Home Loan Affordability Report: House prices increasing so much in Auckland they risk creating an economic underclass that doesn't exist in other parts of the country

Home Loan Affordability Report: House prices increasing so much in Auckland they risk creating an economic underclass that doesn't exist in other parts of the country

By Greg Ninness

There was a big jump in the lower quartile house price in Auckland last month, putting the dream of home ownership further out of reach for first home buyers, according to interest.co.nz's Home Loan Affordability Report.

The report shows the lower quartile selling price in Auckland was $629,500 in February, up $33,800 or 6% from $595,700 in January. That means Auckland prices have now recovered virtually all of the ground they lost over the Christmas/New Year period and are within $1000 of their all time high. 

Auckland's lower quartile house price peaked at $630,500 in September last year and then declined to $595,700 in January.

The lower quartile selling price is already sitting at all time highs in five other regions: Waikato/Bay of Plenty, Wellington, Nelson/Marlborough, Central Otago Lakes and Southland.

Although lower quartile prices declined in three regions last month - Northland, Taranaki and Otago - the general trend has been for them to be sitting at or near their all time highs throughout the country.

Nationally the lower quartile price (the price point at which 25% of sales in that month were below that figure and 75% were above it) was $300,000 in February compared to the record high of $310,000 in December last year.

Auckland the only region where housing is seriously unaffordable for first home buyers

However in spite of rising prices around the country, Auckland remains the only region where housing is seriously unaffordable for first home buyers.

The Home Loan Affordability Report calculates how much a typical first home buying couple (a couple where both are aged 25-29 years and working full time) would have to set aside each week to make the mortgage payments on a lower quartile priced house, and compares that to their median take home pay based on the pay rates in Statistics NZ's Linked Employer-Employee Data Survey.

This shows that the median take home pay for typical first home buying couples in Auckland was $1579.50 a week in  February, from which they would need to set aside $756.07 a week to meet the mortgage payments on a lower quartile-priced home ($629,500), which would be 47.9% of their take home pay.

The report considers housing to be affordable when mortgage payments total no more than 40% of take home pay, but it does not take in account other property-related expenses such as rates, insurance and maintenance which would be likely to be significant.

Benefits of falling interest rates more than negated by rising house prices

The report also shows that in Auckland, the benefits of falling interest rates have been more than negated by rising house prices and low income growth over the last two years.

In February 2014 the average of the two year fixed mortgage rates offered by the major banks (which is the figure used for the report's mortgage payment calculations) was 5.96% and by February this year that had dropped to 4.54%.

But over the same period the lower quartile selling price of Auckland homes rose from $478,800 to $629,500.

That meant that even when the lower interest rates were allowed for, the mortgage payments on a lower quartile-priced house in Auckland increased form $646.30 a week to $756.07 a week over the same period.

So even with lower interest rates, the mortgage payments on a lower quartile-priced home were $109.77 a week higher in February 2016 than they would have been in February 2014.

 Low income growth also an issue

However relatively low income growth is also an issue.

Over the same two year period, the median take home pay for typical first home buyers increased from $1501.44 a week to 1579.50, providing them with an extra $78.06 a week.

That means that Auckland's house prices have risen so much over the last two years that they would have more than wiped out the effects of falling mortgage interest rates and rising incomes, steadily pushing home ownership further out of reach for typical first home buyers.

The report also highlights how much worse off first home buyers are in Auckland compared to those in other parts of the country.

In Wellington the lower quartile house price was $360,200 in February and the mortgage payments on that would have been a much more affordable $409.44 a week, taking up just 25.4% of typical first home buying couple's take home pay.

In Canterbury the mortgage payments on a lower quartile-priced home would take up just 25.8% of typical first home buying couple's take home pay and in Waikato/Bay of Plenty it would be 23.2%.

So in Auckland, mortgage payments are likely to be eating up almost half of a typical first home buying couple's income, while in other main centres mortgage payments are are likely to chew up around a quarter of first home buyers' incomes.

That has enormous long term economic implications for young people living in Auckland

With so much money tied up in mortgage payments they will have less to spend on other things, reducing the money flowing into the rest of the Auckland economy and it will also substantially reduce their ability to save for retirement.

The size the mortgages young people will need to take out to purchase a home in Auckland is becoming so great that it will create a millstone of debt that will hang around their necks for most of their working lives. 

That risks creating an economic underclass of people in Auckland that will not exist to the same extent in other parts of New Zealand.

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Bah, thats easily affordable, if you are in the tiny subset of the population 25-30 with two incomes and no kids. Don't worry about having kids, thats what immigration is for.

What are you talking about? I happen to know that at least 2 of our big 4 banks happily lend more than $629,000 to single income individuals their early to mid twenties.

How much are they earning though?

one guy is on just shy of $100k excluding some investment income. I plugged in $100k into kiwibank's mortgage calculator and it says they would be happy to lend $640k. ( Kiwibank caps you at 4x your deposit regardless of income, so use a few hundred k as the deposit to get the income cap instead of the deposit cap) https://www.kiwibank.co.nz/personal-banking/home-loans/mortgage-calculat...

