| interest.co.nz | ||||||
| First Home Buyers Report | ||||||
| July 2021 | ||||||
| FHB share of market | ……………. | 40.7% | ||||
| Number of FHBs | ……………. | 2925 | ||||
| Average FHB purchase price | …………….. | $685,897 | ||||
| Average FHB mortgage | …………….. | $548,718 | ||||
| Average FHB fortnightly mortgage payment | …………….. | $1,036 | ||||
| Share of FHB loans above 80% LVR | …………….. | 35.1% | ||||
| Figures are interest.co.nz estimates based on RBNZ loan approval data and REINZ sales data. | ||||||
The number of first home buyers purchasing their own homes remains at elevated levels but unfortunately both the prices they are paying for those homes, and the amount of debt they are taking on, is at record levels.
According to the Reserve Bank, 2925 first home buyers had mortgages approved in July this year. Interest.co.nz estimates they accounted for 40.7% of property sales during the month.
Both the number of mortgages approved and the share of total sales to first home buyers have declined slightly for two consecutive months, however they remain near the upper end of where they been over the last few years.
Although first home buyers may have been slightly less active in the market over the last couple of months, the amount they are paying to get into their own homes and the amount of debt they are taking on to achieve that are both at record levels.
Interest.co.nz estimates the average price paid by first home buyers in July was $685,897, which was up by $118,329 (+21%) compared to July last year.
Over the same 12 month period the average size of first home buyers' mortgages has increased by nearly $95,000, rising from $454,054 in July last year to $548,718 in July this year.
Those are national figures, so first home buyers are almost certainly borrowing significantly more in places like Auckland, the Bay of Plenty and Wellington where house prices are considerably higher than the national average.
And many are stretching themselves financially in the process.
The Reserve Bank figures show more than a third (35.1%) of the mortgages approved for first home buyers in July had loan-to-valuation ratios above 80%, and that percentage has been increasing for four consecutive months.
That suggests many recent first home buyers could be among those hardest hit when the much anticipated increases in mortgage interest rates finally start to arrive.
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117 Comments
labour says:
thanks covid delta for distracting so much attention.
PM Ardern continues to deliver on her promise of HIGHER house prices.
I don't know what to tell you - renters and the housing-insecure helped vote Labour in with a super-majority. So yeah - ENJOY.
Complaining about PM Ardern delivering on her promise of higher-house-prices after the country voted Labour in with a historic majority is pretty ridiculous.. especially after KiwiBuild failed.
At a certain point voters need to take their complaints to the mirror.
voters are gullible as I long said.
NZ's political system is out of date as I long said.
The South African lady at my local BP Service Station thinks our government is fantastic. Though as a comparative bar - it's pretty low!
Everything from Trevor Mallard, Conditional Media Funding, Abuse of the Justice System to 'Hate Speech Laws'.. it's ALL pretty messed up.
There is definitely a corrupting going on of both the Bill of Rights and the proverbial "Social Contract".
guess 1k a fortnight is cheaper than rent. But eye watering amount of debt at a young age, guess gone are the days of having a freehold house by retirement for a lot of people now.
They'll work their guts out for the rest of their life-time paying the mortgage, then die. Sounds like a wonderful existence. But, at least they can relax in heaven knowing they have honoured their mortgage commitments.
... and treated a boomer to a comfortable retirement.
Dont worry the government will ensure a large amount of the debt is inflated away which redistributes it again from the Boomers Savings into the indebted
only the poorer boomers, the richer booms have rentals.....
Yes. A huge windfall of decades of future work being given to the current homeowners. The math of near zero interest rates mean that future homeowners won't get this same windfall, even if they stay near zero forever.
What could end up happening is interest rates normalise. So rather than seeing your interest payments reduce as the mortgage is paid off, the interest portion remains static. E.g. $500k @ 2.5% = $12,500 in interest. By the time the borrower gets the mortgage down to $400k, the interest rate is 3.12% or $12,500. Down to $300k -> 4.2%. $200k = 6.25%
The opposite of what previous generations enjoyed, where interest rates dropped which accelerated the principal payments.
