Anthony Healy tweets apology for Tony Alexander's 'inflammatory remarks' about the housing crisis, saying inter-generational debates aren't helpful

Anthony Healy tweets apology for Tony Alexander's 'inflammatory remarks' about the housing crisis, saying inter-generational debates aren't helpful
Cartoon by Jacky Carpenter

BNZ’s chief executive Anthony Healy has taken to Twitter to apologise for “inflammatory” comments made by the bank’s chief economist.

Tony Alexander, in last week's version of his weekly newsletter had a dig at young people, saying they could get on the housing ladder if they made the same sacrifices the baby boomer generation did when they were younger.

He suggested they “find a dunger or even a meth house to strip, and do it up”, “spend as much on lattes” and hire as many “feng shui consultants” as the boomers did, if they want to buy a house.

Causing a flurry of debate, Alexander’s comments prompted BNZ to make a blog post saying: “Tony's comments were typically provocative and it reflects his personal views rather than the view of BNZ as a whole”.

Journalist Damian Christie challenged BNZ’s handling of the situation, tweeting the following:

This prompted economist Shamubeel Eaqub, who in 2015 called Alexander a “show pony” for suggesting a whopping 76,000 homes were needed to plug Auckland’s housing shortage, to take the matter directly to Healy:

Healy then commented via a series of Tweets on Saturday:

I don’t support Tony’s ref’s to meth houses etc, not helpful, but point is we have a housing affordability crisis, so…

need to adjust expectations on what & where we buy, how we spend & save, and how we find new solutions for housing crisis...

so debate on baby boomers vs gen Y doesn’t help. We need joined up solutions from council, govt, private sector and NFP’s…

at the moment, everyone is trying to solve separately… lots of sincere options. There is no solution…

and yes, I apologise, on behalf of BNZ, for Tony’s more inflammatory remarks. We need solutions, and…

need to adjust expectations on what and where to buy, and how we spend and save… just like earlier generations who faced…

other challenges in their lifetimes. But, rather than attack each other on twitter, we should work across govt and private…

to address supply issues, accelerate outcomes of unitary plan, address land supply issues in AKL…

look at more innovative solutions for infrastructure funding in AKL, incentivise regional growth & development outside AKL…

deeper capital markets, tax reform, shared equity models, more leasehold land availability, reform of resource mgt act...

but most importantly, a joined up approach between council, govt and private sector… which we don’t have today…

too much politics, not enough practical working 2gether to find solutions… in mean time, young ppl can’t afford homes.

BNZ also responded to a number of Tweets on the matter, pointing people to its blog post, which went on to say:

There are many causes of the housing affordability crisis and undoubtedly, as many commentators have said, the biggest is a lack of supply, particularly in Auckland. This is why we have been supportive of ways to increase supply, like Auckland's Unitary Plan.

Our own research tells us that nearly 60% of non-homeowners say they don't see buying a home in the next five years as achievable. That number is far too high.

It's always taken an effort to save for a deposit, but our research suggests that saving a deposit in the current housing market is often overwhelming and unachievable.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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.

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" find a dunger or even a meth house to strip, and do it up." ... yeah... right....

What he's really trying to say is BNZ will lend you money to buy a meth house. They'll lend more if it currently has a working meth lab.

Yeah, that's how I read Tony's comments. The banks marketing department will be loving it. Be good with money... buy a meth lab with the banks money.

I figure that meth lab should fetch an EBITDA multiple of 7-9x? Might be tough to find audited books though...

Return on capital is probably around 100 times or more. There are only two reactions (including an isomerisation) from the input along with two purification steps. The yield should be high with a skilled operator. From what I see in the news reports the labs are poorly ventilated so that keeps costs to a minimum (except during a fire).

It's a low capital venture so is perfect for millennials with no money.

Yeh I'm sure the bank would be willing to lend the extra capital required to make a former meth house liveable, on the promise of its value going up. Regardless of the house's history being visible on a LIM report.

I wonder how Credit will be responding to this one:

Relationship Manager: "I have a potential new client - a FHB, wanting to use the Welcome Home Loan Scheme, builders report come back: a bit of a dunger, oh, and yeah, meth results through the roof"

Credit: "Hey, not a problem, checked with Tony, all good. Approved"

so boomers got on the property ladder by purchasing a meth house. Funny i thought we didnt have a meth problem back then.

As a follower of Tony Alexander over the past six years or so I have the greatest resect for him as a commentator with well reasoned opinions. As with any commentator's comments, one questions and doesn't necessarily always agree.
As a BNZ customer, for me Tony Alexander is a significant part of the BNZ brand and the outburst of public criticism of him has hurt the BNZ brand more so than Tony Alexander's comments.

