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Home ownership increasingly the preserve of those on above average incomes as high prices and rising interest rates hit first home buyers hard

Home ownership increasingly the preserve of those on above average incomes as high prices and rising interest rates hit first home buyers hard

The dream of home ownership became significantly less achievable for first home buyers in July, with increases in prices at the bottom of the market and rising mortgage interest rates combining to push home ownership further out of reach for many.

The situation is now so serious in Auckland that home ownership is likely out of reach for young people on average wages unless they can provide a substantial deposit. The Bay of Plenty is on the verge of joining Auckland with Wellington not far behind.

According to the Real Estate Institute of New Zealand, the national lower quartile house price hit a new record of $600,000 in July. That's up $14,000 compared to June, and up a whopping $125,000 compared to July last year.

At the same time the run of record low mortgage interest rates came to an end, with the average of the two year fixed rates offered by the major banks increasing from 2.53% in June to 2.78% in July.

That was the second month in a row the average two year fixed rate has increased from its record low of 2.52% in May. Although the increases in prices and mortgage interest rates were relatively small, when combined they had a noticeable effect on mortgage affordability.

To buy a home at the national lower quartile price of $600,000, buyers would need $120,000 for a 20% deposit, meaning they would need to raise a mortgage of $480,000. At the average two year fixed rate of 2.78% with a 30 year term, the mortgage payments would eat up $454 a week, up by $25 a week compared to June.

The combined after-tax pay for couples working full time at the national median rate of pay for 25-29 year olds is $1767 a week. That means the mortgage payments on a lower quartile-priced home purchased with a 20% deposit would eat up just over a quarter (25.7%) of their after-tax pay.

If they only had a 10% deposit ($60,000), the mortgage payments would jump to $593 a week, up by $31 a week since June, and would eat up a third (33.6%) of their take home pay. If they were able to save 20% of their take home pay each week, it would take them 3.3 years to save a 10% deposit or 6.6 years to save a 20% deposit.

However, provided they could scrape together a deposit, the figures suggest the mortgage payments would be affordable for first home buyers at the national level.

The regional figures also show first home buyers on average wages should be able to afford a home of their own in most parts of the country. However that's not the case in Auckland, and the Bay of Plenty and Wellington are heading in the same direction.

In Auckland the lower quartile selling price was $860,000 In July, which equalled the record set in May and was $135,000 higher than it was in July last year.

That means a couple on the median rate of pay for people aged 25-29 in Auckland, would need to save 20% of their take home pay for 4.6 years for a 10% deposit ($86,000), or 9.2 years for a 20% deposit ($172,000).

If they had a 20% deposit for a lower quartile-priced home in the Auckland region, the mortgage payments would be $650 a week, eating up 36% of their take home pay.

But if they only had a 10% deposit, the mortgage payments would balloon out to $850 a week, eating up almost half (47%) of their take home pay, which is squarely in unaffordable territory.

That's likely putting first home buyers on average wages between a rock and a hard place, where they are unlikely to be able to save enough for a 20% deposit (without help from parents or other sources), and are also unlikely to be able to afford the mortgage payments if they only have a 10% deposit.

The figures suggest a sobering trend, with people on average wages in Auckland being increasingly squeezed out of the market and home ownership in the region increasingly becoming the preserve of those with higher than average incomes or access to funds from other sources.

The Bay of Plenty and Wellington regions are following a similar path.

In the Bay of Plenty you would need $133,000 for a 20% deposit on a lower quartile-priced home, and if buyers only had a 10% deposit, the mortgage payments would eat up 39.2% of typical first home buyers' take home pay, which is perilously close to the 40% threshold above which mortgage payments are considered unaffordable.

In the Wellington Region you would need $142,000 for a 20% deposit on a lower quartile-priced home, and if you only had a 10% deposit the mortgage payments would eat up 38.2% of typical first home buyers' take home pay, which is also only just inside the affordability threshold.

The tables below give the main mortgage affordability measures for first home buyers in all main urban districts throughout New Zealand.

The comment stream on this story is now closed.