Yes that's correct. The last 40 years interest rates have been dropping and now most mortgages are paid by two earners. These two big drivers won't be repeating. Though I wouldn't put it past the banks and real estate agents to suggest introducing a third earning partner for their benefit. Special Polyamorous rates!
At this stage of the market at 1k a fortnight on those mortgages you are renting money,
Better to have an "eye-watering amount of debt" at a young age - than an old age.
We can't blame younger people for seeking a foothold on the housing ladder. The sooner they do so, the better.
TTP
What an absolute crock of crap. Pure FOMO is screwing the FHB. How they can sleep at night with this kind of debt is amazing. Whilst Invested interests like yourself Tim yell get in quick. Morally bankrupt is not even close to describing this situation
This type of image comes to mind when I see some of these posts....
https://hips.hearstapps.com/digitalspyuk.cdnds.net/18/18/scar-lion-king…:*
Manipulate the minds of the young to benefit your own agenda.
TTP and others should be really ashamed of their daily FOMO lobbying if they have any honest cells in their bodies.
Tim was convicted of price fixing. Honesty not a strong point.
BL I wouldn't take any notice of TTP ......in fact I admire his fortitude for coming onto a forum such as this, considering the issues you noted he has been dealing with....anyway my advice I gave him one Friday a few weeks ago must of paid off, as he has increased his cash flow and has now taken to TV advertising :)
So ol' TTP is doing fine - he's just "pushing his barrow", so for the sake of your stress levels just ignore him, as FOMO for FHB is his only marketing strategy right now .....most of us have already woken up to the NZ residential (esp. AKL) property market and the "ponzi like", inequitable nature of it all.....and like every bubble, there will be a correction.
If I was a FHB right now, I would be building up a deposit through Cryptocurrencies and "selling high" and holding in your wallet in a USD coin, then buying in again in the dips.....certainly more "fluid" and currently a greater return than any other investment .......what TTP and his ilk don't realise is that the world is changing financially .....so if you can't beat the big banks, create your own one !!
Just don’t forget to pay your tax including provisional tax.
yep .....fully aware of the tax situation ...the real reason for cryptocurrencies is to keep what ever cash held, up to date with inflation ...not BS govt inflation figures but "real inflation" ..... and I can see inflation just booming, if the FED just keeps that "money machine" printing .....while it will have to be paid back sometime or "default"....but that's another story....
For many it's better to be maxed out on debt and own a house than to be loosing sleep over never being able to buy. Either way you lose sleep, and you do the thing that gives you the least anxiety. There as still a couple of life hacks that pay off - either don't have kids or move to Australia.
Real estate agent speak at its worst. What a load of baloney.
Except FHB are taking on record levels of debt at later and later stages of their lives, due to the subtainal hurdles for saving a deposit. The average age of a FHB has increased sustainably over the last couple of decades.
It's probably quite a bit more expensive the old mortgage+insurance+rates+maintenance. The FHB is also not buying the average house which rents for 1k a fortnight, but at least some of the money is going to paying off their principal so hopefully the price premium it works out for them in the long run.
I’d wager that 30+ years from now even if the principal was never touched the repayments on that debt will still be significantly less than someone having to find rent. Over time, and that is a long long time we are talking about, the debt gets inflated way.
The interest is easy to pay. Paying back the loan will be like running a marathon. Not so easy. No one can lose their job, die or get sick. I feel sorry for current FHBers. Us boomers had it easy when buying our first home. In fact any home. I have had only 3 homes, my biggest loan was a $100k and my current home is worth north of $3 million. Go figure.
probably worth 4 million in two or three years.
We'll most likely be going unconditional on a place within a week of lockdown ending. I figure we'll lock a large proportion of our mortgage in to a 5 year fixed rate, while leaving some floating so that we can make additional payments whenever possible. Am I worried? Yeah, a bit.
You must have some inside knowledge that rates are going to increased a crapload then.
I don't. I'm just very risk averse. I know that we can afford the mortgage on the 5 year special rate and would rather lock it in now than regret it if rates DO begin to rise.
I have the same mindset as you, I don't think you'll regret it even if rates don't go up. Much easier to live without the stress of not knowing.