I resect pretty much all of his advice also....

Well duh. TA hardly adds value to the brand if he pisses off the potential customer base.

One of tony alexanders responsibilities is to inform senior management about risk. He is the fundamental archetype of a wanker. BNZ senior management should replace him, cull the risk, and not hide behind him. Promote Kymberley to Chief Economist. Time for change, put a female in charge BNZ.

Just one thing, just consider the mind set of the senior people first before you blame a minion. These days you may well find senior management dont want to know about such potential problems, that way they can pass the blame down the chain in the event it blows up on them, if it doesnt they get a nice fat bonus. So really the likes of TA etc is just canon fodder who you would swap in for more canon fodder.

My how fragile we have all become

The comments got backlash because they are out of line , and out of touch. They also prove the point of many young hardworking kiwis, that the older generation blames them, for their lack of housing success. Think about this in context. You can't blame the response.

Imagine being a FHB with a young child moving into a former meth lab house. All surfaces contaminated with solvents with known carcinogenic, mutagenic and teratogenic properties. Living in a bunny suit with a respirator sounds like a real lifestyle purchase, and a child-friendly environment.

I could think of more effective methods of living, investing and better decision making processes.

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The disconnect between the 'haves' and 'have nots' is becoming clear.

I'm not sure whose 'reality' is more accurate - the haves or the have nots. From my position, I think some of our 'haves' are becoming delusional - and this includes the likes of Tony Alexander, John Key and Bill English.

The haves simply deny there's an issue. And if pressed for an explanation - blame it on the have nots who have very little control over the situation they find themselves in. What kind of society is this New Zealand - frankly, its starting to suck and isn't the culture I grew up in - something needs to change....

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This is very much the case. The "haves" don't have a lot of contact with everyday people which makes them disconnected. In this case Tony's poorly written "financial advice" hasn't survived peer review by an economist or the general public. The backlash against BNZ is well deserved just for the arrogance, let alone all the lies, that their representative has published.

I'm amused at the number of people in the stuff comments that are attempting to marginalise those that are offended. The sad thing about those comments is they don't care about anyone but themselves. I agree that New Zealand needs to change and there's a lot of room for improvement.

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Something does need to change. But you just get up and try and bring about change in NZ. Nobody agrees, nobody understands, nobody gets it, or your comment gets censored.....and in the end they all give up and flap down the beach in their jandals for another barbie.......

You hit the nail on the head, Wolf. People (especially us Gen Y'ers) are horribly apathetic, narrow minded and simple when it comes to change, financial literacy and progress. We're the country cousins of the West. Look at France, Germany or even the U.S.A, and how they protest, organise rallies for various causes and attend demonstrations and marches. New Zealand doesn't do any of that. We think we live in the greatest country in the world, but New Zealand has nothing you can't find anywhere else.

We have a strong element of sheeple in us - must be the farming background.

Dangerous to be outside the herd. Easy to govern. Never second guess status quo.

Kiwis used to know how to protest. Look at the early labour riots. Look at the riots over the Springbok tour in the 1980s. However, I guess this was when people were really in pain and could see the cause of it.

Right now, I think many are yet to identify that there were reasons of policy why houses were once affordable, and reasons of policy why they are no longer affordable. Too many are thinking this is just bad luck that can't be controlled - not policies that can be changed.

Once they realise they've been shafted by policies that benefit only business owners and property investors born at the right time...well, will we have riots again...?

Maybe it depends how much pain the government and their investor-voters stack on top of young Kiwis?

That was when all of the baby boomers were doing drugs

We used to be like that. Think about springbok tour, anti nukes, gay rights. I don't know why but we have lost that and have become a really self interested nation. I detest where this country is and where it is going

Making it so that people have to put every ounce of energy into keeping a roof over their heads or food on the table will find it difficult to think much beyond that.

Surveillance state and job insecurity.

But then, there's that growing underclass that people appear to be quite comfortable in further marginalising and leaving with nothing to lose. All those young men who have been told they're unemployable and to not even bother applying.

The lack of investigative journalism doesn't help either.

Well said Wolf of Wall street. All just a pack of whingers.

Totally agree, but its not just NZ, this is world wide.

I feel that more than most nations nz adopted neo-liberalism. I know a lot of boomers who have that world view or something close to it. I am speculating but maybe it has something to do with our isolation and frontier/pioneer mindset

He was just being facetious.

The article about the "apology" was on Stuff, and it attracted a lot of Boomer comments about how he is right, how us Gen Y'ers are the "I want it all now generation," and that we're ungrateful and lazy. Kinda sad stereotyping an entire generation.

What the boomers are saying is that they don't want to take our tax money as their pension and they'll give it back right?