Home Loan Affordability for Typical First Home Buyers with a 10% Deposit
For Homes Purchased at the Lower Quartile Selling Price
July 2021
    Amount required for a 10% deposit  Years required to save a 10% deposit Size of mortgage required with a 10% deposit  Weekly mortgage payments  Median after- tax pay for typical first home buying couple  Affordability: Mortgage payments as % of after-tax pay
  Region            
  Northland $50,500 2.9 $454,500 $499 $1,677 29.8%
  Auckland $86,000 4.6 $774,000 $850 $1,800 47.2%
  Waikato $60,700 3.4 $546,300 $600 $1,742 34.4%
  Bay of Plenty $66,500 3.9 $598,500 $657 $1,677 39.2%
  Hawke's Bay $58,750 3.4 $528,750 $581 $1,677 34.6%
  Taranaki $42,500 2.4 $382,500 $420 $1,704 24.6%
  Manawatu/Whanganui $46,900 2.7 $422,100 $464 $1,704 27.2%
  Wellington $71,000 3.8 $639,000 $702 $1,839 38.2%
  Nelson/Marlborough $59,500 3.4 $535,500 $588 $1,715 34.3%
  Canterbury/Westland $47,400 2.6 $426,600 $468 $1,766 26.5%
  Otago $50,000 2.9 $450,000 $494 $1,683 29.4%
  Southland $33,250 1.9 $299,250 $329 $1,756 18.7%
  New Zealand $60,000 3.3 $540,000 $593 $1,767 33.6%
               
  City/District            
  Whangarei $54,500 3.0 $490,500 $539 $1,785 30.2%
  Rodney $99,600 5.4 $896,400 $984 $1,800 54.7%
  Auckland North Shore $108,000 5.8 $972,000 $1,067 $1,800 59.3%
  Auckland West $86,800 4.7 $781,199 $858 $1,800 47.7%
  Auckland Central $80,000 4.3 $720,000 $791 $1,800 43.9%
  Auckland South $85,000 4.6 $765,000 $840 $1,800 46.7%
  Papakura $75,000 4.0 $675,000 $741 $1,800 41.2%
  Franklin $71,000 3.8 $639,000 $702 $1,800 39.0%
  Hamilton $65,500 3.7 $589,500 $647 $1,736 37.3%
  Tauranga $77,500 4.5 $697,500 $766 $1,687 45.4%
  Rotorua $52,500 3.0 $472,500 $519 $1,730 30.0%
  Gisborne $52,500 3.4 $472,500 $519 $1,519 34.2%
  Napier $61,500 3.6 $553,500 $608 $1,683 36.1%
  Hastings $60,500 3.5 $544,500 $598 $1,677 35.7%
  Wairarapa $52,950 3.6 $476,550 $523 $1,440 36.4%
  New Plymouth $51,900 3.0 $467,100 $513 $1,679 30.5%
  Whanganui $43,500 2.7 $391,500 $430 $1,579 27.2%
  Palmerston North $58,000 3.1 $522,000 $573 $1,804 31.8%
  Kapiti Coast $71,000 4.2 $639,000 $702 $1,643 42.7%
  Porirua $82,650 4.6 $743,850 $817 $1,744 46.8%
  Wellington Hutt $76,000 4.1 $684,000 $751 $1,789 42.0%
  Wellington City $76,800 3.6 $691,200 $759 $2,091 36.3%
  Nelson $59,500 3.4 $535,500 $588 $1,715 34.3%
  Christchurch $49,650 2.7 $446,850 $491 $1,760 27.9%
  Timaru $40,000 2.4 $360,000 $395 $1,618 24.4%
  Queenstown $77,500 4.5 $697,500 $766 $1,683 45.5%
  Dunedin $53,000 3.3 $477,000 $524 $1,577 33.2%
  Invercargill $35,000 2.0 $315,000 $346 $1,678 20.6%
  Notes: Calculations based on buying a home at the REINZ's lower quartile selling price in each region/district. Mortgage interest rate used is the average of the two year fixed rates offered by the major banks, with a loading for a low equity loan over a 30 year term. Weekly income is the combined after-tax pay for couples aged 25-29 with both working full time. Years to save is based on saving 20% of after-tax pay each week.
 
