worth in 2010, now 1.4mill worth, that extra 400k just sits there and doesn't have any effect on markets outside of auckland?
What of the property investor with 10 properties in auckland in 2010?
What foreign money is to Auckland, Aucklander's increased equity is to the rest of the country.
As interest rates increase and auckland prices rise quicker than rents, the limiting factor becomes income derived from the property. Banks won't lend another 500k for another auckland property not because the deposit is not there (400k increased equity affords 2mill worth of property at 20% deposit), but because of lack of income from the auckland properties to service increasing interest rates.
So PI's seek higher yielding cities (where they can borrow full purchase price and rent covers almost all the property related expenses). The secondary cities are also attractive as they have not risen in value yet. Think of it as water filling an irregularly shaped hole; The lowest points are filled first (gravity makes these points most attractive to a flow of water), once filled, the water flows to the next lowest points... and so is the flow of money....
From looking at a number of cities palmy looks the most attractive (purely from an investment p.o.v).
University there will get some of the foreign inflow as some prefer lower cost of living in p.n (rent a room for 80-100/week cf auck at 180+/week; free buses for students there too which has been pretty successful).
Strong dairy farming in region also stimulates the employment not only directly but also through retail and services that get support from money flowing to farmers.
Can buy a 3 bedroom on 500 sq m + land at low 200's and rent for 300/week. Last I checked there was a total of 16 four bedroom's for rent in the entire city, so if you can convert a 3 bedroom into a 4 bedroom you'll see closer to 350-400 week return and have your choice of tenant.
Close to 8% gross yield as is, 9% for a 4 bedroom. Significantly better than auckland in any case.
Adding a bedroom, re-painting some ugly wall paper can get that return better still, some people love doing this, others not so much. I have achieved this recently in p.n and looking to do it again. I lock in for 4-5 years so have certainty around the positive cash flow so the investment makes sense even without capital gains.
The main reason I like p.n is the lack of listings. It has one of the lowest listings per capita going around (320 listings Vs. 82,000 population, 230 ppl per listing, compared with 134 people per listing in auckland), even more of a shortage than auckland based on this measure. This makes it a very tight market so unlikely to see price falls, more likely to see price gains. Any gains ofcourse being a bonus...
So we're all expected to become landlords?? All we want is to own our home and build a future - not become the opportunist that has created this mess. There is growing generational resentment in New Zealand which is looked at with arrogance and ambivalence by many baby boomers. I've exeprienced everything covered in this article - there is little concern for the young in this country unless it's their own offspring. This anger is not being measured in archiac landline telephone polling or reflected in the conservative NZ Herald but those in our age group know how strong it is. Bring on the election.
"All we want is to own our home and build a future - not become the opportunist that has created this mess"
You mean you don't want to have to think for yourself and figure out how things work by putting in long hours of research and working hard at an area to get you where you eventually want to be (albeit not within the next 24 hours!).
You just want to own your own home in central auckland and think it's your birthright to do so?
I am thinking - I evaluate all the information out there, in particular information from the OECD that has recommended a CGT to help deal with rising inquality, I look at IMF reports that say housing affordability in New Zealand is one of the worst in the world, I examine New Zealand's conservative news media that is simply trying to peddle houses to keep their property advertisers happy and I rebut suggestions from the likes of you that makes an absurd assumption that I am looking in central Auckland and that it is my birthright to do so. I'm from West Auckland and house prices went up 15% there last year - anybody in their right mind knows that this is ridiculous and anybody that defends it is simply guided by self interest (you perhaps?). It costs half a million dollars to buy a run down house in Kelston - anybody from out west knows this is plain wrong and anybody that's lived overseas knows how ripped off we are here in Auckland and how much of a tax free ride overseas investors and property speculators are getting courtesy of the NZ government.
