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First home buyers should have no trouble getting a house anywhere but Auckland - AMP360 Home Loan Affordability report

Property
First home buyers should have no trouble getting a house anywhere but Auckland - AMP360 Home Loan Affordability report
<a href="http://www.shutterstock.com/">Image sourced from Shutterstock.com</a>

Housing remains affordable for first home buyers in all parts of the country except Auckland, according to the latest AMP360 Home Loan Affordability Report.

The  report measures the ability of a working couple aged 25-29 (based on the median income for that age group) to service a mortgage for a home at the lower quartile selling price in each region of the country.

Traditionally, financial advisers have considered housing to be affordable when the cost of rent or servicing a mortgage takes up no more than a third of take home pay.

However with the more liberal attitudes to debt currently prevailing, the AMP360 report uses a 40% of net income threshold to determine whether a home loan would be affordable or not.

The report shows that at a national level,  housing remains well within affordable levels for first home buyers. 

The median after tax income of a working couple aged 25-29 is $1500 a week, while the national lower quartile selling price for homes sold in February (based on REINZ figures) was $292,000.

The cost of servicing a mortgage (at the average 2 year fixed rate) to buy a property at that price would be $357 a week, or 23.8% of the couple's weekly take home pay.

With mortgage repayments taking up less than a quarter of a working couple's take home pay, buying a first home remains well within affordable levels on a New Zealand-wide basis.

And as long as they are disciplined with their saving habit, a working couple should also be able to get together a deposit of more than 20% to buy a lower quartile priced home.

The AMP360 report assumes a couple have saved 20% of their net income over four years and have earned interest at the prevailing 90 day deposit rate during that time, to get their deposit.

On that basis, a working 25-29 year old couple earning the median income for their age group would have saved $65,596 over four years, which would give them a 22.5% deposit for a lower quartile priced house.

So at the national level, housing remains affordable for first home buyers, both in terms of saving for a deposit and comfortably making the repayments on the  mortgage for a lower quartile priced home.

The Auckland problem child

But there are significant regional differences in affordability.

The AMP360 report makes adjustments for regional differences in both dwelling selling prices and income levels.

When these regional differences are taken into account, all regions of the country remain below the affordable threshold except Auckland.

The most affordable region in the country for first home buyers is Wanganui, where the mortgage repayments would take just 8.6% of income.

And other cities such as Tauranga (26.8%), Hamilton (24%), New Plymouth (26.8%), Napier (23.3%), Wellington (30,1%), Nelson (26.4%), Christchurch (30.9%), Dunedin (21%) and Invercargill (11.3%) all remain well below the 40%  of net income affordability threshold.

However Queenstown, where the mortgage payments on a lower quartile priced home would be 39.3% of the median take home pay, only just scrapes in below the 40% affordability threshold, and is the most expensive place for first home buyers outside of Auckland.

Not surprisingly Auckland is the problem child in the first home market.

The lower quartile house price in the Auckland region was $554,600 in February, and the median take home pay for a 25-29 year old couple would be $1537 a week.

The mortgage payments required to purchase a lower quartile-priced home would be $733 a week, eating up 47.7% of their take home pay.

That would leave them with $804 a week between them to pay for everything else.

Paying that much of your income to cover your accommodation costs is a concern for two main reasons.

Firstly, mortgage payments are only one of the costs that home owners face and when other costs such as rates, insurance and maintenance are factored in, our first home buyers would be likely to be paying out well over half of their take home pay to cover their housing costs.

It also leaves them vulnerable to any financial shocks, such as an increase in mortgage interest rates (the interest rate used in the latest AMP 360 calculation is 5.6%, which by historical standards is unusually low) or to either of the couple facing a reduction in their income.

If any of those things happened, the first home buying couple could find themselves in serious financial difficulties.

Another problem first home buyers face in Auckland is that they would find it difficult to save a 20% deposit.

A 20% deposit on a lower quartile-priced home in Auckland would be $110,920.

But if the first home buyers saved 20% of their net income for four years, with interest, (the AMP360 report's standard calculation) they would only have $67,532 for a deposit, which is just 12.2% of the cost of a lower quartile-priced house.