Stuff commenters are the worst.

Stuff is a cesspool in general. Copy-pastes from other media outlets, manhating and misandrist "opinion" pieces, actor/actress/celebrity gossip no-one cares about, aggressive feminist and SJW articles... I find my factual, non-offensive comments are always censored on there because they are constantly against the (leftie and feminist) status quo.

Which is funny considering how right wing I find stuff.....no wonder you get censored....

The comments section is full of right wing misogynists for sure

NZ - or 'middle New Zealand' - has a seriously large number of those types.

Is there anything else though? The Herald isn't much better. Where are the hard hitting journalists, revealing corruption and holding business and politicians to account? I see more investigative journalism in the comments on Interest.co.nz than I do in Stuff or the Herald!

The "back in my day it was hard" crowd possibly need to remember that back in their day the pensioners of the time couldn't afford to have flat whites regularly and an overseas holiday each year. They didn't have swollen property nest-eggs and large passive income in addition to the free money in the Pension. The Pension was given because it was needed. It's ridiculous that we're giving the Pension to landed multi-millionaires.

If the shoe fits wear it.

I think I've found the solution for young kiwis!....We should legalize meth production in NZ (make it our new primary export industry). Then we can borrow money from BNZ per Tony Alexanders advice. We can work from home and be self employed. Because its legalized, Bill English and National will get their taxable income from the trade. The boomers can retire and get superannuation. Young people can fail drugs tests but it won't really matter because its encouraged to quality check from the production line.

Sounds like a win-win right? Or am I just being delusional and making stuff up like the leadership of NZ?

Now you're smoking the same glass pipe as Tony and Bill.

The business end of their crack pipes must be hot to the bloody touch.

Judging by recent comments by Tony and Bill I suspect they use lead based paint to cool their pipes.

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"I don't support Tony's [references] to meth houses etc, not helpful, but point is we have a housing affordability crisis so debate on baby boomers vs gen Y doesn't help," Healy wrote on Twitter.

So Bill English - Do we have a housing affordability crisis, lets have a vote on that topic.... You have lost control of the Naritive in an election year Bill... is that a sign of success....

I wonder if the smarmy smirk has disappeared for the day. Kind of disappointing that it took a Damian Christie to pick up the challenge. Another media head who carries a certain self satisfaction.

Damian Christie is awesome... Wouldn't want to get in a war of words with fella'!

In what respect is he "awesome"? Where does hie derive his power? From being a media lackey?

It's hardly a decent apology in my view.
He skirted around the meth house comment, didn't say anything about the frankly insulting comments around young people fritting away money on lattes etc.

As usual the deeply superficial MSM turn one ill considered reference to meth houses, into the story. Healy's response is the usual bland corporate affairs spin, to sooth ruffled millennial feathers. But looking past the smirk and perm, Alexander makes some valid points. Wolf of Queen St nails it - why is there not loud debate of Alexanders stirring the pot ?

Partly because very little of what he has said is constructive towards solving the structural issues.

Alexander would argue he has done just that by telling millennials to cut out the lattes.

How will they impact the cafe business? Will that have any impact on BNZ's bottom line if the kids are feeding their income on debt instead of latte? Will the cafe owners and their suppliers suffer?

Lets not forget about the potential impact the all the feng shui consultants, I fear for their futures after this..

The point that Tony Alexander was trying to make is that the non home owners currently, need to,change their thinking on how to be able to purchase a home!
Get off your butt and work for it like most people had to many years ago.
It doesn't always just fall,into,your lap, and most people who are well off financially today have not become in this position, solely because of when they were born, like many on here state.
Mr Eaqub should also not be commenting on Mr Alexander, as Mr Alexander has been far more accurate in his statements than Mr Eaqub has been, and in fact has cost many non home owners a lot of money due to his wrong advice over a number of years!

The fact is, no matter how many times a person insists that the finances of home ownership are just the same as they were for previous generations, it's simply not true.

That's not to say no one worked hard to own a home. That's not to say life hasn't been hard for other people. But we do need to recognise the facts.

Home ownership is far more out of reach for much more of society today. This is due to the declining viability of purchasing a home.

It's also perfectly reasonable for young people to demand action on policies that will make homes more affordable, up to and including by making them less attractive as speculative investments. And really, if older investor-voters didn't think they'd work - and thereby lower their portfolio value - they wouldn't mind at all for policies to be changed in these ways.

That suggests young folks are on the right track in demanding change.

@rickstrauss

I'm a boomer and the grim fight to get established with our own house is a still very painful memory. Our standard of living at that time would today place us in the deprived category. Ignorant XY/millenials blithely minimising those intense struggles deserve the push back they are getting.