Your claim of entitlement is disdainful and ignorant, I work hard and I'm prepared to make sacrifices but suggestions I should buy in Huntly and commute to the CBD are repugnant - especially in a city that has neglected public transport for so long, again largely due to self-serving conservative factions that are regressive and stingy. You can have your real estate ponzi scheme, I'll invest my money elsewhere, get what I want from NZ and then move back overseas. There's too much small mindedness and greed in this part of the world.
right on value added. right there with you, brother, screw this housing market for a game of soldiers. even though i am a homeowner and have 'benefitted' by our crappy old villa exploding in valuation <but, of course, this is on paper only as you don't book the profit unless you exit the market so unless you're selling up and not buying another house all it does is put your rates up and perhaps let you pretend you're a genius in hindsight when really it was pretty much dumb luck>, i agree with everything you've said. btw i'm gen x.
I generally only engage in arguments when the other person is bringing new information to the table that might make me want to reconsider the financial positions I've taken or are planning on taking.
Nothing you say is new. In 2006 after I first read hughs housing affordability report showing n.z was serverely unaffordable I already knew everything you keep saying. I even wrote a letter to the minister in charge of the rma citing hughs doc at the time.
I haven't been buying auckland property as I believe over the next 10 years returns will not be great as the issues hugh talks about are slowly addressed there. Investors book losses from day one paying such high prices and not getting the rent to cover it. The prices are bid up by emotive first home buyers who stress about being locked out of the housing market, not by rational thinking investors like I strive to be.
Prices won't fall 20% in auckland ever as there are too many frustrated angry emotional people locked out of the housing market sitting on the sidelines waiting to buy anything they can afford. What will happen is over a long period of time price appreciation will be at or slightly below inflation, slowly restoring some normality to prices there when compared to incomes. 20 years was one time frame nick smith mentioned for this to happen.
Twenty years if house price rises are zero, zilch, nada while income growth is 3% every year for twenty years!
Much, much longer if house price "apreciation is slightly below (wage?) inflation".
Simon you are doing the same as the National government. Trying to neurtalise the issue, kick it to touch. But it is not working. Kiwi's are p...o...
If Elizabeth's generation wait twenty years for affordable housing. They will spend the prime of the there life in limbo waiting for a affordable place to live. What a waste....
Agree.
It's an unfortunate situation brought about from planners acting on framework that serverely restricted the ability for developers to produce affordable housing. It took 20+ years of this city planning to create the mess and will take about that to slowly correct it. I'm not debating the merits or idealistic basis of this, merely stating reality in case you want to make better financial decisions based on this.
Actually Simon that is not so far off what I believe. I think if NZ reformed its city planning so that new builds were cheaper than existing houses it would take a decade or more for the market to adjust. Existing home owners would prefer to not sell than realise a loss. The sale of existing homes would be slow while the market for new builds would be a lot busier. Eventually the market would adjust and existing 'do it ups' suburbs would become busier from real estate sales perspective.
Elizabeth it takes a while to find your 'voice' to get the tone right so that people start to listen to what you say rather than critiquing your personality. I think you are getting there. Try to be a little less obvious in your self justifications but otherwise eight out of ten.
I think you will be fine regarding sorting out your domestic arrangments -finding a stable place to live near to family, friends and work because you obviously work hard and are clever. The problem though is the statistics show many of your generation, your friends will not be joining you. They will either be stuck in unstable rental living arrangements or will bugger off overseas.
Baby boomers: what was your house price to income multiple of your first house?
I've put an offer on my first house and my house price to income multiple is 5.9. Feeling smug now? And don't pretend that your 20% interest rates were just as bad - mathematically a low income multiple is better.
First off, Elizabeth, stop colluding in the propaganda that's being used against you. There's a false narrative being put around, and accepted by the unthinking and privileged, that you wanting a liveable return on your skills and labours, including your own slice of bog-level suburbia and the ability to start a family, is asking for the moon. Bullcrap that's asking for the moon. The truly entitled, the parasites and leeches who want to get their fangs into the lovely blood-sack that is your lifetime earnings, and coast along on your efforts, are misrepresenting you and those like you as spoiled and entitled, so that you'll be embarrassed into shutting up and accepting their exploitation of you and your skills. Don't fall for it, and stop perpetuating it.