 
 

 

Home Loan Affordability for Typical First Home Buyers with a 20% Deposit
For Homes Purchased at the Lower Quartile Selling Price
July 2021
    Amount required for a 20% deposit Time needed to save a 20% deposit Size of mortgage required with a 20% deposit Weekly mortgage payments with a 20% deposit Median weekly after-tax pay for typical first home buying couple Affordability: Mortgage payments as % of after-tax pay
  Region            
  Northland $101,000 5.84 $404,000 $382 $1,677 22.8%
  Auckland $172,000 9.23 $688,000 $650 $1,800 36.1%
  Waikato $121,400 6.75 $485,600 $459 $1,742 26.3%
  Bay of Plenty $133,000 7.72 $532,000 $503 $1,677 30.0%
  Hawke's Bay $117,500 6.83 $470,000 $444 $1,677 26.5%
  Taranaki $85,000 4.85 $340,000 $321 $1,704 18.9%
  Manawatu/Whanganui $93,800 5.35 $375,200 $355 $1,704 20.8%
  Wellington $142,000 7.47 $568,000 $537 $1,839 29.2%
  Nelson/Marlborough $119,000 6.75 $476,000 $450 $1,715 26.2%
  Canterbury/Westland $94,800 5.16 $379,200 $358 $1,766 20.3%
  Otago $100,000 5.75 $400,000 $378 $1,683 22.5%
  Southland $66,500 3.68 $266,000 $251 $1,756 14.3%
  New Zealand $120,000 6.56 $480,000 $454 $1,767 25.7%
               
  City/District            
  Whangarei $109,000 5.91 $436,000 $412 $1,785 23.1%
  Rodney $199,200 10.68 $796,800 $753 $1,800 41.8%
  Auckland North Shore $216,000 11.59 $864,000 $817 $1,800 45.4%
  Auckland West $173,600 9.31 $694,399 $656 $1,800 36.5%
  Auckland Central $160,000 8.58 $640,000 $605 $1,800 33.6%
  Auckland South $170,000 9.12 $680,000 $643 $1,800 35.7%
  Papakura $150,000 8.05 $600,000 $567 $1,800 31.5%
  Franklin $142,000 7.62 $568,000 $537 $1,800 29.8%
  Hamilton $131,000 7.31 $524,000 $495 $1,736 28.5%
  Tauranga $155,000 8.91 $620,000 $586 $1,687 34.7%
  Rotorua $105,000 5.88 $420,000 $397 $1,730 22.9%
  Gisborne $105,000 6.72 $420,000 $397 $1,519 26.1%
  Napier $123,000 7.12 $492,000 $465 $1,683 27.6%
  Hastings $121,000 7.04 $484,000 $457 $1,677 27.3%
  Wairarapa $105,900 7.12 $423,600 $400 $1,440 27.8%
  New Plymouth $103,800 6.01 $415,200 $392 $1,679 23.4%
  Whanganui $87,000 5.37 $348,000 $329 $1,579 20.8%
  Palmerston North $116,000 6.24 $464,000 $439 $1,804 24.3%
  Kapiti Coast $142,000 8.38 $568,000 $537 $1,643 32.7%
  Porirua $165,300 9.17 $661,200 $625 $1,744 35.8%
  Wellington Hutt $152,000 8.22 $608,000 $575 $1,789 32.1%
  Wellington City $153,600 7.12 $614,400 $581 $2,091 27.8%
  Nelson $119,000 6.75 $476,000 $450 $1,715 26.2%
  Christchurch $99,300 5.42 $397,200 $375 $1,760 21.3%
  Timaru $80,000 4.77 $320,000 $302 $1,618 18.7%
  Queenstown $155,000 8.91 $620,000 $586 $1,683 34.8%
  Dunedin $106,000 6.51 $424,000 $401 $1,577 25.4%
  Invercargill $70,000 4.07 $280,000 $265 $1,678 15.8%
  Notes: Calculations based on buying a home at the REINZ's lower quartile selling price in each region/district. Mortgage interest rate used is the average of the two year fixed rates offered by the major banks. Weekly income is the combined median after-tax pay for couples aged 25-29 with both working full time. Years to save is based on saving 20% of after-tax pay each week.
 
 
 

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86 Comments

Supply and demand. The government supplied a lot of people for many years. You get what you get.

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What's Bank created currency and Leverage got to do with supply and demand?

VANCOUVER has had oversupply for 20 years, yet it's like Auckland and led the way for a couple of decades in house price inflation.

This is not as simple as supplying tonnes of apples in April to half prices. Can't leverage an apple.. Don't borrow from banks to buy apples..

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Correct. The clown narrative is supply and demand.

The real story is criminal central bankers playing god.