But I have to concede your point that in AKL, home ownership is now further out of reach for my kids than it was for us. And they don't have the potential for inflation to be the magic carpet that carries them out of mortgage misery.

Market forces are beginning to deliver the solution in places like CHCH where supply/demand has balanced. If the govt interventions some were clamouring for had been implemented down there, we'd be facing a more painful landing.

The wide scale equity destruction that would be the outcome of many of the heavily interventionist solutions proposed on this forum, would shift the pain from aspiring FHBs to existing homeowners but in the process inflict significant damage on the same community that employs those FHBs.

There is a strong case to be made for a gradualist approach.

Thanks middleman...it sounds like there's some common ground to be had between generations. Perhaps there's hope for implementing solutions that balance things out gradually.

Fair point - just as there's too much mischaracterisation of young Kiwis as being latte-swilling, smashed-avocado eating (the worst of the worst sins!), Sky TV-watching (honestly, what young Kiwi pays for Sky TV?), money-squandering layabouts - lest I forget, being too drug-addled for NZ companies to employ, so we also need to be careful not to minimise the hard work that older generations had to go through to get into a home.

I think young Kiwis need to be aware of all the efforts that earlier NZ governments went to in order to foster home ownership in NZ - including Land Tax to break up land banks, government builds, cheap loans, cheap government leasehold land etc. - and realise that there are reasons of policy why home ownership rates grew to be as high as they did, just as there are reasons of policy for why they are now declining so steeply.

Perhaps the first step is to tweak immigration volume down slightly - and change the mix while we're at it, ensuring skilled means skilled - and implement a foreign purchase stamp duty the likes of which Vancouver has (perhaps 15-20%). We don't need to be a destination of choice for money laundering and/or stashing in property, and we're clearly having issues with bearing the load of National's tap-wide-open immigration volumes.

Those I know who work in the building and housing industries suggest there's a high volume of unoccupied houses and it's a well-known secret in the industry. Perhaps it's also time to look at measures to get those to the rental market.

It's ridiculous to say that Tony Alexander is more accurate. He completely missed the first OCR cut even though it was telegraphed. It this one he's saying to fix for 3 years, when things could go either way and there are some serious global bubbles that could burst in that timeframe.

"Get off your butt and work for it like most people had to many years ago." What can I say there are people working hard just to survive with no money left over. The working poor. The effects we see now are just a working version of the great depression. Think of all those lazy layabouts in the 1930s that weren't working, you should get in a time machine and yell at them.

Please explain how a FHB can afford to buy any house in Auckland? Most young people have their deposits locked into KiwiSaver and are only able to buy a house they can live in... I doubt you or many others of your generation had to buy 2 hours drive from your place of employment and spend four hours in the commute every day... You had free education (average education today is substantially more than free) and a whole host of other benefits that you can deny you had, but that just makes you a very big fibber!

Please explain how a FHB can afford to buy any house in Auckland? Most young people have their deposits locked into KiwiSaver and are only able to buy a house they can live in... I doubt you or many others of your generation had to buy 2 hours drive from your place of employment and spend four hours in the commute every day... You had free education (average education today is substantially more than free) and a whole host of other benefits that you can deny you had, but that just makes you a very big fibber!

Sounds like he's saying they just need to "change their thinking", then the economics of buying will adjust accordingly. Maybe he's advocating for that old canard book 'The Secret', where you go about asking the universe for money.

Wouldn't hurt to try, at worst it won't be much less fruitful as anything Alexander is saying. Get the foreign money out of the market, curb immigration and investors and it's all done.

Einstein: We can't solve our problems with the same thinking we used when we created them.

You're still stuck in problem thinking TM2, not providing rational solutions. In fact you're probably causing it by buying lots of houses (with someone else's money).

When house prices rocket, but wages are stagnant, it doesn't matter how hard you work, the deposit required keeps getting bigger, the carrot a little further out of reach.

We need high level policy changes - not advice from the 'haves' who are sitting pretty, handing out unintelligent advice. But thanks....

It is funny how The Boy attacks a very respected economist who thinks outside the square when The Boy himself admits he failed when he had a foray into equities. Mr Eaqub is very educated and I suspect The Boy is not as he has had to resort to property alone to get ahead in life. He owns a few "as is where is " properties in Christchurch then has the nerve to think we all should be impressed and further he uses that silly name. Wow. We all could own a few houses in Christchurch as they are hardly worth any more than an average house in a provincial city and they are in fact going backwards steadily and surely as the reconstruction work winds down.
He snivels and moans about rising interest rates and LVR's and DTI's and blames everyone else and says how wonderful he is. Mr Equab will have millions tied up in equities and other investments and has no need for poxy residential investments. I note the Dow is at 21000 and it has got there very quick. Equab will be riding hard on that upturn and many others do every day as the day trade all over the world. Property is not the only way to get ahead however The Boy thinks Christchurch property, Christchurch property , Christchurch property and expects everyone to be impressed. Property is only one way to get ahead. I personally have chosen both property and equities. Others only chose property and some only chose equities. I personally think you should cover both bases.