May not be the moon, but it's quite a lot more than countless women and only a slightly smaller number of men throughout the world and throughout history could ever have begun to dream of.
Yes, in the specific matter of house prices to earnings ratios this generation of New Zealanders is less fortunate than the one that preceded it. It's more fortunate than the previous generation of New Zealanders in many other ways, and it's more fortunate than many, many others of the same generation in many other countries. Maybe try to keep a sense of proportion and count your blessings?
Don't forget the census figures show that less youger people in percentage terms own their home compared to years and this decline has been noted for several censuses. So it is not just the house price to income figues that is the specific matter.
It might help to thank 'thank god we are a not a poor banana republic', but then again maybe that sort of thinking would get one thinking, is that where NZ is heading....
Elizabeth.....I think it is purely how you have interpreted "kiwi dream". As a parent with similar aged children to yourself I have told my kids they can do anything if they put their minds to it.
Previous generations were highly controlled and most of those controls have been broken down. You have the power of equality in /employment/wages and ownership over property etc that previous generations of females did not enjoy but had to be proactive in getting change.
Your parents generation have been responsible for stripping away all the rubbish that prevented people from being treated equally. Your generation will face different issues as a group but do not let a can't do/blame game attitude prevent you from achieving what you want in life.
A first home is always the hardest to get into......purely because it is the first time you are undertaking the task. Think about it from a different perspective......did you give up learning to walk, or read, or any other thing you would have found needed many attempts before you became proficient and mastered the task.
If you think that houses are too expensive from the point of view that you don't have sufficient income to save or generate enough income that problem is something you can overcome. But if you think they are too expensive/over valued due to restraints by Government and bureaucracy then you too can overcome those problems.
I have not witnessed any young groups or first home buyers sitting outside Councils protesting over the lack of land release for housing etc. Have the young people protested outside the Beehive? Have the young people started a petition?
You can choose to be a generation that sits back and moans and blames others or you can choose to be proactive.
Elizabeth I totally sympathise with you and I am a retired baby boomer born in 1955. One of the reasons I could retire at my age is because the three homes I have lived in were so cheap in hindsight and I paid them off as soon as I could and then invested for retirement.
During the mid 2000's I saw the baby boomers in action. They were generally debt free and assets were cheap to buy.Interest rates were low and it was the perfect storm. Some were absolute gluttons. One of my clients had 37 rentals. He was in his 50's and single and he was a professional. When I asked him how many he wanted he said he was aiming for 50. Then the gfc came along and he nearly went under as he so much debt. Only the emergency interest rates saved him and the bank let him sell them off. He did not need 50 rentals. It was a game for him. He just got his existing properties revalued and then bought more properties.No wonder prices went up in NZ when you have people like him.
The baby boomers who ripped into property are not clever. Rather they were lucky. Prices were low in 2002 or so and it was easy to buy into them if you had equity and a good income.I feel sorry for my children and my grandchildren to come. No wonder so many parents and grandparents feel obliged to help their children get into property. Those who do not have comfortable parents or grandparents are generally stuffed unless they have good incomes. Interest rate increases will slow things down and any world crisis will cause all markets to rock. Keep saving if you can as you do not know what tomorrow will bring. Life is certainly full of suprises and opportunities.
"...He did not need 50 rentals. It was a game for him. He just got his existing properties revalued and then bought more properties.No wonder prices went up in NZ when you have people like him.
The baby boomers who ripped into property are not clever. Rather they were lucky. Prices were low in 2002 or so and it was easy to buy into them if you had equity and a good income."
What profession was he in?
How do you know it was luck? Is that not just you projecting onto him as for you it was infact luck.
Has Buffet been lucky for the last 55 years when he consistently brought assets that in hindsight were 'cheap'?
Oh come on now Simon, no need for name calling. It just seemed rather amusing to see one who claims to be superior on economic matters not being able to distinguish between purchasing an item and bringing one. Lucky for you there's no intelligence test for property speculators!
4583 results on TM property search for properties in Auckland under $500k. 1951 houses. ANZ are actively pursuing lending to people with 10% deposit. If you can't save $50k and settle for a house worth under $500k I think you need to revisit your expectations. If you want to be central you might even have to settle for a unit!