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"Even a relatively mild inflation distorts the structure of production. It leads to the overexpansion of some industries at the expense of others. This involves a misapplication and waste of capital. When the inflation collapses, or is brought to a halt, the misdirected capital investment – whether in the form of machines, factories or office buildings – cannot yield an adequate return and loses the greater part of its value.”
— Henry Hazlitt

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At least you can go and plant more apple trees. In our deeply corrupt housing market the only houses that you can buy new are through developers at heavily jacked up prices that have been raised to match the sale prices of existing houses. they are also built on land that the house construction companies have captured. I know that in Tauranga there is little land available and what is, is just ridiculously priced. In other words in a normal healthy market when the prices of used houses rise too much, there would naturally be a flood of new houses built to balance out the demand and prices. Our country, councils and governments are deeply corrupt.

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My understand of the Chinese government action to combat exactly the same problems in the tier one cities (Beijing Shang Hai, Guang Zhou and Shen Zhen) is to

Build More House with the Right Size to rent to Qualified people at Below market rents!

That sounds like a sensible solution for this government.

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Unfortunately for NZ the Chinese government is far more capable of building... well anything. The NZ government is basically hopeless at being able to build almost anything, except for roads.

Actually, it wouldn't surprise me if the NZ government response to a housing shortage will be "build more roads" and not worry about water/sewage/energy/housing, because that is in the too hard basket.

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The Waikato expressway took 25 years almost….and it is still going.

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No it will be done by 2020, no I mean 2021, no no I mean 2022....

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I was on that beautiful highway yesterday and not a cop or roadblock either direction..... before you ask, yes it was essential travel

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It's quite easy when you have zero regard for anything else around, like the environment or say, the baiji, that was swept to extinction during the building of the Yangzte River dam

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Lol. There are plenty of videos online showing the quality of these Chinese apartments.

It makes our leaky buildings crisis look like nothing.

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Having lived in a couple and visited dozens, the grand majority are decent enough quality. Sure 10% of them might be crap, which means you probably have 100k crap ones built over the last decade or so. But if 90% are fine, I don't think people will complain too loudly.

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Just up the OCR, problem solved.
Cheap credit creates bubbles.
Bubbles need popping.

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Rates at 5 percent could still mean big asset bubble.. If the banks allow mass leverage and debt combined with open borders next year to control inflation...remember 2002 to 2007.

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Knowing how to plan ahead and there'll be less FHB whinning.

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to be fair, one cannot plan when the person gets born.

income to house price ratio is now 10 while it was 2 about 40 years and 7 around 5 years ago.

the culprit is who prints the $ and steal it from whoever do not own any capital against the $ dilution.

the winners are the ones who own capitals and use capitals to own more capitals, and any earnings are exempt from tax!?

the useless is the government while the losers are obvious.

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I wouldn't compare it vs. 40 years ago. Interest rates were around 20% back in those days.

Also the time value of money changes as well, so although I agree income to house ratio is getting tougher, it is not at the extreme comparisons as you have mentioned.

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put it this way:

the value of an average person has gone down.

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In 1981, 4.5 Billion people in the world.
In 2021, 7.6 Billion people in the world.

1 life 40 years ago is definitely worth more than it is today, based on the views of our politicians at least. Survival of the fittest as they would not dare say.

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..can't fault your logic today Xing

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Do you reckon the value of the average person is now worth less than in the time of the Tiananmen Square massacre?

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Well in that regard, the value of an average Maori person is definitely worth more than the time before NZ was robbed from them, and many were killed by Pakeha folks.

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Many were killed by other Maori folks too (and somtimes eaten).

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The fate of the Moriori is a good example of that but it is apparently racist to mention it.

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You mean Taranaki Maori crossing the country, hiring a whaling ship with a European crew to take them to the Chathams and commiting genocide? Namely, killing, enslaving, raping and cannibalizing the Moriori? Nope, I reference it all the time alongside the British Government borrowing from Rothschilds to recompense slave owners when slavery made illegal (prior to the above genocide).

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Not this falsehood again. This was a common troupe trotted out by the government 100 years ago to excuse colonialism, for which there is no comparison. Hongi Hika and Nga Puhi also decimated iwi around the North Island when they got muskets first, but neither of these are the same as the dispossession of colonialism.

Go and read a history book.

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I would argue that you've been captured by clever words of those trying to re write history. If one were able, and asked a member of any one of the Maori iwi who were decimated by another as it was described here, then do you think they would feel better or worse than Maori claim they do today over being colonised?