That form claims they would happily lend us 7x our gross household income. Idiots.

Smells more like a credit fuelled debt orgy than a supply shortage.

UK style macro-prudential with borrowing limits capped at 4.5x income would cool things down. The banks should be put on a leash.

And they get the names right

Buy-to-let landlords have displayed willingness to sell in the event of market changes, sparking concern in the Bank that interest rate rises would lead to a housing slump similar to that of 1988.



Kiwibank offered $800k with a $200k deposit on $165k income some time ago to us. Wildly irresponsible lending. A lot of first time buyers will have their lives destroyed when this all collapses.

We went to another bank and borrowed half that amount with a much improved income a year later.

Still $1,000 off from the all time high? This must be the beginning of the end! Surely we'll have houses selling for 50% less soon?

You're obviously a real estate agent sadr001 so go peddle some houses.

I work in software, dabbling in the housing market is a hobby. Am actually looking to expand my portfolio as opposed to peddling anything i own at the minute.

So the article is about how screwed young people are and you come on telling everyone how well you are doing and that you are expanding your portfolio? Can you explain your need to do that? To me it is just very strange.

The point was to indicate that I am not a real estate agent with vested interests. As someone born in the 90s most of whose mates were born in the 90s I tend to find it odd when older people complain that young people are screwed when most of us really aren't. We live in the golden age of opportunity when anyone with a laptop can become a millionaire in a month just by having an idea and writing a few lines of code. I doubt any generation prior has had it as easy as we do now!

You are lucky as you have ability. Not everyone is born with enough grey matter to do what you have done. I was born in 1955 and became a professional and retired at 58. Live off dividends and interest. I am lucky in that I had sensible parents, sufficient grey matter to get my university qualifications, a sensible wife and good health . Not everyone I went to school with was as lucky as me.

I also work in software. You are deluded. Opportunity has always been there but there is a reason that all of the big start-ups explode in the US. The capital is available. Software pays well in NZ and you've managed to build a portfolio on 100-220k income, bravo, depriving some of your generation of owning a home.
Most young people really are screwed. Check the average income in Auckland and compare that to the average house price. You've massaged your ego a bit but clearly you have no understanding of the damage high house prices do to society.

Most young people really are screwed.

What do you suggest we do about it? Should everyone voluntarily pledge to only one home? What if people want to rent a house?
I get the impression that these sorts of comments are hinting that there should be some sort of system where it is "from each according to his ability, to each according to his needs."

Your response smacks of extremism. What he is suggesting is that with significantly lower, more affordable house prices, the younger set would at least have choices. What choice do they have today? I have said this before - the Govt, should cap rents for a house at a max of $200 per week. The majority of benefits would be positive, investors like SADR001 will have to wait a little longer than a month to become a millionaire, and banks would hurt a little, but the average Joe on the street would be significantly better off!

For that to work you would have to build big housing estates but then they would probably fill up with migrant families where turf wars would rage out of control and eventually it would need to be spectacularly demolished.
What you suggest is not necessary. There have never been more opportunities for young folk to pursue than ever before. Put out that joint, pull out the piercing, turn off social media, cover the tramp stamps and get out there and take your place in the world.
Yes I am an extremist.

disagree - rents at that level are in existence in other regions of the country without the need for housing estates. Besides I'd suggest that the housing estate idea is a band aid fix when Governments don't or won't put the brakes on greed.

I would also suggest that the current house issue, and it has occured elsewhere in the world, is a symptom of the right wing, free market economics that most have bought into. Balanced regulated central policies are what is needed, and regulating a cap on rents are exactly that. They allow investors to continue in the market, providing rentals for those who choose that option, while limiting the rate that rampant greed can distort and manipulate a market.

How would capping rent work with different houses? A house in Epsom renting for $1200 a week compared to one in Manurewa for $400 offer wildly different quality and convenience.
Your suggestion is like how it was in East Germany where everyone drove around in Trabants.
I firmly believe socialist policies would only work if combined with some "blood and soil" philosophy which has been universally rejected. Open immigration has mean't that such good offers as yours would be ruthlessly taken advantage of by new arrivals and we would see unfair competition in another sector like wages.
I recall a conversation I had with a Chinese immigrant who said, "New Zealanders have built a great socialist system but it cannot last because too many people are coming in".

Likening my suggestion to East German cars is blatant obfuscation, and rubbish. It is just more extremism, all or nothing. The problem is, all or nothing doesn't work, but somewhere in the middle will. How is $1200 a week rent reasonable? Who gets paid that much to be able to afford such a rent anyway? If the rent is at what I consider to be a reasonable portion of take home pay of 30%, it means you'd have to be earning close to $300k. It proves my point that this is a ridiculous situation that must be curtailed. Market forces clearly are not constraining the system, so regulation has to occur, and this must be geared to protect the average to low end earners, not the wealthy investors.

I do agree about immigration. A report in the UK identified that immigration does not contribute to the economic growth of the nation, and I suggest that it is fairly obvious that is true here too. So I suggest that it should be severly cut back, if not stopped altogether.