Since when was $500k cheap? Median Auckland household income is $76,500. With a 10% deposit, you would need 5.9 times median household income. Assuming earnings are split evenly (the lowest tax position) then this median household makes $5139/month after tax and Kiwisaver. The mortgage at 30 years at 6.74% (includes 0.75% low equity premium) would be $2916/month or 57% of net income.
Then add in the following monthly costs:
$156 for rates
$40 for water
$150 for electricity
$67 for house insurance
$55 for contents insurance
$10 for rubbish bags
$416 (1%/year) for maintenance
$324 for bus fares ($4.05 each way, 5d a week for 2 people)
$600 for food
Now you are at 93% before any discretionary spending. Just hope mortgage rates don’t go up, no-one loses their job or wants to have children
Note: No mobile/landline/internet/car/clothes/haircuts/holidays/medical costs/dental costs/life insurance
Yes, forgot about that. Assuming this household has two lots of debt, they would be repaying at $383/month. Sticking this into the above leaves $22/month for discretionary spending. This is 37c each per day.
When interest rates go up tomorrow, they will have a net -$53 remaining.
$76,000 is more like the average wage which is of course, calculated by adding up all the wages of all the people and dividing them by the number of people. The median is a whole different kettle of fish and is the figure that represents what most people are earning and that is more likely to be $40,000 or possibly even less
Just a small correction there -- the median is the middle value, with half of the data points above it, and half below. The mode is what you're referring to in your second sentence: the most commonly-occuring value in a dataset (in this case, the most commonly-occuring income bracket).
The $76,500 number used above is the median Auckland household figure from the latest census. This is the most relevant one to use when looking at house purchasing.
Note that only 36% of households earn over $100,000. And this group is unlikely to include many first-home buying households.
Also note in my example that although they have a median income, they are looking to buy a below-median house. The Auckland median house value is $637,000.
When the cost of housing oneself has increased so much while earnings have not, there IS a problem for far too many. I recall a time when even the guy driving the rubbish truck could afford a modest home. No more. It DOES need sorting for generations coming through and if it isn't then every accusation aimed at my generation is utterly justified.
Hi Elizabeth, as NZ grows and matures as a country the typical stages Kiwis live through is likely to change. The best way to 'crystal ball' your future is to look at other older western cities around the world. London is a great example, young British people often move to London to kick start their career, they live in small flats and apartments that often cost as much as full size houses/sites out of the city. Around their mid-thirties they sell their London apartment/flat and buy a house in the country or the commuter belt so they can fit the kiddies. My guess is that is what life in NZ will start to look like as land prices rise, population increases, etc.
Yes but in London you're earning pounds and paying less for your cost of living. Houses in NZ are massively overpriced and this is the issue. And we're not against living in apartments, it's just that they're built to such a poor standard in New Zealand - reasonably priced apartments are often leaky and they can't even fix the problem. It's embarrassing.
Mmm... yep, that's exactly what we want to aspire to and benchmark ourselves on... London's property market and lifestyle.
You might have missed this, but a lot of Kiwis, myself included, returned to New Zealand because we couldn't stand the sceptic living conditions and property rat race in London and preferred the lifestyle that we left here in NZ.
While, granted, we're a western country and Auckland wants to establish itself as a world-class city I think a large number of us would prefer not to benchmark ourselves on the London experience.
London does a lot of things well... living conditions are not one of them, unless you like travelling 45min to have the pleasure of planting tomatoes in your postage stamp size allotment. Grim. Very grim.
http://i1.kym-cdn.com/photos/images/original/000/111/795/Image1.png
Yes. Septic.
I think I forgot to mention I left London because Poms are also extremely anal retentive and difficult to work with... you don't happen to be one do you?
Anything else?
Most of the (sensible) young are doing all of the above. Look at the sums kiwimm put up-thread to see how large the challenge is for most young today.
Beer at pub $5 vs. Auckland house ~$600,000. For that price they could buy 120,000 beers. The young must be drinking a lot of alcohol if this is the reason they can't afford a house!