Gordon,not sure where you come about stating that Mr Eaqub is a respected economist?
What is his claim to fame, apart being totally incorrect about his housing predictions!! !
Possibly not as highly educated as Mr Eaqub, but am I more accurate at making correct financial decisions, and the answer is definitely yes.
I own 2 as is where is properties in Chch Gordon and both returning approx 15 per cent and will have insurance on both of them very shortly.
You are unable to make any comment on the value of my properties Gordon as you have not got any information on them!
I do not snivel,and moan at all regarding interest rates, only point out that they will not be increasing to large levels.
DTIs won't affect me as our LVR situation currently is ok and DTIs is affecting first home buyers.
How the hell do you know what Mr Eaqub financial position is Gordon?
If Mr Eaqub was financial savvy Gordon he would have purchased a home years ago, and he will admit this as he has said this previously.
He may be happy to be working till his retirement age however I am more than happy to have rental property as my source of income.
Enjoy your equities Gordon.

He calls himself " The XXX2" as he wants us to admire him and he now admits he has "as is where is " properties in Christchurch. Both returning 15%. He is so generous to his tenants. Mind you if they cost him say $100k including land and the rent is $30 per week that is pretty impressive. Yes when you own properties of that calibre The Boy is more appropriate. And he has the audacity to attack a person of Equab's calibre who regularly appears on TV giving his thoughts and views. Equab does not need a house as he has plenty of income to rent whatever he pleases and invest in equities what he saves in not paying "rent" to a Bank. Are you not the same person who has said that Auckland investors are subsidising their tenants as their rental returns are so poor. And property values in Auckland and Christchurch are reversing so Equab was right. No one ever knew how long that would take to happen and in Christchurch is it happening quicker than anyone imagined. The fact that rents in Christchurch are reducing is clear proof and proves Equab correct in his forecasts.

Gordon, don't need anyone to admire me whatsoever.
This site is designed to help people make financial decisions.
Too many on here have such negative views on everything, and there are a few that point out that housing providing they do it right, is a great way to get ahead in life.
But no, there are always a lot of big knockers who just want to complain.
You haven't got a clue as to,Mr Eaqub financial decision making at all and if he was that clued up, he probably would Have enough income from his equities to not need to comment on housing being overpriced for the last number of years.
We are getting just under $400 per week for the last As is where is property Gordon!
Finally, I won't ask again whether you are up for that $100k challenge, and the loser donates the $100k to the charity of the winners choice.
If you are not upto the challenge Gordon, then you should perhaps be known as "the boy" wouldn't you say?
Please advise as It is not worth my time continually asking you!

You kid yourself. The name you use on this site is clear proof you want people to admire you. Change your name to a less arrogant one and you might gain some respect. At least I use my grandad name.

Gordon, forget about the name.
A lady who I have assisted with financial,advice over the years, calls me "the man" and that is why I used the name.
It may appear condescending to you, but it isn't meant to be!!!
Are you on for the challenge, yes or no?????

I don't generally support The Man 2's comments and I don't own property in Christchurch.

But Gordon, if you want to be taken seriously, it's time to drop the silly name calling. That kind of debating should only be heard in the school yard.

Name calling isn't constructive and it doesn't enhance any argument, even when it's the right argument.

Maybe Mr Eaquib, simply comments on houses because he's an economist, and he understands the implications, not because he's a sore loser as you seem to imply.

Maybe a deal should be cut for this, kids work and save hard and the competition that boomers never had gets taken out of the game, investors, foreign buyers and too many immigrants, there I fixed it.

I remember when Mr Alexander predicted in 2014 that interest rates will rise and we all must absolutely fix for minimum 3 years or more. Did he get it all wrong or just lied ? I think he just got it all wrong. The point is, if anyone he should know, and he got this completely wrong. So get over it princess, he is outdated and his "opinion" is no longer relevant.

OH FOR GOODNESS SAKE !

Tony Alexander is right , it has never been easy to own your own home , 30 to 40 years ago people lived in garages or stayed in Mum and Dads garage while building the house .