It sounds like we are not so far away from each other going by your last paragraph. Currently it appears that some people can pay $1200 a week as I have seen it in my own street. Very nice, new house with four bedrooms and three bathrooms behind steel gates.
Quick search of TradeMe reveals 22 properties for $1200 or more a week in Epsom/Greenlane/Remuera.

The truth is we do provide houses for $200 a week when you take into account benefits, no tax for low incomes with families, state houses and so on.

You might just be surprised how many houses in Auckland are not selling at auction. Sometimes the auction is being cancelled because they know there is no interest. I would be the first to say it is the more expensive homes, those probably in excess of $1 to $1.5 million or so that are being affected by this change of sentiment. You will always have a market for the cheaper houses as the majority of buyers are in this bracket and investors of course. Those who bought houses at the top end last year before the change in mood will certainly not be feeling great as they bought at the high. It is all about timing when markets are involved.

Yes I agree with you ex agent, I'm seeing the same thing even in the more affordable affluent areas. There's certainly a lot more properties listed as 'Auction' that then seem to accept offers as quick as they can, rather than risk going to auction and potentially lose the buyers else where. Or are just being passing in. Certainly the auction figures that are being reported each month do seem light in there listings.

Plus we need to also consider that rents seemed to have it their saturation point especially in Auckland, since people simply can't or won't pay exorbitant rents.

I assume by "action" you mean auction? You can edit a comment you know. I'm trying to decipher your comment and what I am getting is that people are taking their properties to auction and they are getting great pre-auction offers so they are calling them early. This is usually a sign of a hot market. Auctioned properties still go to auction in these scenarios just a bit earlier and with a guaranteed high reserve price.

No Zachary, you completely missed my point! What I'm saying is that pushy Estate Agents are pressuring people to accept a more realistic (Not so good) offer prices.

ALDI...Wakey Wakey. Read my lips...and my tips. NZ next.

We also need a little competition in our other Markets...Would work wonders for the poor and add a small fillip to their budgeting needs. Much easier to stretch your dollar further, when the local Markets are in your favour.

Please, please come to NZ..Aldi, after all, we are only a small market, but need your enterprise as routinely overcharged. Our budgets are not what they were.

I will show Aldi how to make a killing...in our markets...a no-brainer...at a sensible mark-up and giving people a sensible choice.


PS....if Aldi do not come..Pray...Lidls does....whoever gets in first, cannot lose.

Free plug, with every New Zealand Customer.

Only 3 towns have a growth rate less than the NZ average, Dunners, Gisborne, and Kapiti.

Something appears to not add up with the figures. Supposedly the NZ average only went up 2.7%. The only places on the table with lower growth than that were Gisborne, Kapiti and Dunedin. They have a population between them of about 220,000 so they in no way balance the rises on the other side of the average.
Considering the effect of Auckland alone. Auckland with about a third of the population rose 13.5%? Theoretically that would mean that if all houses across the country houses started with the same value and the houses in the rest of NZ had a 0% rise, then the average for the whole country would rise approximately 13.5%/3=4.5%. In reality the fact that Auckland houses are about twice the price means that their influence on the NZ average carries twice the weight. Sadly this casts suspicion over the credibility of the whole article. Despite that, it is clear that the Auckland housing situation is a disaster that will have far reaching consequences.

I have just noticed something else. The average NZ price in the table seems too low. If we accept that the average Auckland price is $629,000 and there are 1/3rd of the houses there. Then the average price for the rest of the country must be about $136,000 to give a national average of $300,000.
i.e. 629,000/3 + 2x136,000/3 = 300,000. I don't believe that the average price for the rest of the country is $136,000.

I'm glad I'm not the only one who noticed how ridiculous that looked, but no doubt there is some high quality BS to explain it.

Sadly I put it down to the fact that there appears to be very few journalists in NZ who are numerically literate. I suppose you could say that the corollary to that is that those who are good with numbers are often not sufficiently literate to make good journalists. I think that this leads to an environment whereby discussion and debate on how the country is run is done so without the benefit of hard facts and good analysis.

Lower quartile. . The 25th percentile. Not average.

But it is the average of all the lower quartiles. It is a like for like subset of the total population across the whole country. Besides which, they are just several groups of numbers to be statistically analysed. It wouldn't matter what they were, all the statistical results should be consistent if the analysis is applied to the same group of numbers. I think the argument still applies.

This ties in with what my sources in Auckland are telling me. You can still sell the cheaper houses in average locations but it is difficult to sell the more expensive houses. Trophy houses will generally sell of course. Interesting times. The REINZ median, average and strata data figures are down for Auckland as they are selling more "cheaper" houses than they used to and less "expensive" homes than they used to.

Wish this Auckland contagion would stop spreading. I avoided living in Auckland for this particular reason among others, and now the prices in Tauranga are just moving in to similar stupid territory.


I'm assuming they mean the underclass being - anyone who has bought into the Auckland property market in the last 5 years, mortgaging themselves to the hilt, without the real benefit of the 10 year real capital gain at the outset of the boom? We're renting a house we couldn't currently afford to buy, happy to wait for the bubble to burst. Worried for the younger DINKS who paid north of 1.2M for a renovators dream at 20% down and dependence on rates staying under 6% though. They're the ones who will pay for this giant Ponzi scheme when the tide goes out.