That's a sensible strategy and one I've used in the past.
If you are young and skilled. Don't waste time here. Look for a job in Australia or UK/US. Lots of options and cheaper houses. Better lifestyle. You will thank me for this suggestion later.
I am in my early 30s and in a highly-skilled profession. Precisely why I can afford to stay, otherwise I'd be taking your advice.
"Better lifestyle."
That's arguable, Notgreedykiwi, especially given the Covid statistics in Australia/UK/US.
Remember, life isn't entirely about houses....... Health, education, safety/security and fresh air count for plenty too.
TTP
Well we can put covid aside as a hopefully fairly temporary issue.
What I do agree with is education. Having lived with my family in Aus for a few years, I can confidently say that our schooling quality is higher than Aus.
"Health, education, safety/security and fresh air count for plenty too" as if all of those things aren't directly affected by the impact of massively inflated housing values that change where people can afford to live.
.....but don't let the facts get in the way of a good story GV 27 :)
Congrats to you and your family CK. You've done it and it isn't easy.
I'd more say paying off the mortgage over a 30 year term without experiencing job loss, divorce, bad health, rising interest rates or a declining market might be the hard part. Putting together the deposit might be looked back at with relative ease.
Yep well done Crispy.
Buying a house for FHBs is still possible in Auckland if you are a high income earner, have wealthy parents, or win Lotto.
Hard luck if you are none of those.
Then Aus is a great option.
Crazy times.
And I've a feeling the crazy times don't end here. This lock down will provide ample excuses to see them increase more.
Wondering whether to speed up our departure from NZ to January.
January seems a long time to wait...
@thinktank Neiiiiigggggghhhhh to that !!! ......says the Crazy Horse !!!
FHB buying outside Auckland, still possible but what about Auckland.
In Auckland FHB buying beyond mostly above 7 to 9 times DTI to manage foothold in house, is it good or bad for those few managing in Auckland, only time will tell if so much over leverage / exposer promoted by RBNZ will help or destroy in long run.
Narrow minded short term attitute of bureaucrats and Orr's / Robertson's - is it good for the society and Empathy Queen was talking about wellness budget - which for her is throwing dole...which too is bad in long run.
Politician of all breed be it Jacinda are destroying the social fabric of the society and time to change the way democratic dictators operate and manage to get away without punishment unlike dictators of the past.
Can we make our minds up?
Is this ‘bad, young’uns in excessive debt!’
Or ‘fantastic, wealth effect will keep us prosperous!’
It’s THE SAME DAMN THING. Can’t have one without the other. Why is it so commonly discussed in a pusillanimous way, where high prices are celebrated alongside a bunch of hand-wringing about people ‘missing out’?
Here's an amazing one: https://harcourts.co.nz/Property/956391/TI8159/231-Robinson-Road
https://www.google.co.nz/maps/place/231+Robinson+Road,+Cave+7983
Sold for 352K in Feb 2020. House got a significant do over and sold for just over a million yesterday.
Amazing and didn't pay any taxes.
Why do you assume they didn't pay taxes? Unless this is their family home (which I doubt if they bought it a year ago and substantially renovated it) they almost certainly would've paid tax on it.
Or they 'should' pay tax, anyone know how much resource IRD is putting in to ensuring compliance?
I have heard conversations in passing, a few times, of shall we say speculators being very 'relaxed' over this...
The very least we want as a society is a bit of a tax dividend from this madness.
.
.
Must be an owner occupier, cant rent these old things as no insulation
Major renovation, looks very cosmetic, a cold ice box in winter
You can buy, renovate and sell a house without living in it. I seriously doubt it's an owner-occupier.
Thank Jacinda Arden :)
Million is new $400000
What a mess...
What an absolute shower of shite. It's just a constant normalisation of a degradation of our way of life. No matter how much money you have , we as NZers are the losers.
We are mortgage free with young kids and know that they will be living with us for a long time, well into their adulthood if they are to have any chance of financial stability. I don't mind that, if that is the price we have to pay to stay off the greedy, self serving insanity that is the property market then thats fine. At least one day I will be able to look my kids and grand kids in the eye and say that I had no part of the theft of their futures.