So to buy that home they would need a mortgage for 87.8% of the purchase price, meaning they would have to try to secure a mortgage from the limited number that banks make available for borrowers wanting a mortgage with a loan-to-value ratio above 80%.

It would also mean they would not qualify for many of the special mortgage deals banks offer from time to time, which are usually reserved for customers with a minimum 20% deposit.

The latest AMP360 Home Loan Affordability report also shows that the difficulties first home buyers face in Auckland have occurred just over the last two years and are almost entirely a result of house prices rising much faster than incomes.

In February 2013 the median net income of a first home buying couple in Auckland was $1483 a week and by last month that had increased to $1537 a week, up $54 (3.6%).

Over the same period Auckland's lower quartile house price went form $429,000 to $554,600 an increase of $125,3000 (29.2%), while the average mortgage interest rate used in the calculations went from 5.49% to 5.6%.

The result is that weekly mortgage payments climbed from $548 in February 2013 to $733 last month, easily outpacing the growth in income over that period and taking the amount of take home pay required to service the mortgage from 36.9% (still affordable) to 47.7% (unaffordable).

AMP360 national manager Paul Gardiner said buying your first home was one of life's major events, so it was important that first home buyers made the right choice when it came to their mortgage.

"It's important that there's a good fit between the borrower and their mortgage and our mortgage advisers can explain the options first home buyers have available to them and help them choose the mortgage that best suits their needs," he said.

Auckland Central Auckland North Shore Auckland South Auckland West Wellington City Hutt Valley Porirua Kapiti Coast Whangarei New Zealand Hamilton Tauranga Rotorua Napier Hastings Gisborne New Plymouth Palmerston North Wanganui Nelson Christchurch Timaru WairarapaQueenstown Dunedin Invercargill

 

No chart with that title exists.

To read the full AMP360 Home Loan Report for any region in the country, click on the region you wish to read about in the table below:

 

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

89 Comments

Traditionally, financial advisers have considered housing to be affordable when the cost of rent or servicing a mortgage takes up no more than a third of take home pay.

 

However with the more liberal attitudes to debt currently prevailing, the AMP360 report uses a 40% of net income threshold to determine whether a home loan would be affordable or not.

 

The accepted benchmark is the total housing cost should not exceed 30% income for housing to be affordable. MSD uses this figure and include rates in the calculation. 28% is sometimes used for mortgage-only cost.

 

The second paragraph says "Because people have overbid on housing, we consider that paying more for housing is affordable so we've moved the goalposts to make it look better". There is a big difference between 30% total cost and 40% mortgage repayment.

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And interest rates have a significant effect.

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AMP economists to bosses;

"we've done the calculations and Auckland is severely unaffordable"

Bosses - "use lowest quartile houses"

Economists - "sir, it's still severely unaffordable"

Bosses - "do they still have any leftover income? increase it to 40% of income"

Economists - "still unaffordable, sir"

Bosses - "I think Huntly is fairly representative of Auckland, use that"

Economists - "that is affordable if we exclude fuel and commuting costs"

Bosses - "excellent, exclude commuting costs. And don't forget to include a note in the report about how young people waste all their money on coffee"

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Are we missing a trick here ?

Why dont the Banks ,the insurers , the SOE's , various  call centres , the big multinnationals like Vodafone , and Woolworths ,  and even Spark have their back-office and admin  staff working from Hamilton , Tauranga , Wellington or Chch ?

Even Fonterra could transfer some of its current Auckland  functions to a lower cost area such as Hamilton

Given modern technology , people can do thier jobs from just about anyhwere .

Stimulating these towns have immediate benefits to Govt , in that unemployment in these areas will fall as local business need everyone from checkout operators to Maccers jockeys.

So the costs of social welfare in Provincial NZ could fall in tandem with increased opportunity in these towns

Everything can be done from anywhere using tech today  , for example  meetings are held by link or skype on a big screen , and call centres currently operate here based in Manilla , even legal documents can be drafted or Xero updated in Hamilton , its all online

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Exactly, if I was back in NZ and with my line of work I have no choice but to live in either Auckland or Wellington.