I would be happy to rent with better conditions. It's hard to own a pet, paint walls, get UFB installed or have any guarantee of tenure.

What is dinks?

Dual Income No Kids household.

Ackshually, at the end of the day, a lifetime of crippling debt for a crappy house is a badge of honour.

Something appears wrong with Christchurch here.....I'm assuming that all the "As Is Where Is" properties are showing up in the collated figures causing a distortion on the affordability front.

Anyone know where I can find statistics that don't include the swampy eastern suburbs?

Interestingly, our landlord has owned our Auckland rental for just over a year, and was banking on making a capital gain. They mentioned they're subsidising our rent on their mortgage repayments. The house is on the market as of yesterday, and they're aiming for a quick auction. They paid 1.25M (CV 1.27M and tending down on qv.co.nz). My pick is DINKS will get sucked into buying, or they'll be out of luck. How close the mortgagee sale is depends on their equity and cashflow.

Ezy What rent do you pay for the house they paid 1.25m for ?

A bit under $800 a week. The gross rental yield for them would be about 3% after property management fees, insurances etc. To put it in perspective if we had a 300k deposit, we'd be paying $1176 per week over 30 years at 5%.

I guess you have been the sucker, my Mortgage peaked at $630 a week on 8.6% interest rates ! and I was still debt free at age 47 on a single middle of the road income. Still if you want to live in a $1.25mil house its your call when one at half that price is just fine to live in and pay a mortgage on. I guess thats why FHB cannot "afford" their first house ?

@ carlos - show me a house in Auckland for $600k that you'd live in....?

I bought mine in 2000 and paid a pittance compared to now and in a decent suburb (Forrest Hill) but we're all so superior about how "smart" we were - its bollocks - we were lucky to have the opportunity "we" as a country refuse to offer our next generation.

You'd be lucky to buy a heap of crap in Ranui for $600k now surrounded by gangsters - what we had is something called "luck of timing, unfortunately our next generation do not have the options we were afforded even at higher interest rates - I know I'd rather have my old $200k mortagage at 8% than $800k at 4% hanging over my head...

To blame them for this is pretty darned unfair and smug

Carlos is always this smug, and he should live in a $600k house. A youtube channel would be a great way to tell us about the lifestyle in that house. The gangsters sound like you'd have no shortage of interest events going on.

I don't usually agree with Carlos but if you did manage to get the fabled $605k to $630k house with a 10% deposit you could pay $640 per week. That would use 12 month fixed at 4.15%.

You might live further away and have some more transport costs (I'm assuming) but this is feasible if you are able to save. A $60k to $63k deposit might take someone a while to pull together but hopefully you have something in a kiwisaver account if you really want to buy a house. Of course you will lose out on compounding investment gains.

OMG you know what...when you live on a street where the cheapest house is well over $2m, it is really really painful to read about people arguing about whether to buy or rent a $600k hovel.

Zachary Smith does not approve of this comment.

Excuse me? I thought we are the same person? ...or do I sound like Mike Hosking :-P

There seems to be some disturbance in the force....

Supercilious, Cravat, Silk Shirt, smoking jacket, elevenses, champers, cucumber sandwiches out on the lawn

It's also strange when a hovel in Auckland has a higher "value" than my new house. A house that is insulated with double glazing, versus a rotten husk with a fortunate in maintenance costs hidden away.

Ezy. Lots do it so I am going to presumed they borrowed the whole $1.2 mil, raising deposit off an existing property.
At 5.5% thats an interest cost of $66k. (Lots are) You pay $42k. So they are down $24k pa plus outgoings, plus long term maintainance liability. So out of pocket $ 30-35k. Less some tax refund.
A big drain on their finances.
House prices are not rising as planned. What seemed like a good idea a year or two ago has turned to custard. They suddenly realise the size of the problem if the market goes tits up. I bet there have been some sleepless nights.
No mystery they are selling.


Its simple , stop whining and shift out of Auckland ,if you want to stay there stop whining to the rest of the country
about the price of houses, the traffic grid lock, the increasing rates ,move somewhere else and get a life out of the rat race .

... and so mack, what happends if the corrupt money buggars the rest of the county, you expect the young to then move to the Chatams?

Been there, done that. Being away from family and friends hurts after a while. Almost as much as seeing how blighted their futures are now.

If the rest of the country could vote in any of the other parties than the one responsible for this I'm sure the whining could be toned down.

Leave them alone Mack. They are not hurting anyone with their knashing of teeth and loud praying to the Almighty Needle that on the rapture will appear in the sky over Auckland to pop Satan's bubble.



Sure it makes sense in many ways but why should I uproot from my lifelong city, my family, my friends to accommodate the huge influx of those from other parts of the world that are flooding in and causing many of the issues.

Auckland was not always this way - the enormous amount of domestic population flow into Auckland and then from overseas made the issue. So why the heck should I move? Would you from the city of your birth / extended family and not be p!ssed off??