We are not rich, we live in our first and only home but we are financially free and have the most important thing of all....time. We have what we need to do everything we want and live our lives far away from the madness.
If I could thumbs up your comment a hundred times I would. Hard not to get angry at the situation however we, like you, have a house with no mortgage over it and somewhere our kids can live for as long as they like and feel safe knowing they have a fall back.
F@@@ the way society is treating houses now.
I agree - and having lived through the housing bubble in the US its been extremely painful to witness the laissez faire attitude of government/central bank towards the issue. Being in this situation was preventable, but nobody wanted to experience the short term pain of doing the right thing/s in order to create financial and social stability for the long term. Weak leadership and groups of morally poor voters/politicians who decided they would rather promote a bubble for their own financial or political gain that do the right thing for future generations (and ultimately themselves because of the interdependent nature of society).
Yeah I think there are a lot of good people out there just getting on with it best they can but unfortunately shameless financial debauchery seems more newsworthy!
The issue is nobody is solving the issue.
I'm sorry to say this. But you may not see your grand kids. Our next generation may choose not to have kids since life is too struggle.
Don't be sorry, pretty obvious statement.......it's their choice not mine and I'm fine with that. I was simply making a point.
So prices in one year have gone up by about 3x that which was the total cost of a house for a previous (boomer) generation! (say 30k for a first home in 1960/1970)....let alone considering the already sky high price before that!
Seems like a reasonably fair playing field (and I'm not blaming boomers BTW - they're just pawns in an economic machine, but happy to have been born to parents who created far better conditions for them than they appear to have constructively created or attempted to shape for the generations that follow them).
Superannuation is one area where that's evident. Voting Muldoon in the 70s after he campaigned on disestablishing Labour's user contributory (Kiwisaver style) superannuation scheme. To hell with funding their own retirement, let's saddle the future generations with the burden, currently $12b+ per year.
I'm reading The 4th Turning at present. Fascinating theory/insights into generational dynamics going back hundreds of years. The future could be very interesting/different indeed if the authors are correct. Most people I talk to assume the next 40 years will resemble the last 40 years and can't see how wrong this assumption could be.
https://www.amazon.com/Fourth-Turning-American-Prophecy-Rendezvous/dp/0…
Cheers, I've just downloaded the sample and will have a look thru tonight. Always looking for recommendations.
Incidentally (pun), I'm reading : Air Crashes and Miracle Landings: 85 CASES - How and Why by Christopher Bartlett on Kindle
Apart from being relatively light reading, with lessons on cause/effect, the similarities between NZ's housing issues and flying a plane around on vapors, with the series of avoidable events leading up to this point is quite poignant.
It also devotes a chapter to the Erebus disaster. Very tragic.
Ah yes, the National Party 1975 bribe to win power . Missed one point though . The personal tax rates set for workers from that time to help fund the scheme. At least until the second term of the Lange/Douglas era. Pay half-baked salaries for politicians , get half-baked politicians . You could always vote in the current third choice leader of the Nats and see if they can do any better .. Remember John Key was an avid supporter of Todd Muller being their leader and Prime Minister .
Looks like in the 1960s you could get petrol for $0.08 per litre and first homes cost about $40,000 (ie. 500,000 litres of petrol for a house).
First homes now cost about $1,000,000 and petrol is about $2.399 at (BP in Auckland today). That means a house today only costs 416,840 litres of petrol as opposed to the 500,000 it cost in the 60s!
I chose petrol as a comparison because everyone uses it and it doesn’t change much. In 1970 the most basic PDP-1 computer system cost about $120,000 (ie. you could buy 3 houses for the price of a computer with less processing power than a modern $18.99 graphics calculator).
People of my generation will happily have multiple computers ( can you imagine how many houses they could have traded all their modern computers for in 1960? ).
Thanks for the stat but whats your point? When was the last time anyone got paid in petrol or bought a house with petrol?
When I compare the price of houses with what they cost back in the past I usually usually like to use the prices of houses rather than petrol. Seems more relevant.