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Happily, given that my iwi were decimated by the northern tribes. My point is that Moriori, similar to other New Zealand tribes, were not the only ones to be subject to inter tribal warfare and enslavement. I'm sure we can agree on that, I'm not sure any NZ history books suggest that this didn't take place, and I don't disagree. Moriori were deliberately portrayed as a separate people by the early NZ government, as a way of easing the public perception of the ongoing injustices against Māori. Namely, that European settlers replacing Māori in NZ was the latest in a series of migrants to NZ replacing the previous inhabitants. It's well established now that this approach took place. It's no different to the idea that pre-Māori Celtic people were in NZ first.

And yes, I'm well aware of Michael King, who also agreed that Moriori weren't a pre-Māori people. I've read dozens of NZ history books thanks, and studied it at university level.

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Ah right. So its ok massacring, cannibalising and enslaving multiple groups for their land or whatever else because in your absurd view it isn’t the same as being dispossessed by colonialism.

Astounding logic.

Pitty any youngsters that ever have any of this sanctimonious bile forced upon them from this charlatan.

Go and read a history book indeed.

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Moriori is a falsehood but the musket wars are not.

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Cobolt
Totally incorrect and misinformation regarding the Moriori as described by Cheetalegs.
You need to educate yourself a little by reading Michael King’s “Moriori” . . . one of our most highly regarded and respected academic historian whose works - including this book - are not disputed.

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Wanderer
Cheetalegs is correct regarding the demise of the Moriori on the Chathams.
It is you that need to read the history books . . . especially that by Michal King “Moriori” . . . and don’t try saying that he was racist, had a bias or was wrong.

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DP

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Many a culture has indulged in some form of cannibalism, including European ones

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This has been done to death, wage inflation was also running at 15%. Believe me, I bought a house in '94 for 123k. Household income was 60k. This is in Onehunga Auckland. Had kids, wife stopped working.
Saying it was just as hard then is total bullshit.

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Correct, this weird 'BUT INTEREST RATES HIGH' argument ignores the basics that a high percentage of a tiny number is less than a small percentage of an absolutely massive number, before you even take wage inflation into account.

That's to say people had it easy then, but it was easier.

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Also saving for a deposit on a smaller purchase price, while simultaneously having higher term deposit rates.

Before anyone chimes in "But what about Kiwisaver employer contributions?", that scheme existed in the 70s through Labour's superannuation scheme but the generation of the day voted Muldoon in a landslide victory to abolish the scheme.

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Yep and note that as wage and inflation rates were high, your amount of debt dwindled in comparison (because your principal debt doesn't increase).

A conveniently overlooked fact ignored by the idiots repeating this line.

Don't worry though, those same people who say this now have to exclude themselves from the society they have created: https://www.stuff.co.nz/business/property/126163052/elitist-gatedcommun…

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Agree this obsession with the price to income ratio is very antiquated when rates are what they are now.

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In jurisdictions with affordable housing policies, the interest rates make no difference to the price of housing.

The median income ratio is a great immediate measure to indicate whether there is an underlying 'other cause' of unaffordability.

Variables like interest rates are accelerants, which have no effect if the fire (restrictive housing policies) is not lit in the first place.

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A life of work, just to pay for the roof over your head. Sounds very attractive.... in the words of Borat - not

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Glad we got in when we did.

Also, I didn't realise people still saved cash deposits for house purchases. I thought deposits were leveraged these days?

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I can't imagine waiting so many years saving so hard, they would turn up at the bank in Monk gear, full Zen mode. It relies on nothing changing in these peoples personal circumstances over these years. It's a hell of an ask.

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NZ future home owners are being held hostage in the interests of debt based speculation. Once were vaccinated enough, and reopen with Aussie the youth drain will pick up again.

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Once Australia is vaccinated to 70-80%

It only needs to be a one-way flight.

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Apparently we don't need youth. We just need old rich Caucasian folks who have a lot of capital or able to take a lot of debt to buy more houses.

That's how the NZ economy has worked for many years, no?

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Can we have the counter statement: "We dont need young, poor, brown people." One is not considered politically correct. Waiting for the editor.....

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Mate, that's a racist statement.

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I guess comments are closed on the latest covid update article?

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Yup, clearly too much "misinformation". Shame I though there was good reasoned debate going on.