Interestingly, my 55" LG Smart TV came with Skype camera and it cost $1300, not a big cost for teleconference.

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Does proximity to international airports (with a minimum number of daily international flights) play a major factor in this?

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"Stimulating these towns have immediate benefits to Govt , in that unemployment in these areas will fall as local business need everyone from checkout operators to Maccers jockeys."
That's great for the people in the small towns - not so great for the people in Auckland who all loose their jobs - and for whom life is a lot more expensive than for the small town people. So in effect will cost the Govt more in benefits (including accommodation allowances)...

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Because a) they want access to a big pool of competant and  cheap labour b) want to be in easy touch with other businesses.  c) there is also things like networking and electricity redundancy to consider.  d) On top of that no CEO, CFO etc wants to live in the back or beyond, or few do.

I suppose the thing is why isnt someone asking these Qs of businesses? 

 

 

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...and e) bosses don't really trust their staff to work from home.....even though leasing/renting/owning office space is a huge part of their overhead.

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irrelevant for the majority of professionals that bill their time (lawyers, accountants, consultants); you make your billables at home or work makes no difference to the employer

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Thousands of other office workers who don't necessarily need to be in the office if they could log on to the work server from home....yet they're all still required to commute in.

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AMP:  It's big, grey, has 4 legs, a trunk, flappy ears and lives in Awkland.

Gnats: What elephant?

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The moral of the story is, "You can't afford to have a house and kids."  Please choose wisely.  Presumably 40% of a couple's take home pay would equal 80% of a single take home pay.

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I spend 40% of my pay on my mortgage, rates not included. I'm servicing the mortgage on my own.

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That's great, and in can be done in some places, or on some incomes.  The point was that 40% of median 2 income pay is considered affordable, which leaves zero room for having a family.

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Note that the cheapest part of Auckland is 44.6% so that is 89.2% on one income. This data also doesn't include student loans which for a $50,000 earner is $3623/year. Plus rates plus insurance plus travel to work and you are way over 100% before you even feed your 2 and a bit mouths.

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Hang on - wasn't it you who said that having children don't cause parents to go into debt?

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Have you now changed your point of view?

 

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No, my previous comment still stands. The logical thing for young people living in Auckland to do is to move to somewhere cheaper or delay having children until they can afford it.

 

I am illustrating here that we have a fundamental problem in Auckland driven by house prices which is impacting people's lives. The choices are: a lifetime of debt servitude for those who want the lifestyle their parents had, ending up dead/too frail to interact with their grandchildren or having to move away from family and support networks. None of these are good for the long-term

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If you move somewhere cheaper, the pay is cheaper, too, so that's not necessarily making any difference in take-home pay.

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Also: why is raising a child so expensive these days? Shouldn't that be a question we need to ask ourselves?

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There's a business opportunity in this for entrepreneurial types to revive Minnie Dean-style baby farming on behalf of Auckland parents who can't find accommodation which allows children.

 

And if you locate the baby farm outside Auckland, there's the advantage of being able to afford a large, non-overlooked back yard for burying the casualties.

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By moving somewhere outside of Auckland, you should be able to increase your disposable income. Yes, you are paid less but your outgoings (especially housing and childcare) are significantly lower. For example, I worked out that for the same lifestyle, I could be paid 40% less in Tauranga and still have the same dispoable income as buying in Auckland. YMMV.

 

The problem comes not from finding a suitable job but restricting your career options. You may find a good job and work there for a few years but once you look to move on then the options are few or do not exist locally. Living in Auckland gives you many more future options.

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Raising a kid doesn't have to be that expensive, it's the loss of one income that costs far more then the actual raising. 

 

I also question your assumption that the pay is cheaper outside auckland.  I highly doubt the difference in pay comes remotely close to the difference in housing, parking, commuting etc.

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A SEEK search with a specific minimum salary as one of the filters, returns 5 jobs in the Waikato region, compared to 5 pages in Auckland.

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So yes, pay is a lot cheaper outside Auckland.

