another testament to an idiot economy. Only bettered by the idiocy in Australia where the deputy RBA governor thinks that houses should stay high. At least we have a governor who acknowledges the evil of high house prices.

Both bubbles exist only with taxpayer support. When the fiscal hammer comes down on the heads of the stupid govts on both sides of the Tasman...it's all over and the stuff will splatter everywhere...but the govts will blame the ones who said it was coming. I'll stick with copper and gold. Seems the market couldn't give a rats about the shrill screaming demands for a correction in the rising price of gold. All those bears who failed to buy in months ago...how sad..

Oh not useless ah...heavy yes but not useless. I recall reading about a midwest American family in the 1800s with a door stop one of the sprogs had brought back from the river bank..sure stopped that door from blowing shut..solid gold nugget. So you can always use your bar of gold as a doorstop.

The only force missing from the bull run JC is the belief that God made gold so that man was provided with the one true form of money. All others being a product of the Devil.

For shame JC....get rid of those Devil 'demoninated dirty dollars'...burn the lot but keep the shares as they are your tickets through the pearly gate..the more you have the wider the opening...

"Gen X probably does care, but we know that we are so outnumbered by people who don't care."

I fall into this demog but I most definitely don't care, even though it's fascinating and worthy of thinking deeply about. One of the positive spin offs about the whole state of affairs is that people will become more cynical (which doesn't have to be a negative attitude if it encourages you to take a contrarian position) and more creative in your approach to self determination. Ultimately, the property rort is linked to a warped socialist ideal that is too far advanced for most new entrants to benefit from.

"Why the hell would I choose to be up to my eyeballs in debt for the next 30 years in NZ when I can take off to a country that will probably pay me more for my equivalent position and have affordable housing?"

Well that's your choice isn't it and I think my post alludes to your question. Yes, I am convinced that if you follow a career path, then the chances are you"ll be better off in another country and I'd strongly advise anyone with the opportunity to do it. While I'm on the topic, I know a Kiwi engineer domiciled in Tokyo where he lives in digs he could never afford on his own salary and his kids are getting a top-flight education and learning invaluable cultural skills. And professionally, the scope of his work and responsibility doesn't even compare to what goes on back on the "rock" of NZ.

To put it in perspective, he states about an equivalent position working in NZ: "I could drive a better car."

from what you guys are posting it appears nothing has changed since i left n/otago in 1982 for aus. the reasons are exactly the same. my main motivation was money.i went from $6.00 p/h to $12.50[ as a plumber] i was 22

"Why the hell would I choose to be up to my eyeballs in debt for the next 30 years in NZ when I can take off to a country that will probably pay me more for my equivalent position and have affordable housing?"

.....
this is the attitude i was talking about the other day.
The Kiwi attitude.
People from other country can't wait to come here, and the Kiwis don't think NZ is good enough for them...
Great, if you don't want it, others will take it.

Thats right, the grass is always greener on the other side.

Wow I'm such a selfish person I already have a property for each of my children when they grow up, a bit of a head start - I think all those people moaning about other younger generations are not doing anything about are the selfish ones, the ones that blow their money on bait, V8's (not the juice), wine and designer sneakers with inbuilt MP3 players...

the lawn mower man, the hairdresser, the drive in car wash, the window cleaner, outdoor speakers and pineapple lumps - shall I go on, and on and on???

Oh - I almost forgot, the interest payments that are just kicking in on the playstation 3 purchased for no money down, no interest for three years, and full retail pricing. Frickin idiots...

House insurance to rise 10%

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1061...

Probably rates too in Auckland region so that councils can cover the costs of payouts related to leaky houses and the costs of the super city

Landlords will have to put their rents up to compensate! Renting or buying - both will become unaffordable. More homeless people on the streets will be the outcome.

veedub : Great article . And yet not " rocket science " , is it ! Many who blog here could have expressed those same views . That being so , why have successive governments failed to grasp the bleeding obvious . Clearly no I.Q. or commonsense tests are applied before one gets a ministerial post . Pity !