Using the price of petrol helps adjust for the devaluing of the dollar that occurs over time due to inflation. Essentially houses appear to cost more now because inflation has made the dollar worth less. Petrol being product that is essentially the same now as it was in 1960 allows us to use it to measure the price of things over time to exclude the effect of inflation.
That's a very selective and convenient way to measure inflation. When do you start working for the RBNZ?
It is essentially the Big Mac index, but Big Mac prices have been heavily impacted by minimum wage changes whilst petrol has not. Also not everyone consumes Big Macs but the majority either directly or indirectly use petrol.
You picked one of the most geopolitically influenced commodities on Earth as a price index, instead of the wages that people are actually paid and from which they have to pay their mortgage?
.
Any source for the $40k house prices in the 1960's? A quick google search suggests in 1960 an average house was $6k, or 75k litres of petrol.
https://www.nzherald.co.nz/nz/its-hard-labour-to-own-a-house/SRPIEJI6CG….
Reverse engineered based on this data assuming that first homes now cost $1,000,000 . I said 1960s because the data only applies back to 1965. https://www.rbnz.govt.nz/-/media/reservebank/files/publications/bulleti…
mmm, how the loss of the UK captured market, who was able to pay premium prices for NZ products, is to be blamed on any NZ generation? That standard of life was underpinned by a completely different trading world. That world is gone, and with it NZ ability to have high surpluses. Since 1970s NZ has been on a downward trajectory (economically) and have been trying so many different things to see what may work.
Boomers are the last beneficiaries of the good old days.
I pick no OCR increases over the next few months, and for prices to be up by between 5-10% by March.
South Korea has just increased rates.
I pick the OCR to be at 1% by end of 2021 (with an increase of 75 basis points total in the next two reviews), and at least 2% by end of next year.
The market (current swap rates) currently predicts 50 basis points increase in 2021 with almost certainty, plus around 15% chance of 75 basis rather than 50 basis points. The swap rates consensus also sees the OCR at around 1.75% by end of the next year.
No chance of 1% ocr by end of this year mate. The lockdown has put an end to that possibility.
At most, 0.5%. But I would bet on it remaining at 0.25.
RBNZ is hoping that starting end of next year till 2024 house price will fall by 5% so still wait and watch for it to jump after appox 50% to 100% since last year to atleast 30% to 50% from here to next year.
What an opportunity and assurance as comes from rbnz.
Interesting.. just saw it posted elsewhere that ASB are changing the amount of rental property income they use for servicing calcs from 75% to 60% with immediate effect. Thats a bunch of landlords that will not be getting a loan from ASB, and they wont be competing with FHB.
There are a lot of comments here suggesting all these people are stupid or shouldn't take on this debt. What alternative do you suggest? Before you speak, let me give you a real situation. I'm in my mid 30s. I started looking at buying a house 4 ish years ago and they were crazy expensive then and everyone here were saying people would be dumb to buy now, it will defo come down... etc... etc... I waited and watched prices double in my area in that time. So your absolutely right fomo is a part of this we aren't getting any younger. I bought somewhere last year, smallish, expensive for what it is, but the debt is very similar to the numbers in the article, and feels manageable. The house is double the size of what I was renting and (at the moment) the interest +expenses are $102 a week less than my rent was - and my rent was relatively cheap!
How long do you put your life on hold for the market to correct?
My advice to people on the fence, do your sums, if you can afford the repayments at double the current interest rates, and you like the house, get in. What is the alternative? Wait for market forces? Do you really believe the govt or the res bank has any intention of helping FHBs at the expense of people who already own? The govt and reserve bank have proven they will actively try to INFLATE prices if they can. Maybe it will go down a bit for a while, maybe it will stay worth the same. But if your in it to live in it for 5+ years hopefully it will be fine. Hey it might even go up! The debt may look like a mountain now, but the hope is that inflation will make it easier too.
Screwed if you do, screwed if you don't...
Your in your 30s. So you have never experienced a market collapse of any sort. You have bene raised in a narrative where 'house prices always go up'.
Well guess what. Markets can collapse. House prices can crash.