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And raising a child is very expensive - can't you see: the fact that it takes 2 wages to be able to survive these days, and that having a child inevitably means you have to sacrifice one of those wages for 5 years (unless you have a big and generous family living nearby), means raising a child is expensive?

The sacrifice of one income stream makes it expensive!

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Every $100k you save on the mortgage is the equivalent of $10k/year in salary. So if you can save $300k by moving to Hamilton compared to Auckland then your salary could be $30k less and you would still have the same disposable income. In practice, you will probably have more disposable income as you will also spend less on childcare (the free 20 hours ECE are actually free rather than subsidised as in Auckland) and other areas.

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That's provided I could find a job in Hamilton......

I'd be more than happy to move to the Coromandel if I could find a job there.....we're not all stuck ON Auckland, rather stuck IN it.

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A seek search with any wage bracket as a filter returns at least 10x more jobs in Auckland then Waikato.  Draw your own conclusions from that piece of data.

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....Did you just confirm the point I was making?

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Well if you can read that as saying the pay is better in Auckland, good luck to you.

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usually if there are more jobs available, it means employers can't fill the positions so wages go up....(Auckland)

Less jobs available usually means employees have to compete and so wages go down. (Waikato)

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so yes - my conclusion still stands.

Unless there's something yo want to share with me? Or would you prefer to remain cryptic?

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positions relative to population. auckland city population is 13x that of Hamilton, therefore you need at least 13x as many jobs in auckland

 

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well, at "least 10x" is pretty close.....and if this is what skudiv meant it's not what he wrote. I still think wages are relatively higher in AUckland than tey are in Hamilton...

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Quick search on SEEK, filter on wage, minimum of 80K for the financial sector returns 7 jobs in Hamilton. And 156 in Auckland.

so.....?

 

Both points are made re valid: not only are there more jobs in Auckland than Hamilton, there are more highly paid jobs in Auckland, as well.

 

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Not to worry, Auckand can just import people with kids instead.....and its not like there will ever be a downturn in future where two income households become one income households? That could never happen. Auckland has a thriving economy based on....based on....economic stuff....and cafe's and that tunnel their building....

 

And because the fourth law of thermodynamics states that Auckland property values increase at 10% pa in perpetuity, it'll be no time before you can make the most of all of that leverage and upgrade to your dream home! Get in quick before it's too late!

 

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The problem is mate, many landlords don't want kids... This is a very real problem my girlfriend and I have - do we spend our life savings on a leaky shack in Ranui just so we can escape the nightmare that is renting in Auckland and have consistency when we decide to have children?

 

Or do we hunt for a landlord that will actually allow children and hope he doesn't turf us out, praying that property prices might one day slow down enough for us to get a decent deposit on a house that's at a livable standard?

 

Lower and middle class families are trodden on in this country - they're just another opportunity for someone to make money.

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I am very surprised to hear that!  Why would kids have anything to do with it?  I would seriously be considering my options outside of Auckland, very seriously.  I've never been bothered with moving, to take advantage of an opportunity.  With a wife and three kids its no different.  Aside from gambling on property I don't see much opportunity in a place where housing is so expensive.  Getting costs down is the easiest way to afford a home, and I don't see how you can do that when you are paying 25-30k on rent.

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Apparently they don't want kids drawing on the walls, spilling drinks on the carpet etc - basically they don't want them ruining their investment. We went to house viewings with literally 40-50 waiting outside to view it and half of the people were young families who were trying to charm the rental lady - they seemed desperate, probably because this house was built properly and wouldn't be damp. We threw in an application but we were almost in shock about the amount of people there - we ended up being offered the house, because we don't have kids.  Another agent on the phone was completely honest, asking if we had kids and and saying we had a chance because the landlord doesn't want kids - it was very common...

 

So when we decide to have children, will we get kicked out of our rental accomodation?  Or do we stretch ourselves and get a massive mortgage for a cold damp house?  This what New Zealand's come to - we have a government that doesn't care for its people...  It's depressing out there - people are doing it tough in Auckland.