And we did not have flash cars ( we walked , used smelly Leyland busses and we even used bicycles .........and not out of choice ) we certainly did not each have a car , did not have seven day shopping , credit cards whacking us 22% per annum , expensive lattes, OTT mobile phone accounts and all manner of fruitless and wasteful expnediture

Overseas trips were done once , it was called the OE , and certainly ordinary folk did not have overseas trips every year and we would never have dreamt of flying to Sydney " to watch a show" staying at the Hilton and flying back the next day

This generation have had it way too easy , and now expect home ownership to be just as easy as every thing else that has fallen into their laps .

Its not going to happen easily and youngsters need make some sacrifices , must knuckle down and save at least 10% to 20% of their pay each fortnight .

You know people don't really do those things these days either, right? Those folks who are looking to change policy to make homes more affordable aren't doing all those things you rail against.

Again - facts are facts, and the facts are it's much less viable to get into home ownership these days. Young people are right to be demanding action to make home ownership more accessible, just as previous governments did for earlier generations. Not for handouts, but for policies to be changed to make houses about homes again and not about nest-eggs for older voters.

People. Mr B is being a troll.

The real story will be if all post boomers decide to walk away from the BNZ i.e. how much mortgage market share BNZ start to lose from now and what BNZ attempt to do to stop the bleeding.

The reality is, there are a significant number of post boomers being very frugal attempting to save to buy a home, and Mr TA's comments/advice is not very helpful.

Back-of-the-envelope numbers suggest housing in NZ is around 25% more expensive today than it was some 30 years ago. That's adjusting for inflation, changes in interest rates, incomes etc.

If you have another envelope, maybe you could do a similar exercise with wages, I reckon that could have a "-" in front of it.

This is ridiculous you don't need an envelope, you can go to various data source online, and find hard evidence. As well as this it is usually as a house price to income ratio.
http://www.oecd.org/eco/outlook/focusonhouseprices.htm
Then remember that low interest rates only help once you have saved the deposit.

I recommend that people train for high paying professional jobs and save 50%+ of their pay. However most do not earn like that. Instead they'll pay about 11% towards their student loan (this is not optional) and at least 3% to Kiwisaver.

So really a lot of people are likely saving 14% already. To save 10-20% means they would actually be saving 24-34%. I would endorse such a savings rate but there's a lot of young people starting out in life who would struggle to save that much.

There was some things we did not have to worry about (among other things) and that was competition from investors and foreigners and over blown immigration. I AM a baby boomer and I KNOW it was easier in my day, much easier.

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You are right of course.

Boomers had no luxuries, they only had the necessities like fridges, indoor toilets, power, mains water and sewerage, TV's, landlines, and a car.

I wonder what their parents thought?

My wife and I own our house outright (we are Gen Xers I think). We skimped on a lot of the essentials, and skipped a lot of the luxuries. But more importantly we were able to do it because we earned very, very good money and bought a house that was only 2.5x our annual combined income.

Interestingly enough mine and my wife's, boomer parents also paid about 2x their income for the house.

But now back to reality, show me what you can buy now for:
2x the average income? or
2x double the average income? or even
2x quadruple the average income?

All metrics have it at between 9x and 12x. An average AKLD home is $1mil - that is 4x the average income just for the deposit.

So no, Tony Alexander is not right. The only way to do it like the boomers, is to go back in time and be born when they were.

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Lets logic check this Boatman - if I desire to buy a starters property somewhere in Auckland. Lets say the best price I can get is $650,000 after beating out a bunch of speculators and foreign buyers. Well below the Auckland median, so probably a lower quartile house. Nothing fancy. I need a 20% deposit = $130,000.

Hypothetically I'm earning a young persons average wage and end up with $800 p/w left after tax. If I save 10% per fortnight for this deposit as you suggest above, that's $160. I think I can do that. Now $130,000 divided by $160 = 812.5 fortnights or if my maths is correct 31.25 years to save a deposit. Not including compounding interest of course, but that gets taxed anyway so it's barely above inflation. But the key point here is 31.25 years to save a deposit using your suggestion.

I think you need to accept that the system is broken - not that young people need to harden up and save 10% of their income. Feel free to correct me if the calcs are wrong.

No doubt that buying today is harder than in the past however part of the issue is saving only 10%. I'm 25 and for the last 4 years since graduating I lived with parents and saved approx 60% of my weekly paycheck which was approx $650 p/w as my student loan repayments are taken out too. That's 20k p.a and over 4 years I saved close to 90k as income slightly increased. My wife had done the same but she started saving before me however when she graduated she was stuck on a gross income of 36k p.a for a couple of years as an accountant. Combined deposit was about 160k and it was enough. Together we can now together save approx 50k p.a and on-track to pay off the house in 10 years as we've got some boarders in our house to help supplement the income and incomes continue to increase.