You think the smart money is buying into this bubble?
Well guess what, Asteroids can hit planets, plagues can decimate populations. You think the smart money is buying into this stable and still under supplied market?
Smart is not buying sboxes at any price in the most inflated housing bubble in the world --especially in a world which we all sit at home and spend printed money. You are at the opposite end of the smart spectrum.
I'm Irish and work in construction so very well aware I'm afraid. But your not answering my question. What's the alternative? I'm aging, my partner is aging. We want to start a family etc. Renting a house to do that has problems 1 they are very expensive, 2 they are getting more expensive, and 3 they are of poor quality. I can afford to buy, I could have afforded more 3 years ago but having experienced a crash in my early twenties I was skeptical - still am. But how long do you put your life on hold? If you buy it to live in for 5-10+ years I don't think it matters. In Dublin, house prices dropped by 50% in some places. 12 years later, they have recovered and exceeded that previous peak. That's all hypothetical anyway. The reality is my generation are aging, want to crack on with life, what do we do? Wait it out? How long? 1 year? 2? 10?
Yeah you are in a bad space. My question is why has you internet/social media savvy generation not mobilised, organised via online a rent strike (for example). Rolling weekly rent strikes far and wide to send a message that housing is not a way one bet.
The time for being radicle has arrived - the county leadership has been given ample opportunity to stop propping up landlords and has failed.
I see little choice but affirmative action by your generation.
If you can afford it, take it. No problems with that. It's really a personal choice. The issue is that it now priced out most of people in this country, that means they cannot afford it, even they push it really hard. Owning a house for FHB is supposed to make them happy rather than miserable.
Based on the figures provided, FHB's are the ones getting into the market and causing the uplift in home prices. So do you want them to buy? or do you not want to them buy? I am confused. You can't have it both ways.
I'm sure all FHB's who purchased are happy they are in their own home now. Being one myself, I'm very happy that I was able to buy something and even though I had to take on a bit more debt, after working out the figures with my banker, I feel very confident in paying it off given the stress tests.
So I am not sure what you mean by "unaffordability" for FHBs. Maybe they won't be able to buy in their most desired locations, but it's give and take here. You can't have everything in life handed to everyone.
I was in a similar situation to you. I purchased my first home in Auckland 3 years ago when people were saying that prices had peaked and a crash was imminent. You can't just sit and wait and hope forever. Buying a first home is not only a financial decision, but a lifestyle/wellbeing decision. I was much happier once I was in my own home.
So am I. Purchased our first home the end of last year when everyone was saying it was going to crash and we paid way too much.
Since then life has been infinitely better than renting even with these horrific lockdowns.
In a very similar situation to you. Could have bought a few years ago and didn't based on my gut feel and FUD on this site that this was unsustainable and would see a significant correction within a couple of years. So i waited and ended up paying a few hundred k more early this year than what the same property would have cost me in 2017/18. Strangely i am ok with it - i have made some good financial decisions and bad ones over the years and no point dwelling on what could have been. I have a home for my young family and can service the mortgage with a good job regardless of whether interest rates rise in the future.
What changed my mind and prompted me to buy? Witnessing the unfathomable determination the government and reserve bank had to kick the can down the road and protect property prices at all costs following a major economic shock regardless of the future ramifications for our younger generations.
100% my thinking too.
Why would you have to buy at the moment? Why don't just go for a place that you feel hope there and may come back after a couple of years.
I can comfortably say to my kids to forget about thinking they might have their own home one day.
Which is not a bad thing, they can live their lives with freedom and without being enslaved to debt payments and worry about maintenance bills and every increasing rates & insurance bills.
Bye bye old kiwi dream, welcome aboard new kiwi dream
Yeah, not necessarily end of the world provided you commit to saving and other forms of investment.
Yes, without a house, some of them don't even think to have a kid.
I seem to recall seeing a stat somewhere that said people from lower socio economic backgrounds tend to have more kids. That is those less likely to own property are producing more offspring.
If I was much younger I would get 2 houses .....a "tiny house" and a van size mobile home ....imagine the freedom !