 

PS That's exactly what we'll be paying - $26k a year for a two bedroom split bungalow in Western Springs.  It's much more than we want to pay but my girlfriend works in Albany, me the city, but most importantly I help care for my sick father regularly who lives far west so we needed to be relatively central.  If I had the choice I'd leave this @rsehole of a city but my hands are tied.  F*@k you John Key.

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The hell you say!  Why, I have been repeatedly assured by landlords that they're kind-hearted philanthropists, driven only by a sincere desire to provide shelter for families.

 

Maybe that's only the ones who have been visited by ghosts at xmas.

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Provincial NZ housing may be cheaper/affordable, but there is little or no (or negative) capital gain.  So your mortgage on your provincial house is not going to shrink against any growth in equity, or any income growth. 

 

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It will shrink relative to income growth, in fact your income will buy a much better home.  Look at what 800k will get you in one of those provinces.  Honestly, have a look.  You also have the option of wasting far less money on interest payments.  Friends of mine blew out their mortgage in 3 years, before they had kids.  Both just had working class jobs, waitress and manufacturing.  Now they have a small mortgage on a better house, with one income.  Basically living a good life with spare money to spend, save or invest.

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"there is little or no (or negative) capital gain"

The future can easily be worked out by extending the past so the time to buy is after the asset has been rising at double digit rates for a decade or so. Fill your boots, it's obvious this will continue to infinity and beyond, .

What could possibly go wrong.

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Nice sarcasm. 

I've actually got a bet with Matthew Gilligan that PN will out perform auck on the capital gains front over the next 5 years.  Not using 'median sale prices' which means nothing, but using proper index data.  Im still feeling confident.

 

Someone should plot those affordabilitty %'s against city/town size and look for outliers (large cities that are unusually affordable for example that deviate from the expected linear relationship).  Without doing this I'd guess PN being the 5th largest city in the north island (behind auck welly ham and tauranga) with affordability of 18% would be an outlier representing one of the 'best value' markets in NZ.  

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But our household survives on $800 per week, we have a child, we go out for dinners etc, I'd hardly say we do it tough. So it must be still quite possible for first home buyers in Auckland. 

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how much WFF do you get?

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hang on a second? why use median wage and lower quartile house? What do lower quartile income earners do? What do couples with a kid do? 

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The simple and tragic answer is they can't afford to buy

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And instead of simply lamenting the fact, we should ask why housing has got so unaffordable? What's causing it? Who's profiting?

A roof over ones head is a fundamental right, as are access to food, clean water and air, schooling....

Why are our fundamental rights being sacrificed for the good of capitalism?

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Your "fundemental rights" stop where my wallet starts.

Those of us who have slaved all our lives to own a roof over our heads by dint of sheer hard work are not going to subdise the likes of you who want everything to be made easy so long as somebody else pays for it.

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Yer - how dare you challenge Big Daddys right to make $1000 per week sitting on his big bum?

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You can't even argue with this kind of stupid.  Poor you.

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BigDaddy - who's asking for subsidies? If you have several rental properties, where the renters are getting accommodation allowance to be able to live in your properties, it is YOU being subsidies, not me.

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Instead of playing the person instead of the issue, you are dragging this debate down into the personal - it is a well known and well documented tactic to avoid discussing the issue.

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If avoidance was not your point, I will have to assume that your comment was made from a position of ignorance.

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The 'system', for want of a better word, has allowed citizens' rights to housing, food, educatiion and health care, to be eroded. Governments have handed the responsibility for this over to the private sector.

This in turn has led to the erosion of our rights - yes, RIGHTS.

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It is you, who has dipped into my wallet (wuith the helpp of the government), and the wallets of countless others who pay more than they should for a house, or who are locked into eternal renting.

Make no mistake about it: you're the parasite, not people struggling on benefits just large enough to starve them. If it wasn't for a system rigged in your favour, we wouldn't even need these 'benefits'.

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I'd like to know more about these rights.