And more importantly the contagion is spreading.....so if you really think this insane inflation will stop at Auckland you are dreaming, its coming your way and fast unless we turn off this insane immigration policy and the ability for non-residents to speculate and park their dirty $$$ in our country and make speculation on housing less attractive...maybe then we'd also get some capital flowing into productive enterprise and not tied up in mortgages to AUS owned banks....

It's already it's hit Hamilton and the BOP, forcing FHB locals there to pay more than they can.....price inflation is not wealth - its an illusion but it seems we just cannot get our heads around it.

Until enough people wake up and realise we've been sold out and our rights to shelter now pegged against a global market that will make the next generation renting serfs in their own land - its nothing short of treason.

This is an issue for all of NZ - it's just hit Auckland first....


Well said, couldn't agree more, and on top of this someone needs to rein the banks in, and stop these ridiculous levels of debt they are quite willing to let people take on to purchase over priced assets, lending 7x salary to purchase a property is just fueling the market with more and more credit pushing up prices.

Well said. The issue of nation hood, needs to be considered. Born and bred here, or moved here and committed to this country. But now land sold to the highest bidder, no matter what country they reside in, and outbidding the young of this country. The younger generations of NZ'ers especially would benefit by getting together a voicing their concerns. They risk becoming serfs and peasants in their own land.

I groan everytime I hear this. Lets all just move to the Provinces.

I live in Taranaki. Can you please tell me where all the jobs are that you are going to get?
What big companies are around with corporate offices?

The vast bulk of Jobs for those with your bog standard degree (Accountants, HR, Managers, Marketing, Lawyers, IT, etc...) are in either Auckland (private enterprise) or Wellington (Govt). There is very little elsewhere in the country. Yes there are big single employers, but they are one hit wonders. Take Tiwai Point out of Invercargill, the Uni out of Dunedin/Palmy, and what do you have.

The biggest employers in NP are the Council, the Hospital, TSB, Fonterra, and Oil and Gas. I am sure you can tell me how they are all going? Opportunities galore - It's very simple, if I lose my job, there is no other work here. I have to move to Wgtn, Akld, or OZ.

So rather than bagging the whiners, why don't you move down here, oh wait - you can't get work. Turns out the scenery doesn't pay the bills.

May not be a place you would choose however South island cities are having to recruit from overseas to get people with bog standard degrees with three years experience plus in those areas...so.are kiwis actually looking?

My firm has 60 mid-rage professionals earning in the 150-250k range in Christchurch as an example..half are under the age of 30.


Shame we had a flag vs bath towel referendum, and not one on immigration!


And one on the TPP, not to mention asset sales.


"House prices increasing so much in Auckland they risk creating an economic underclass that doesn't exist in other parts of the country"

John and Bill give each other congratulatory high-fives at a job well done!

The reality is they have already created the underclass and its only getting worse.


leaving NZ if by end of April me and partner don't get reasonable pay rises. 1 more than average income is not enough to pay for rent+childcare, we had enough.


I'm sad to say but my fiance and I are also off. We have been back in NZ now for 3 years and just cannot get ahead. Its such a shame because we would love to stay.

They talked about the "brain drain" with miners heading off to Western Australia under Helen. I wonder what they'll call it when the people who can earn more because they have highly qualified jobs leave? We're considering it. With the OCR continuing to go down prolonging the inevitable the train wreck is starting to look like it might be more like the titanic hitting an iceberg.

I dont think that the ppl leaving to work in the mines were mostly in the "brain drain " category. I'd suggest most are more like typical tradesmen/women/truck drivers with some get up and go. However during that time and now those of the brain drain, the highly qualified and capable have indeed been moving to OZ and UK. A number of those I knew, they didnt just leave for the better pay but also more job security and a pension.

Yes I also think the train wreck is inevitable and its going to be big.

Apparently housing in Auckland is demand and supply but there are other factors adversely affecting the first home buyers. All the polices are in favour of investors. Investors get bounty of tax benefits. A critical analysis of tax system would reveal that honest tax payers are paying these bounties to property investors. Political parties does not appear to be interested in resolving these issues. No doubt reserve bank has taken steps by imposing requirement of 30% deposit for investment property but this too is favouring rich as RBNZ has not imposed this requirement on banks to get direct cash contribution , so banks accept existing property towards contribution resulting 100% financing. Moreover the investor then is able to claim the entire interest as loss towards earning where as it should have been restricted to 70%. The policy not implemented correctly has no meaningfull effect. There are many other factors which highly favour investors i.. rental income from paying guests, affect of immigration, immigration policy itself, currency devaluation. As a matter of fact, it is now time for the government to set up a review panel and examine all the aspects of this problem before it becomes irreversible.

yes good analysis. It's all by design, btw, don't expect Govt to do anything.

What I take from these figures is that the baseline houses have increased in value disproportionately in Auckland and the surrounding regions. In the article on latest auction results for apartments the featured two bedroom home unit in Morningside sold for 58% above CV. The increases for Waitakere, Manukau, Tauranga and Hamilton are high because the entry level house has gone up from around 400K to 600K and these areas are where most of those houses are. If immigrants are buying a large proportion of them they may have the extra motivation, as pioneers do, to make great sacrifices to secure property for themselves in New Zealand.