So the price inflation is caused by the FHB's. So can we now stop incorrectly blaming investors, foreign investments, etc. for the price increases?
Everyone wanted the FHB to get a better chance at getting on the property ladder. Now it's clear the evidence shows they have been. And yet now people are still complaining house prices are going too high and FHB's are outpriced in the market, even though it suggests that the FHB are coming in at record numbers?
So which one is it folks? Does everyone just want a house for free? Why don't we just all stop being productive and stop working?
As a FHB, very happy I finally got on the ladder (even if it's seen as peak and people are all wishing for a housing price crash). People just need to lower their expectations. Everyone is complaining how they should be able to afford a prime location in Central Auckland that has 4 beds and 3 baths for under $700K. What type of reality is that? Folks needs to come to the realization that home ownership takes time, commitment, discipline, effort, and hard work. These are things YOU can control. Praying to the gods for a housing crash is not. Maybe start off with something modest like a 2 bed 1 bath townhome/condo, and then work your way up the equity chain. That's how many have grew their net worth.
"Maybe start off with something modest like a 2 bed 1 bath townhome/condo, and then work your way up the equity chain. That's how many have grew their net worth."
Cool. A one bedroom townhouse in my suburb 20km from the CBD is almost $700K. Also, 'working your way up the equity chain' doesn't work when you're committing so much to a mortgage that you effectively can't get ahead, because guess what, all your other living costs are exploding.
'Working your way up the chain' means 'sit back and hope for some sweet capital gain' which only works if your next house is increasing in value slower than the one you had to stretch yourself to even get in the first place, which it probably isn't.
Also, please point me to a single, non-insane FHB trying to buy an executive home in Central Auckland for under $700K, because if you're going to make something up to float out-of-touch boomer talking points against, at least make it believable.
Bang on. This strawman of 'young people all expect a mansion in the city' is absolute nonsense.
It's also worth noting that while someone who bought a house a few years ago -- a relatively short time -- might feel like, 'I did it, why can't they?' -- prices have gone up *significantly* since then, much faster than most people can add to a deposit. If it was very difficult for you in 2019 and you feel proud, well, it would be impossible for you in 2021.
Agreed. It's going to cost someone $930K+ to make me part with my modest three bedder on a cross-lease section, an hour's commute from the CBD on a weeknight and with no public transport options, because I now need that money to close the growing gap between this and a four bedroom family home. That price floor is now locked in, thanks to the last two years of property gains since I bought it. And guess what that does for every four-bedroom, fee-simple section in my immediate area? So, FHBs looking to buy this as a first-home are going to need to find $186K as a deposit, which is probably 50% of what it probably should cost outright in a non-insane market.
I thought it was a troll.
7jai failing to understand that it does not have to be this way. It is this way be design - designed by bankers and govt.
It does not have to be this way no.
Afghanistan also does not have to be this way.
But it is this way and life is now there is no rehearsal so you have play the hand you’re dealt or fold and leave the table.
Certainly it’s a cost on mental health to be obsessively raging and complaining about the monetary system 24/7. Just get on with living because nobody is promised anything let alone tomorrow.
What a defeatist. Roll over and I'll scratch your tummy.
"you have play the hand you’re dealt or fold and leave the table."
Wild, a 'just deal with it' theory that doesn't require the people who have creamed it at the expense of their kids and grandkids to feel a tinge of guilt.
I think you'll find increasing numbers of Kiwis will just leave the table - just don't complain when you only see your grandkids once every few years.
Wild, a 'just deal with it' theory that doesn't require the people who have creamed it at the expense of their kids and grandkids to feel a tinge of guilt.
The old farts didn't create the bubble. Their attitudes have something to do with it, but they didn't collectively 'create' it. It's the dogma of and conditions set by the ruling elite that enables the bubble. The architects of the bubble like the central / commercial bankers are the ones creaming it.
Furthermore, the bubble is not infallible, even though the sheeple are led to believe it is.
Totally unsustainable, where are the incomes to support these prices?
New Zealand has quickly becoming a dystopian hole. Glad I left to never return. Good luck, you'll all need it.
Well said.
Hasta La Vista.
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