Would someone who grew up on "Paritai Drive" have a right to a benefit large enough to rent or better yet own a house on "Paritai Drive"? What happens if every couple there produces 2 children each of whom marry someone not from "Paritai Drive" ? Would the number of houses there tripple? ( 2x for the children and their spouses and 1x for the parents)

Is this a right to live wherever you want in high quality accomodation? Who pays for the construction of this accomodation? what happens when too many people want the same spot? 

My understanding at present is that Auckland is currently a high demand area, high demand areas are expensive areas, being able to live in an expensive area is a luxury.

Do we have a right to free luxuries?

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Auckland is a low supply area and this is the problem. Those who live there have no choice but to outbid each other for a diminishing pool of properties relative to population.

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...funny how the financiall succesful always delude themslves that it was their hard work that did it....and not luck. Plenty out there are working harder than any landlord ever have, but due to circumstances out of their control they are doomed to a life of serfdom. 

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Sooo, everyone on earth who is financially successful is not smart or hard working, just lucky.... 

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Yep, and despite your protests your comments the other day show you know it also. My intuition has been correct in regard to your smart arse comments over time and it is why I don't bite.

 

Richest man in the poorest street syndrome, good luck with that strategy. You might get away with it, your kids won't.

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Hard work?  Residing over 12% capital gains and not paying tax and you say that's working hard?  You're an absolute joke mate - those with capital are growing their wealth by amounts that workers cannot even dream of, and tax paid is minimal.  This system benefits those with capital and you think you have slaved??  You climbed the ladder and you've pulled it up.  To think you've "slaved" is ridiculous - you're deluded.

 

You don't even have to ensure your rentals are warm and dry.  You can just rent out leaky shacks for buckets of money.  Heard of having a conscience?

 

Is this really Ollie Newland?

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Don't forget the criminals.  Lots of methamphetamine profits sloshing around in Auckland real estate. 

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I bet the field you work in is full of meth head criminals. 

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Yeah, it is.

 

Law enforcement.

 

Duh.

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That makes sense, public servent with no understanding of the real business world. 

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Sounds like it is you that have no sense of the real world that protects the businessman, which is slowly losing its ability to pay as people like you abuse their goodwill. Second time I will wish you good luck, which is when you need their help. Maybe that help will be to evict a tennant, hopefully Kakapo will have a Chinese partner that understands how the world really works and waits for your bribe.

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Where do you think that capital came from?  Lotto tickets?  The main reason people get in a position to buy rental property is because they are successful in their chosen field.  So successful that they have money spare to invest. 

And why do you assume that all rentals are leaky and cold, Bid Daddy could be perfectly nice and respectful to his tenants.  Your prejudice comment stinks of tall poppy syndrome, you should work harder instead of ranting harder. 

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Oh for chrissakes stop being such a child.  If people can't have a general conversation about wider economic trends and the myriad drivers behind them without you taking it personally and chucking a huge flaily tantrum ... jeez.

 

Yes some people got lucky, some people are genuinely self-made, some people inherited, some people are laundering criminal proceeds, some people married it.  Nobody said ALL were lucky.  That's just your dumb strawman.  Go look up the excluded middle and no true scotsman fallacies while you're at it. We'll wait here.

 

And yes some rentals are palatial, some are very nice, many are decent, and many are damp, scummy and overcrowded.  All are owned by landlords.  You can't just pretend the scummy ones don't exist and dismiss the whole issue as non-existent.

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You need to re-read some comments, the PI's on here get relentless abuse by children like yourself and the comments are loaded with assumptions, innuendo and other nonsense.  We are just the latest groups of successful individuals to be attacked by the raving have nots who can't be bothered working for a living so they stick their hand out to the government.

 

Instead of whining like a little girl look up tall poppy syndrome, get a job and stop being a drain on society. 

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No, the point is, it isn't all about you.  There's a whole world outside your head full of stuff that you didn't make up.  Try to notice it someday.

 

It's a simple fact that since methamphetamine went mainstream in the late 90s, huge profits were made, and a good proportion of that money went straight into Auckland real estate.  Sorry if that doesn't fit with your Horatio Alger fantasies, but tough.

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Talking of made up stuff, I trust you have a link to back up your "meth goes into Auckland housing" comment...  Or is that just more hearsay. 