Well I live in Nelson where the affordability has gone down. One of my best tenants of three years who arrived in New Zealand with nothing from Burma a few years ago has just given notice because they have purchased their first home. They have low skilled low wage jobs but have worked hard. If they can do it anyone can. It is about time Kiwis of all races got off their butts like my tenants and worked hard to buy their own homes instead of relying on property investors to house them.


A lifetime of bank slavery is not an achievement.

Such an uplifting comment! So even if house prices go up in a month what I earn in six months, you're saying I just need to work six times harder...its so simple now, you're a genius! I can do anything with that advice, maybe i will train hard and become an All Black.

Get into the exciting and profitable methamphetamine industry. That's where the money is, and this government has extremely supportive policies for organised crime entrepreneurs and their money-laundering needs.

Yep move to Aussie you'll earn 30% -50% more, have much better affordability and a far better lifestyle. . Auckland is no place for a young family plus its boring as batsht.

Where are all the losers predicting a crash in Auckland property sometime soon yesterday?

"I'mma not gonna buy a house in Auckland, cause I'mma seen a crash in the Ireland and da Spain 7 years ago, durpa durpa." - Said many losers.

But seriously. A 30 percent correction is coming.

Haha, kiss my A..E and have a nice long weekend.

It must be painful being so clever.

This Grey Lynn do up just sold for $2,955,000 - amazing!

Grey Lynn, 1138 sqm of land - level - beautiful - land alone is worth it

On a very busy main road opposite the Western Springs Speedway gates! Maybe another wealthy childcare centre owner purchased it. At 400m2 per lot in Res 6a zone thats only a 2 lot site - ie almost $1.5m per lot - you really think the land is worth that iconoclast

I tried to look up the CV but GIS viewer appears to be on the blink.

Latest capital value

Only 13% above CV. This price seems reasonable, even a little low.

The high end is slowing down as shown by REINZ data.

I hope they were paying for the land because it just looks like a wooden shack to me.

Stamp duty 20% on foreign buyers. 10% stamp duty on second homes and investment properties. 4:1 income to loan ratio on ALL mortgages including investment. Reduce the tat incentives on investment property interest expense in line with the uk. Stamp duty would pay for the infrastructure. First home buyers can't compete with investors. Both after the same properties. Investors have experience so can buy on the spot. They fix the houses up and add 100k to the price making them out of reach. Investors make up 40% of the market. That's the problem. Would relax the investor stamp.duty on new builds. Govt talks about supply without any discussion regarding demand. 3rd form economics told me that both demand and supply impact pricing.

I agree but think loan to income ratio for owner occupied should be allowed to be higher than for investments.

Im not sure why so many of you keep whinging and moaning about house prices - heres a reality check its not going change anything. Auckland (New Zealand) is one of the best and safest places in the world to live and with all the horrible terrorism we see happen among other things there will be more and more people come to live here. We may not like the fact this has an impact on our housing prices but you are not going to change anything by whinging, instead what about suggesting some positive ideas about how we might deal with housing.

Easy, cut immigration 50%, ban foreign ownership of houses or tax them. Problem solved for no additional cost in almost no time.

When you say no cost you are forgetting that NZs rock star economy is almost 100% fueled by immigration. The cost would be a long deep recession.

....Wrong... We are only delaying the inevitable....and making it worse when it arrives . You are thinking short term. Long term affects of immigration include need for more road, houses, infrastructure, healthcare, national super...and on and on it goes. Long term drain verse short input of migrant and their cash. Add to this the degradation of our environment, as we try and squeeze more and more out of a finite land mass. NZ is like a pie. Trying to slice it into more pieces just means we each get a smaller slice. Currently reflected in gdp per head going down.

The generation pulling the strings in New Zealand just want to keep the wheels spinning for a few more years. Then its somebody else's problem to deal with.

Agree that we are only delaying the inevitable but with such a small population we can delay it a long time yet. I'm not sure why you and so many others in this site think building infrastructure and houses is a bad thing. It actually employs lots of people, especially unskilled people that would otherwise be being payed by the state.
I'm not sure if you realise how bad the economies are in some of the countries that don't have growth like us, be careful what you wish for.

For a lot of commenters on this site everything is a bad thing. They're a depressing lot but I'm remaining upbeat.

Sall population? In what context? I'd say too large....Auckland traffic and our waterways being case in point.

Perhaps on the context the North Island is roughly the same size as Java but has 138 million less people.

Going by your pie theory, Mongolia should be one of the richest countries on earth, and Singapore one of the poorest.

Recession, or long overdue correction ? If we have to swallow a rat, it may be more palatable now than after another summer in the sun.

Maybe ask the Europeans what that rat tastes like? Unfortunately it keeps repeating on you too.

Have you really convinced yourself that people are considering flocking to New Zealand to make themselves safe from terrorists? Honestly, it is laughable. Now you might have a point if you started talking about the Chinese trying to get away from the environment they have trashed.