We're only 25 yet we can achieve what many deem is the impossible. Others I've asked just put this in the too hard basket and ignore it so they spend beyond their needs. Basic sacrifices, started early and being mindful of what I'm spending my money on has made this achievable.

Your example does show how saving 10% is completely inadequate if you want to buy a house in the short term. For those that earn enough and are frugal enough to save 50%+ you can actually get somewhere.

Worth remembering too - especially given the stereotype of millenials as those who aren't saving - that to the contrary, millenials are actually saving more than the preceding generations did.

Source: http://transportblog.co.nz/2017/03/07/no-boomers-its-not-like-it-was/

Also lets not forget that you were both in a position to live with parents. Whilst your comments around basic sacrifices, starting early and being mindful are all valid nothing will trump not having to pay rent & bills alongside trying to save for a deposit. Not everyone has the option of living with family.

I agree, we're very fortunate to have that support since our parents didn't have any surplus cash. I just know that many of my peers refused to stay at home because they prefer the freedom of living independently. Coming from an immigrant family who moved here 22 years ago, with dad able to get a job in 3 days, sustain a family on one income and save for a deposit on a purchase within 3 years - despite the same savings patterns it's definitely harder today.

But you are also clearly in a certain position of privilege. Not all young people can live with their parents and not all young people could have lodgers (the may have kids for instance and no spare bedrooms).

I don't think it is right to claim Fintech is is in a 'position of privilege'. Privilege is a term that is really abused nowadays. His story sounds fairly, er, "common" for NZ. Privilege is like being Prince Harry or something. Generally in NZ most people, the great majority, live a privileged life, compared to most of the world's population, so really it is NZ's normal life.

I was at a dinner party this weekend and it was suggested that the problems of the world would be solved if we just euthanized all the Baby Boomers....

That would be wasteful. What you need is a cross between Logan's Run and Soylent Green. Anyone who was born before 1972 gets put into a sausage maker to feed the population.

We should probably start with the western worlds boomers first as they have the higher biomass. We could finally put the obesity epidemic to good use!

I prefer trim pork, myself. Dibs on Newmarket.

I think most people could develop a taste for "long pork".

That moment when you notice your crackling roast has a Fleetwood Mac tattoo ...

@kakapo LOL - hilarious, my morning coffee just came out my nose.

umm... we still need the grand parents to baby sit while we pop out for a latte or a weekend trip to Sydney to watch El' Circo

Good grief - that's spooky. I remember having exactly the same conversation about our parents at a party in 1970.

Killing you with kindness?

Nah. Depression era hard arses. Man up, no-one owes you a living, not interested in your bleating. You are on your own.

They'd be vilified for parental neglect today.

Boil them down and harvest their hydrocarbons.

Biorefineries are the way of the future. All a matter of what feedstock to put into them.

Sheesh, and I thought Cicada farming for insect pulp to be made into "chicken" nuggets sounded a bit icky...

http://www.interest.co.nz/opinion/64469/wednesdays-top-10-nz-mint-imf-gi...

LOL - what's Tony's excuse I wonder - did he write the piece while under the influence? I can see him being presented with a wee plastic bottle :-).

http://www.stuff.co.nz/business/90112025/young-buyers-are-spoilt-expect-...

Where do they find these delusional old farts. Who, judging by the photo were smokers. #ItsOKifYoureABoomer.

yep, the guy is smoking. So he may not have been buying lattes, but he was clearly blowing just as much money if not more on ciggies.
All this stuff is a friggin disgrace. Really offensive. What a bunch of idiots so many kiwis are.

Not unlike some species of reptiles which eat their young.

"Diane Stewart and her husband, Gary, bought their first house in 1976 when she was 19 and he was 20. He was earning $2.95 an hour and she was pulling in just under $2. They had a 10 per cent deposit on a $24,500 house in Hamilton."

So just under $5 per hour in wages, Their 10% deposit was about 500 hours of their combined gross income.

2015 median weekly wage according to StatsNZ was $22.83. Double it for a two income household and we get to $45.66. Using the $130,000 deposit figure someone quoted above (to get the most basic house available in Auckland). that'll take 2,847 hours of both earners gross wages to save up.

So it's at least five times harder to save a deposit than it was for you Diane.

It seems unfair to compare buying a house in Auckland with buying one in Hamilton. You can buy a house in Hamilton similar to the one they did for around $400K. Ten percent of that is $40K. 45.66 X 500 = 22,830.
So it is more like almost twice as hard to save the same amount of deposit these days. Hamilton has improved quite a bit since then too so maybe a better comparison would be buying a place up to an hour's drive from Hamilton. You can get entry level places in the low 200K which would be 500 hours work for ten percent of the value.