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Closed, just like our Parliament and freedom.

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Did i hear rising interest rate where, are we talking about NZ.
We are at .25 far beyond normal which is 2%.
We can say rising/increasing if it is above 2% below it, it's dirt cheap.
Lose policy is here to stay if we target Covid elimination strategy undoubtedly & expect property prices to rocket.

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Curious to know why you think 2% is normal?

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I'm no spring chicken in my 50s and I don't think 2% has been "normal" for much of my life.

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You may be not but world is changed my friend..

https://www.youtube.com/watch?v=GIDyqwu-k0Y

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I’ve owned a house for over 50 years and I’ve never seen interest rates close to 2%. In the70’s and 80’s in the UK I don’t recall in going under 7%.

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I can't wait to have the conversation with my kids about how if they study hard at school and work hard to get a high paying career and have luck on their side and make no mistakes then one day they might attain the impossible dream of a 30 year mortgage on a run-down 1970s 3-bed fibro crap-box in the back of Ranui by the time they are 40.

What a time to be alive.

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I have already had the conversion with mine to study hard and study Chinese hard so that they can have their tertiary education and first job some where in China.

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Good call but be sure to get connected properly before going otherwise your just changing location, not circumstance. I will be keen for mine to study Chinese as well given this will be an almost essential skill in the next decade.

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I have also had the conversation with mine to study hard and study Chinese hard, and I'm not even Chinese. Whatever way the political future goes, I want my children to be able to survive in it.

FWIW they're also learning Maori, and saving for their first house deposit despite neither of them being even close to buying age.

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You will be fine Xing. The asian work ethic is unsurpassed in NZ and as a result they succeed disproportionately in fields of academia and music (however, not contact sports). Biggest threat to Caucasians is being outworked and outsmarted by Asians.

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Who on earth are you?

You seem to have blown in here with a racially driven agenda.

Never heard of you before.

“Caucasians is being outworked and outsmarted by Asians.” What a preposterous comment.

What of all the other races we have in this country then?

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Wake up my Lord the Asian kids are smashing the locals at collage level and beyond. We were lucky in the 80's I don't remember a single Asian kid in a college with the highest number of students in New Zealand that we had to compete with. Its hard to say if they are "Smarter" but there work ethic and drive to succeed is simply next level and they simply dominate at university, seen it first hand in electrical engineering. The fact its getting racist to state facts is starting to piss me off in this country.

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The race IQ rabbit hole is a very deep one.

Uncomfortable truths get some people very agitated.

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Great time to be alive, 50 years ago when we got our first house things were very different.
Sure houses were cheaper then but usually only the man worked. I think house prices can be linked to this. Like anything to do with housing, if we now have two income households they will be paying twice what a one income family was paying 50 years ago. As for life itself there are so many things available now that make life easier and safer. We would only see these things in science fiction movies.

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Brock, I think that is a telling statement that rather nicely encapsulates the realities of the world, and the failures of Government.

Yes they can study hard, do well at school, be well presented and that still is no guarantee of a good, high paying job. The problem is the majority of kids in schools are just average, deserving, but average. So what are the opportunities for them? Why should average Kiwi kids be confined to some socio-economic scrap heap because they haven't got the mentorship, lack good parenting, live in some comparatively remote town with limited opportunities, or are just plain average? Most people who are well grounded would realise that 'luck' is not distributed fairly across society. There is a saying; "the harder I work the luckier I get" but I know plenty who have worked very hard, but 'luck' keeps trying to flatten them.

And finally the really marker of Government failure, what housing policy means to ordinary Kiwis....

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They shouldn't. There should be opportunity for everybody.

My comment was pointing out that even being the best doesn't matter anymore. Not in this country.

Thank god my kids have multiple citizenships.

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Greg, nothing new. Why the surprise and why this is a news.

Is it not obvious. Even now when everyone knows, what MEANINGFUL action is being taken by Orr or Robertson.

If serious Orr should have adopted the least regret policy overnight instead of still pursuing with policy of wait and watch. Ever week prices are stabilizing and touching new height.....stil...........

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It's alright, I'm here..

The reality is, NZ can either have a functioning society; health-care, education, transport, water-systems, whatever OR ever increasing house prices.

We ALL know what has been chosen. Paltry rate increases that won't even come close to covering the decades of under-investment in infrastructure are met with extreme ire from the landed gentry.