What should scare anybody a lot more is driving on New Zealand roads.

The problem with positive ideas about housing that they are almost a playbook for this government to do the exact opposite thing. Housing is artificially expensive and it is deliberate policy from the top.

Not laughable at all. Only on Thursday I was speaking with an English woman about Brussels who said her main motivation for coming to NZ was because of all the terror alerts in her city. true story.

I hope you didn't break it to her that she'll have to pass through an airport to get there...

It wasn't so much going to airports but the people who lived in the city she left. The police were finding people plotting and building bombs and the general mood of the new 'British" seemed aggressive like it was going to get worse. Neighbourhoods becoming no-go zones.

Neighbourhoods - no-go zones

Within 10 years you will start to see gated-communities in Auckland

One week ago the NZ Herald went into overdrive with a campaign on burglaries in Auckland, where, how, when. The dumb thing was the crusade revealed that the police treat burglaries as sports events rather than a crime. If they do turn up it might be the next day - if you are lucky

That was an open invitation to all NZ burglars to head for Auckland - free-for-all

All this blather would be rational if we weren't so beholden to foreign markets. But when GFC1 arrives in 2017 (because the first blip in 08 was erased away quantitively) we'll really know what austerity means. And what industry will save little old NZ then? Dairy, tourism, 100% clean? The sad thing is we're mostly too financially illiterate to have an inkling.

The New Zealand economy is still performing well. Recent GDP data confirmed the economy ended the year 2015 with approx 3% annualised growth, in other words the economy is still expanding and unemployment has been falling. So for those of us who arnt financially illeterate we can continue drinking from our glass that is always half full.


Pray tell how that translates into GDP per capita? Not looking so flash now is it.

Depends, Nitro might consider declining GDP per capita to be a good thing?!

We can just keep importing more immigrants to keep padding the overall GDP statistics too. Helps keeps those pesky young New Zealanders locked out of the market as a bonus. Straining infrastructure? Let's just ignore that shall we, after all, this is for the greater good of New Zealanders is it not?

Central Govn benefits from the PAYE increase as the costs are externalized to the rate payer?

Bit simplistic Steven

Your assumption is the bulk of new migrants become PAYE taxpayers. How many disappear into the cash economy?. Then there is the substitution effect. A skilled (ahem) newcomer, having undertaken a shift half-way across the world, now looking for work, often joins the work-force displacing an unskilled-local (ahem) at half the price. Which sets of a chain-reaction that cascades down the line as the dislodged compete downwards, further dislodging the next, with every possibility many join the cash economy. One additional newcomer can result in many cash only desperates at the bottom of the heap. Net result government coffers struggle to reflect the increasing numbers

Nitro I agree its a great place to live however we should have learnt some lessons from the GFC. Protect people from taking out excessive mortgages which only inflate prices. Reduce demand from foreign buyers who are not "coming to NZ to live". None of the proposals I made change the fact that NZ is a great place. The same things are happening in the UK and the govt there is being more proactive. Less debt more disposable income. Young people having more of a chance by reducing investor demand both foreign and domestic.

At the moment the odds are stacked in the investors favour especially with the interest tax deductibility and the large capital that they have accumulated over the years. Ignoring the problem wont make it go away. That has been the policy for the last 10 years and hasn't helped matters.

People are still buying homes instead of renting so houses must still be affordable. It is not obvious that the best option is to rent. Not by a long shot.
Perhaps if you were a couple, no pets, no children, both working, middle class European, and loved travelling, it would make sense to rent.

Most people are terrible at maths and follow the herd.

Fear always follows greed. And kiwis have been very very greedy over the last 10-15 years with respect to property.

No one is being greedy. Who sells a house for less than the market value unless it is to family?
This is a point I have been pushing for awhile now. Looking after the family. Auckland has one of the greatest percentages of foreign born folk.


ZS, this, like talking to the typical kiwi investor, is a little like hitting my head against a brick wall. So after this I'm not replying to your trolling. Kiwis are blinded by their own greedy ambitions right now. Most have no perspective. They're blinded by their greed.

You will come up with any excuse to say this time it's different - but you're part of the herd, who is caught up in a bubble, so of course you're going to say that. Look past your own greedy self-centered ambitions and you might glimpse the truth. We're indebted, we've created false wealth, that needs to be paid for some how, someone must pay the bills, but who and how, and when?

Property in NZ is cruising for a massive bruising. If it's not, then we're buggered as everyone is going to be entirely indebted for the rest of their lives - as a result our economy is going to be buggered as no-one is going to have any money to spend other than paying off their massive debts to the Australian owned banks. This will cause recession, which will result in people leaving the country, which will result in lowered demand in housing, which will result in over supply, which will result in a significant drop in housing prices.

I think we'll soon see who have been swimming naked - and given that our debt levels are at all time highs, I expect I'll see that it is a significant proportion of our population.

Non-Aucklanders and struggling FHB's call this a bubble, Auckland home owners call this BAU.

I know I'm talking to myself here but you are right it is BAU. Auckland housing prices have been going up since the seventies. I remember talking to a guy who worked as a prison guard back in the nineties and he told me he had bought several properties and was set for life. I remember thinking, damn, I have missed out.