Our first house in 1974 was $23000, was on 1/3 of an acre, was semi-rural South Auckland, but just a few minutes out of town, overlooking the Manukau Harbour, just a walk down a rough track to our boat, go catch a few fish or have a waterski. It will be well over a million now, it will never again be home to first home buyers.

Things change, cities grow, suburbs gentrify. The North Shore in Auckland was once full of baches but then they built a bridge. Motorways have been built, cars are cheaper and better. Shopping malls have sprung up in new centres. Immigrants have poured in, changing the ethnic mix and expanding the prime real estate areas. Believe me it would be a far worse situation if the opposite was true and that first house of yours was now worth much less than it was way back then.
The whole of Manhattan was bought for about $2000 in today's money.

The media in this country is really depressing. At least in Aus they have a couple of semi credible newspapers, and some good tv journalism.
Thank God for www.interest.co.nz !!!!!!

Australia has credible newspapers? Would you care to expand?

Question: when did the capitalisation of the family benefit stop.

Forget the Flippen Auckland housing market, as it is not the only place that exists in NZ, but you would think that is was, going by most people on here.
Generally working for wages or a salary in NZ, you will get by but it is hard to get ahead financially.
As always and as always has been, you need to do other things to be better off.

I know many people who own a home and are comfortable but still have a mortgage but haven't done anything extra to improve their lot.

It is still possible to buy a home and make improvements to it without spending a fortune and make more money on it than you can possibly save.

This is how most successful property investors that I know have got ahead over the years, but then if you are happy enough with doing nothing, then you should not be jealous of the people who do wish to improve their lot.

I care about everyone in New Zealand, especially those suffering in Auckland. It saddens me to see that you don't care that they essentially have to try to find work outside of Auckland to try to improve their lot, and that many are financially trapped there.

It's possible for about 50% or so of the working population to buy a home. I don't think that's the point where we declare all of New Zealand's problems solved. We also have record household debt. People may be happy that they "have it all" now but in the future they may be at the pub telling people how they "had it all" then lost it. I'd prefer financial stability in New Zealand rather than ranting and jabbering about people who want to "improve their lot".

dictator, you don't care about everyone in NZ at all!
You just want to moan about housing being out of the reach of people as it give you something to do, but pretty pointless really.
There has always been people in NZ going back 100 years or so that rent and will be going into the future.

If you care about everyone in NZ, then please advise us of all the caring things you are doing for your fellow New Zealanders??????

Problem is I don't think anyone is caring about "New Zealand" on both either side of the equation - only themselves.

Suggest you read this.

Those whose genius was being born at the right time need a lesson in history, in the efforts that previous generations and governments put into fostering a high level of home ownership in New Zealand. You did not pull yourselves up by your own bootstraps without any effort from your predecessors.

But you are abandoning the generations of Kiwis who follow.

Actually I've done my part trying to change laws and regulations rather than sit back and be a moaning Christchurch landlord. I still apply pressure to MPs and relevant Government departments. Sometimes they ask for help and I help.

I also go out of my way to educate people to understand how to improve their finances although I don't limit that help to just NZ.

I've provided a short list of what I do. Now TM2 list all of the caring things you do to help New Zealand.

Tony Alexander shouldn't be thought of an economist. He's a media personality aka circus clown.

His schtick for getting eyeballs is attacking the young. Not much different to Mike Hosking.

Just think the average New Zealander gets sick and tired of people moaning their butts off without doing anything about it, and that is what Hosking and Alexander are on about.

So renovating meth houses is "doing something about it"?

That's the optimism we need, we already have a meth problem, but is it really a problem? when we can profit of renovating the meth houses. Sounds like a 'problem of success'

Somebody else has extracted the meth profits and stashed them in real estate, inflating the prices further, and now you get to spend a fortune clearing up the mess. Won't that be rewarding?

10
up

When you start quoting hoskings opinions to support your arguments then you have lost the argument

Given that you don't like facts TM2 I can see why you like Hosking and Alexander.

I enjoyed Tony's article. Lets not take it too seriously and lose our sense of humour

BNZ don't seem to have a sense of humour at the moment. They won't reply to my tweet asking how much they would lend me to buy and run a meth lab.

Generation Snowflake has created a swathe of young people who expect everything now. Things are no different than they ever were. If you can't afford it: save up, find a cheaper location, find a smaller house, get a cheaper car, get rid of the expensive mobile phone, make sacrifices like every generation that has come before you. Stop moaning and get on with it.

You seem confused. Generation Snowflake = Boomers. Boomers do need to stop moaning.

Allow me to assist you with some facts about why you're incorrect.

Beyond the standard "back in my day we had to walk six miles to school each day. Uphill! In both directions!"