As infrastructure brakes down and social issues worsen, it's clear NZ Crumble won't taste anything like Apple Crumble.

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Mmmm Apple Crumble....

What to do about the old infrastructure issues though, we don't seem to be able to do much of the buildy stuff. Perhaps we can import the skills required? ;).

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Nothing wrong with asking for help, IF it's required.

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Be quick(er), the time i̶s̶ ̶n̶o̶w̶! was back there......

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The people will wake up if the government has to raise rate because of inflation or usd crash and only way us government can stop usd going into oblivion is to raise rates at what point would the whole housing crash. A lot of this is on the cards at some point and anyone with say 600000 loan who is already finding it hard will go under . The trouble is when people are working at full capacity and just getting through each week it will not take much to push the housing market into a spiral

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Well, thank goodness the hysterical cries of Simon Bridges as Nat leader and his colleagues, prior to the last election, saved us from a Capital Gains Tax. At least New Zealand as we know it didn't come to an end! It's getting on for 4pm, it must be nearly time to open the Bollinger.
Seriously and sincerely, why do we need investors buying 'new builds' when we have a housing crisis? Why not: provide a Govt guarantee of purchase; and prohibit investors, together with 'associated persons', as defined in the Income Tax Act and Tax Administration Act, from purchasing housing - with forfeiture and penalties for breaches?
It's a crisis. Let's get serious. Not much good building for houses (at least for a while) if investors are going to buy them.

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I used to say that because ALL of NZ has that same basic housing policy, that every town in NZ was just an Auckland Cluster&^#$ awaiting to happen.

I can now update that to 'has happened.'

Think of these policies as the Delta housing virus, which starts in Auckland and spreads around the country.

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An effort MUST be made to reverse this. To think that ordinary people should end up just being livestock for people farmers is too awful to contemplate.
It needs massive government interference and I will support any government that takes it on.

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The government just has to push all companies to pay us all more in wages, and not up their prices for their product.

Companies should front the bill here.

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Wow. Company ups all of its wage bill (and thus tax collection) but charges the same price for its goods or services. #bankruptcyformula

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Why should the poor get houses? Houses should be for only the wealthiest. Nurses and firemen can live under bridges.

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Opportunity Cost? Or Stupidity?

During an affordable housing shortage, if a government chooses to direct the VAST MAJORITY of it's 'housing resources' to the irresponsible, socially-corrosive and destructive members of society - responsible citizens, those literally keeping NZ running become oppressed.

This seems like a stupid way to approach a housing crisis - isn't it just leading to the most unproductive people living in brand-new-houses while driving productive citizens into homelessness and out of the workforce - causing all sorts of employment issues. Ultimately it increases poverty?

Home-ownership [FHB] makes for good citizens and families. Such Kiwis would be better equipped to [often more likely to encounter] help/deal-with socially destructive people. Surely that's better than concentrating the socially aberrant in city centers?

MANY homeless people DO NOT want social housing. Many prefer living outdoors, to think otherwise is ignorant [no offense, just a fact people are often ignorant of]. Ask yourselves; would the NZ government, Housing NZ [whatever they are called, anybody know?].. do you think they would make good landlords? Really think about the implications of your answer.

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Be quick?

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'Being' squeezed, as if it's only happening now?
Come on Greg!

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Finally a solution. The New Zealand government announced new property sale legislation beginning midnight Friday 27th August 2021.The said they know there will be some short term difficulty and pain for some but the long term health and prosperity of New Zealanders was of utmost importance. Therefore from Friday the maximum sale price of all properties will be 60% of the RV. This will be in place for 10 years.
By the way I sold all my properties last week and if anybody is looking to sell next week please PM me.

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I always enjoy these articles as the maths are accurate but meaningless! For a start it is essential to include rates and property insurance into the equation as these costs are unavoidable and for first time buyers substantial. HOWEVER your sums are based on a couple in their late 20's. Inevitably they still have student loans to pay off, and their take home pay impacted if subscribers to KiwiSaver. But just about every "couple in their late 20's" will suffer from a considerable loss of income during the 30 years that they cherish their mortgage. Couples are still having babies that result in a reduction of income plus increasing costs, and over a few years it is likely that many workers will be "between jobs". One of my sons sadly relocated his family to live in the UK where property prices in the provinces are under half of what was needed in Auckland. I invite you to add a degree of reality to articles such as this one.

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