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Here, let me google that for you.

http://www.stuff.co.nz/national/3946024/Police-swoop-on-Auckland-firm

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11250366

 

It's the other side of the staggering-number-of-contaminated-ex-meth-lab-properties coin.  And of course it doesn't just apply to Auckland. 

 

That's just a couple from the first page, going back only a couple of years.  Take the search back to the late 90s and you'll find a lot more, but I don't want to trigger the spam-traps by posting multiple links. 

 

If we could drag this back to the actual topic, don't go missing the real point of this, which is a) money launderers don't care if they overpay; b) these prices count towards setting the benchmarks when people list for sale; and c) this is a honking big chunk of income that isn't counted in the Statistics NZ income figures that were used for the affordability figures that this article is all about.

 

And before you take this personally and start flailing again, I'm in no way implying that you bought your assets with the proceeds of crime.  I have no way of knowing whether you did or not, and have no reason at this time to suspect that you did.

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What's that link supposed to prove?  One person got arrested for drugs and brought Ferraris and a Auckland house with their drug money?  What's that got to do with the thousands of honest land lords out there?  You have no hard facts to prove any of your rediculous claims. 

 

If I start making wild, unsubstantiated allogations about you and the industry you work in I'm sure you would get defensive. 

BTW, your personal smears and pety childish jibes say more about your character than mine.    

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Oh god, try to think things through in a coherent way would you and stop conflating multiple threads into a big ball of hurt feelings.

1.) Some landlords are honest.

2.) Some landlords are criminals.

3.) The statement that 'some landlords are criminals' is not the same as 'all landlords are criminals'.  Kind of like how 'dolphins live in the sea, fish live in the sea, therefore dolphins are fish' is wrong.

3.) The money that has been poured into NZ property has come from different sources from different people.  Earnings from businesses, inheritances, crime, lotto wins, cashed-up expats, etc etc etc etc. 

4.) You presumably fall into one or more of these categories, but we have no idea which one(s), and it's irrelevant anyway, because what matters is the collective big picture, not some random dude's wounded vanity.

 

The big picture:

 

5.) Some of the money that has gone into the property market is crime profits, which aren't counted in income stats.

6.) In the period 1997 to present, a lot of this money went into the property market, and was one of multiple factors contributing to the bubble.

7.)  This, and numerous other factors (expense of building, council permits, immigration, blah blah blah, have contributed to current situation of extreme unaffordability for working families, but leaving the city isn't an option for many, because that's where the jobs are.

8.)  All of this has far-reaching effects on our economy, demographics, and society.  Shall we talk about that, instead of making it all about you?

 

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Sigh...  What can I say when someone is so blinded by jealousy they loose all reason; you've fallen into a imaginary world that's disconnected from reality.  I feel sorry for you on so many levels. 

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Projection.

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The first case above disappeared into a black-hole

The public is oblivious of what's going on

That was in 2010.

Nothing disclosed or followed up since

Whatever happened?

 

If that can disappear

Imagine the stuff that doesn't interest the media

Was somebody paid off?

Silence

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Searched on a couple of the names, and the beginning of the trial in Feb 2012 was reported, and coverage finished with this story:

http://www.stuff.co.nz/auckland/local-news/6862067/Drug-ring-kingpin-ja…

 

By that stage the media had probably lost interest.

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Was looking for Xiang Zhang of Glenfield and money laundering - is it the same case? No mention of the confiscation of the proceeds of crime?

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I searched on Xiang Zhang, and one of the Thai names.  Not 100% sure it's the same operation, but it looks likely. 

Court isn't sexy like kicking in doors is sexy, so by that stage media aren't going to bother unless there's an All Black involved.

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90% plus of NZ is not auckland and is shown to be affordable.  The right to affordable accomodation exists in NZ as you request.  Just not in auckland.  Move.

 

It's like shopping at Kirkaldies and complaining that there are no affordable linen options (cheapest I saw there were over $100 for a couple of sheets...). 

 

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Show me the jobs available outside of Auckland.....also: why push the solutuion for affordability on to the people who havent' caused it?