Landlords will have to put their rents up to compensate! Renting or buying "“ both will become unaffordable. More homeless people on the streets will be the outcome.

Sounds Like Propaganda

If people cannot afford the increased rent they will double up.

Occupancy ratio change of 2.7 per household to 2.8 per household is how many extra properties available?

More property will become empty. Those landlords will have to choose whether to drop their rent. Hold out for a higher rent. Or leave the property empty.

In general terms, landlords will charge as much as the market will bear (or close to it).

If the Market does not like the rent increase, then the reaction will be along the lines of increased occupancy.

The argument that "Landlord costs up therefore one to one correlation with Rents Must Go Up" is a fallacious argument. There are other factors. Increased costs means the landlords will be keen to try for rent increases. Whether the market accepts those increases, in the absense of household income growth, is another matter.

How NZ will ever sell its good overseas with a higher labour cost input is beyond me.

How does Australia do it?

There is a good answer, Kate, that invloves the demand for what is produced; the exchange rate it is sold at and the taxation/regulation application to those exports - but I don't have it for you here! I suspect that at the moment it is the former point - demand for what is produced - has the most to do with the right answer. Produce what the market wants, and it will buy it. The major driver of our economy, and hence our product, appears to be domestic housing.

"Landlords will have to put their rents up to compensate! Renting or buying "

and then they will be running a business as it should be, making a profit day to day and not gambling on a capital gain to recover their losses and tax claims which those renters pay for in-directly anyway.

regards

And in turn causing home affordability to become even worse....which is what this blog is about...

The risks are lessened by a govt that is committed to propping up the bubble, steven.

I struggle to understand why you are so negative about the real estate market. To most people it is fine. They understand it is a matter of choice - buy or rent. You seem to think it is everyones God given right to own a home. Now why would that be? Lots of people have always rented and will continue to do so. Often its cheaper than buying so whats the big deal?

In fact there are plenty of cheap houses to buy - you just cant buy a big pompous home in a flash suburb close to the city centre cheaply. I think your issue is one of attitude, just like the current 'me' generation.

Yes I have a nice house now. But I once could not afford a car and had to finish my first house myself. I scrimped and had tennants living with me for years to try and make ends meet. At one stage interest rates were pushing 20%. I put up with this because I understood I needed to do this to get ahead. Thing is, the modern young couple/person wont do this. They want the plasma TV, holidays and flash car as well as the flash house right now.

Actually I dont think it is any harder to buy a house nowadays. Banks are more willing to lend money, and interest rates quite reasonable. OK the student loan thing is stink, but that is surely a separate issue.

Yes, Nicholas - and note the decline in importance of manufacturing being cushioned by the take up in mining. It would be fascinating to see the same categories and same decade change series for NZ in comparison. I suspect the NZ mix has changed little in that 10 years.

@Nicolaus: but for instance we make good wool, we shouldn't export raw wool but turn it into high quality, high value, high margin produce...we are also then shipping a finished product ie no waste weight to transport and not raw materials....

So in some ways we have advantages over OZ....we have the ability to send finished products into discerning markets and not ship raw materials to China to produce more cheap consumer cwap(TM).

@john: "Now why would that be? Lots of people have always rented and will continue to do so. Often its cheaper than buying so whats the big deal?"

Its cheaper to rent because its more expensive to buy because speculators over-pay because they now they can make tax losses to compensate....that prices a "genuine" home buyer out of the market, forcing them to rent. Once the silly tax advantages go being an amateur landlord will make no financial sense...ppl will be able to afford to buy rather than forced to rent....Professional landlords will probably find that irrational amateurs don't get in their way either....

"OK the student loan thing is stink, but that is surely a separate issue." No it isnt because its lost income to the ppl in Q, so they can afford less of something else. Older ppl had a pretty much free education up to degree level, and now they have no or small mortgages left and high incomes relative to 20~30 somethings....so it is stink and its relevant IMHO.

regards

There's a movement to radically change California government, by getting rid of career politicians and chopping their salaries in half. A group known as Citizens for California Reform wants to make the California legislature a part time time job, just like it was until 1966.
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