Ivan - I don't know what the hell pubs you are going to, but the numbers from where I stand (and talking to bar owners) are WAY down, and at $10 a beer these days it's no wonder. My observation when going out is the stark lack of younger people about - it's mostly over 45s. Incidently, I would love to see the numbers of pub attendences from a few decades ago. Every anecdotal story I've ever heard talks of pubs full-to-bursting, pretty much every night of the week.
"Worst of all we are told that if we want better we should leave New Zealand"
You are looking at this the wrong way. It's like someone from a small town saying worst of all if I want to become a doctor or lawyer I would have to move to the city to go to university. It's temporary, just as you can move back to a small town once you finish uni, you can move back to NZ once you have saved some money.
In this so called global world we live in some options do stack up better than others. Buying a property at the present time in Auckland is one of the worst options available. I'm also Gen Y and empathise with your articles, keep up the good work.
Just get on "The Block". 50/50 chance that fixing up a dead beat house in Awkland will pay dividends.
You might even get famous.
Personally, you can keep it.
Or start at the bottom and work your way North.
I have just met a couple who think Stewart Island is the place to start, they were from North of the Bombays too..
They were elderly, so go figure, tis not just the young with a vision.
It's tricky. Though 24 is young. Us gen X never considered buying houses 'till approaching 30. Go in 1/2 or 1/3 with friends and a good legal arrangement as close to CBD as you can, then DIY it every second weekend for a few years. The Unitary Plan should allow a granny flat in existing houses, so you'd potentially be able to have 2 flats in one house. Land is better than apartments long term. I reckon near the railway heading west is a good bet.
Unless you get into a reasonably good area property is probably not a very good investment anyway. Once you take all expenses, maintainence and inflation into account anything less than a doubling in price over 10 years means you've probably lost.
Ah the old days, life was simpler then, the roses rosier, the virgins virginier etc.
These so called 'better times with no internet' in which I apparently had my start?
Sounds like you would probably be suprised at how old I am not.
In any case the, wading through all the blather, the intelligent person will realise that all that really exists is the present moment.
SK
This article was a great read, to the author: thank you and please write more!
I'm somewhat resigned to the fate that no amount of pragmatic budgeting will see me into home ownership, while working in Christchurch as a young skilled labourer. I'd need to be in a role beginning with C to think about owning a house here. :-/
Knowing that ideological change towards the political right is what gave rise to this, can a more modern ideology offer a solution? I note some commenters lack the altruism to consider the synthesised folly of their peers, they need not reply.
I stand to be corrected but, won't beat around the bush either, laissez-faire policy such as the lack of a CGT, is what leads us into becoming a landlord-nation. Is this view correct and if not, why not? Without a CGT or similar mechanism, I see NZ as having an increasing amount in common with Bermuda, the Turks and Caicos Is (which interestingly, went back to British soverign rule for a while after the GFC), and other tax havens.
Should we blame the purveoyrs of deleterious fiscal policy? Or do you blame the market and appeal to higher authorities like the invisible hand? When market failures are present why do they fail to be remedied in policy by this government?
I don't have the answer - if I did, I woul not be sitting where I'm sitting....
What I do know, is what's NOT working. Free market policies don't, as they assume that everybody starts from a level playing field.
When companies are left to determine who gets what, then the rich will always get richer and the poor will always get poorer. Money begets money.
Unfortunately, for the have-nots....
Free market policies assume no such thing. Companies do not determine who gets what. The poor are not getting poorer (inequality hasn't risen in NZ for several years). And the Auckland housing market is not free; it is heavily constrained on the supply side by planning regulation. Apart from that ...!
but most typical, corporate/heirachical organisations begin with a charter. from what I gather, profit is nearer the top of that charter, and salaries to workers go beneath that. therefore we may conclude companies do decide 'who gets what'.
it's not a problem with the right to make profit, i see more of a lost opportunity in that there are more modern organisational models than this; some of which do not have a deleterious effect upon society. i'm yet to meet a business or process improvement person with knowledge of the Rochedale principles however...