If a person is bron and bred in Auckland, have their friends and family and support network there, why should it be up to them to move out?

.

Why should we keep on tugging our forelock to those who are benefiting from the status quo? We should be looking to change the status quo and make society more equal.

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Your arrogance astounds me.  I'm a born and bred Aucklander and I'm living back in the city I was born to care for my sick father.  You have no idea what life is like for some people.

 

The lack of empathy and understanding from some New Zealanders is crazy - there are sociopaths everywhere...

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It was a general comment suggesting a solution for those who want better value everything outside of auckland, nothing to do with your individual situation which I know nothing about..

Moving out of auckland for a lot of people is a very logical way to get a dramatically increased quality of life.  For 600k you can literally buy a mansion in most other parts of NZ; tennis court, pool, separate rumpus room for pool table bar or gym.  Easy commuting everywhere, cheap parking (often free at workplace).  

And its a very common move for families who simply can not find the time or money to put up with the obstacles large cities place in front of them. 

 

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If all those struggling to buy a home in Auckland quit, as you suggest, there would be insufficient work and accomodation outside of Auckland.

High house prices in Auckland are a contrivance, a collusion between local government, wealthy land owners, building companies and the banks.

Housing doesn't have to be expensive, it's just convenient and profitable for the few to keep it that way. We have the land and resources to fix this problem.

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Exactly ian64, this whole article by AMP is basically saying that they don't like the answer that housing is unaffordable so they will change the question until they get the answer they want.

It's so flawed it's about worth the same level of attention you give a barking dog, ie annoying but hardly has the mental capacity to engage in an debate that will logically change its behaviour and therefore best ignored.

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Absolutely, the scenario is completely contrived and doesn't follow historical norms.

They're saying: a median income couple can buy a low-end property and can't have children until their late 30s if at all.

The median income value smells a bit fishy to me too. 

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ah ah the median income value is correct. That's the main problem! Wages are low incomes are low end of the story. 

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Although AMP360 sponsor the report they do not prepare it. It is prepared independently by interest.co.nz and always has been. The income figures we use are based on data gathered by Statistics NZ from employers, and allows us to make adjustments for the age of workers and the regions they work in. The 40% of net income threshold for affordability is not new. We have used it in the report for many years. Although it is an arbitrary figure, we also publish the actual income amounts and mortgage costs we use in the calculations, enabling readers to determine for themselves how well they reflect a real life situation. 

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Greg - what made you change it to 40%?

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It has always been 40% (of net income) since the reports were first produced around 10 years ago.

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For it to be useful in judging real-world affordability, shouldn't it include, or at least consider, inflation in othe commodities, like groceries, fuel, and energy?  How long have you been using the 40% figure, and how much inflation has there been in essential commodities and utilities since then?  Was 40% settled on before or after GST was raised to 15%?

 

I suspect there may be a bigger picture here which is being overlooked.

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Low income people get govt subsidy to pay rent to landlords

Landlords get tax free capital gains, tax breaks and rent allowances from govt through low income earners

Middle bugger like me gets it up the backyard. What does it talke to start a revolt?

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Read animal farm.

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"And everyone but the rich are pushed out ever further into the boondock burbs. It’s a ‘policy’ that kills cities, of necessity. Cities need people, real people, all people, poor and rich and old and young, that have grown up where they live, they love where they live, they are interested in making it look good and feel good. This is an ongoing and organic process, because cities are alive, and yes, you can kill them.

 

Back to New Zealand’s reality for the vast majority of people, who will never be able to fork over 100s of 1000s of dollars for a house. People like the workers in the timber industry, who see slowing Chinese demand translated into job cuts both for those who cut the trees and those who transport them.

 

Again, a dumb idea to base a whole industry around one client, but the men and women who did the job were just glad they had work. And now they don’t anymore. Jobs that in all likelihood will never come back again. China won’t have another debt-financed growth spurt, and there are no other candidates waiting on the horizon."

 

http://www.theautomaticearth.com/2015/04/theres-trouble-brewing-in-middle-earth/

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