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11192796
"[ Analysis ] does show is that during the late 1980s and early 1990s, income inequality increased quickly. But between 2004 and 2007 it decreased, although not to pre-1987 levels. The ministry's analysis puts that decline from the mid-90s down to Labour's Working for Families policy. But since 2010 measures of income inequality have gone up and down in the aftermath of the global financial crisis and Canterbury earthquakes. The ministry concludes it is too early to say whether the trend is higher or lower...
With no clear trend, the ministry analysis doesn't support Labour's view that inequality is increasing but Labour argues that work doesn't tell the full story. It argues the data it is based on doesn't include much of the income more well-off New Zealanders get from realising assets. It is exactly that income Labour would target with its capital gains tax...
...What the ministry's analysis does point out is that wealth is distributed more unequally than income."
Plenty of houses in North Shore and Papakura for under $450k, i suggest you go and live there. Once you have saved enough you can then move to a suburb that you aspire to. I dont know anyone in my parents generation who just moved into Remuera. Mine lived in Pakaranga and Howick in he 70's. Stop moaning and start saving.
The uncontrolled growth in the housing market is in the process of not only damaging the general economic good, it is also harming society by removing the stabilising influence of the majority being property owners with a stake in being good citzens. We are effectively disenfranching our younger people and lower income earners. Other countries control rsidential property speculation and the world has not ended. Might be an idea if we do, too, if we want a stable, safe country to live in.
Agree.
It's an unfortunate situation brought about from planners acting on framework that serverely restricted the ability for developers to produce affordable housing. It took 20+ years of this city planning to create the mess and will take about that to slowly correct it. I'm not debating the merits or idealistic basis of this, merely stating reality in case you want to make better financial decisions based on this
I grew up in the 80s in Auckland (way out west)
driving our bikes with bare feet no helmets, mullets ripped jeans and getting home as the sun came down.....great times.At school we were told you can be anything you want to be- astronaut , prime minister, all black... We were probably the generation who had the most choices and options- and for some people this is where the problem lies - too many possible paths to follow..
My dad gave me the best advice- don't work for anyone else-been self employed all my life and that I feel has put me ahead of my clock watching/salary loving peers
Advice for Elizabeth- plenty of lovely houses in west auckland- that are affordable. Set a goal and then set a plan. I would buy, renovate and upgrade my way into Central Auckland if I was in your position. It would probably take ten years.
dont be envious of the boomers- it's their time :)times will change once the next generation of young business men and women start getting hold and control of the keys to power.
hi. Yep didn't listen to the naysayers picked up a number of good rentals. Took the risks and now equity increased 50-65% in all my properties. All now cash flow neutral- pay for themselves. Haven't bought since mid 2012- numbers don't stack up- always have an eye out. Next buying round maybe 2-3 years time in next flattening period. In the meantime my daytime business is in a growth phase (using some of equity to do this) but hard to find good motivated staff ;)
You starting out in the property game in Auckland?
Yeah good work with your timing there.
I bought in p.n recently as can get better yields there. Place is paying for itself and putting about 60 bux a week profit into my pocket after paying for rates and insurance so little risk and skin in the game incase history repeats and the auckland price rises spread (something tony a mentions a lot) as happened in 2004-2007 where p.n was going up at 20% p.a.
Recon I can add a bit of value and make it appealing to a fhb who can get a welcome home loan up to 300k in p.n without much deposit (paid around 200k, so be happy selling for 300 in a few years if I want to get into auckland market at that point, or keep it and use equity from an optimistic valuer as deposit). In the process of buying a second in p.n while these lvr restrictions are making buying good. Very low number of listings there both for sale and rent so looks like a promising region.
Certainly recon its more risky having no property at all to your name in a growing country like n.z
Always good to see someone with a plan and their mind made up. For me Auckland is where I invest- with the jobs and immigration
I recommend you look over at Propertytalk.com - there was a thread on PN recently. Interest.co.nz is great for macro-economic views, interest rates and hearing about how the world will end due to peaks not for property investors ;)
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