The big divergence between incomes and prices is a recent thing. Central bank targetting of CPI inflation (while ignoring house price inflation) since 1999 is the primary cause. It won't continue forever, because it can't.

@zsmith you ask " who sells at less than the market value" but what is the market value? The market value is set by the market not by the seller. I worked in both Spain and Ireland during the property bubbles in those countries and saw the " market value" decline by 50%.
Another factor is that people then get locked in and cannot either sell or move so no prospect of heading overseas for better wages at that stage....too late then.
This also happens when a currency weakens enough ...I have friends in Capetown who want to return home now that they have retired but cannot afford to do so because the rand has plummeted so much against the $ in the 30 years they have been working in SA. Their house value in rand is still good but the rand they would recieve are not sufficient to provide a lifestyle anywhere else in the world!
We have lots of potential problems on the horizon with our own economy, $ that will weaken for sure and housing issues.

Market value is the CV. You're now in NZ not in Spain or Ireland!

@ doublegz
Sadly if a property bubble bursts the CV goes out the window whether it is Ireland , Spain or NZ.
The market value becomes whatever you can manage to get for the property and in a bubble burst situation there is no rush of buyers...I've been there done that and got the t-shirt.
Dream on if you think your CV would mean anything in a property crash.

I should say CV + 30% and this is the market right now.

So after this I'm not replying to your trolling.

It surprises me that people call me a troll. I am a player. This is an investment discussion site although I sometimes think a lot of the commenters should just go and hang out at some Marxist blog.

I supposed this applies to me too since people see us as the same master of troll on troll :-P

I fully expect the Troll to be this year's Time Magazine Man Person of the Year.

Could you provide a few links to these "marxist" blogs?

I sometimes think a few of the commenters should just go back to making the pages of the property newspaper sticky. Do they not still come in New Zealand's official languages?

Why can't a counter argument be expressed? What's wrong with you? Do you really think your comment is reasonable or even sensible? Why be so gross?
Here are some Marxist blogs. Not sure why you can't Google them yourself:

Absolutely, it's a far more hilarious caricacture than dismissing commenters as marxist.

Must have missed the counter argument, or was that just spouting garbage about reds under the bed again?

You'll find many people here are wise enough to see how unhealthy, divisive and financially risky the situation has become. You could probably learn a thing or two from them.

It's typically Marxist to resort to utilizing toilet humour. Your opinions are quite worthless if you have to do this.

Lots of neo-liberal sites with blind right wing neo-liberal orthodoxies out there may suit you better, whaleoil for instance, NBR.

I'd class myself as European New Right.
My comment about Marxist blogs that seems to have rustled Xelnaga's jimmies is that many comments seem out of sorts with the nature of this web site which is focused on investment and making money.

You mean neo-fascist....

"My principles are only those that, before the French Revolution, every well-born person considered sane and normal." - Julius Evola

Julius Evola! That takes me back. So essentially you're a neo-fascist myticism-addled loony nuttier than Aleister Crowley in a bagful of squirrels?

We're the cool kids now...
Wouldn't it be okay as a personal philosophy to live by? Basically just having some high personal standards and an awareness of the connection between the past and present with a bit of an understanding that man is not just an animal but a little bit more.
Crowely's probably taking it too far.

Aleister Crowley is a beacon of rationality in comparison. But, if you're happy with retaining your semen according to the drug-addled pseudo-scientific ramblings of a Lemuria-believing ritual magic-doing old Nazi, then who am I to stand in your way.

You don't have to accept everything a thinker has proposed. I believe even Newton had some strange beliefs. Evola and Crowley are regarded as renowned thinkers and will remain so for all time. I do get the impression from some commenters here that they are unhappy with things as they are now and that they are searching for some solution. In Europe now we are seeing the rise of activist Identitarian movements like Generation Identitaire and perhaps the same could happen here. If nothing else it would show that young people are still thinking about loftier things.

I've been treating this as nothing more than an entertaining game of 'prod the loony' (aaah, in a less politically correct age, I'd have had to go on a field trip to Bedlam for that, maybe take a picnic), but in the case of nutty ol' Julius, once you've stripped away all the lunacy with dead mystical cults and daft evolutionary fantasies and Lemuria and semen and Waffen SS fanboying and who knows what, there's nothing left but plain old 'oppress everybody who isn't like me, and grovel to my betters', the philosophy of weaklings who can't face a fair competition. Must be terrible to live with that kind of insecurity, fearing that you'd be outperformed by people you'd like to believe are inferior, if the rules aren't rigged in your favour. I figure you're just playing the game like I am, but I'd have nothing but pity for anybody who actually believed it.

Interesting. Recognizing superiority is not grovelling to your betters and recognizing inferiority is not being oppressive. Do teachers oppress students and do students grovel to teachers? Do managers oppress workers and do workers grovel to managers? Do officers oppress soldiers and do soldiers grovel to officers? Your way of thinking is very strange.
I guess I'm just aware of my place in the world.
PS: I am working on the theory that Baby Boomers were brought up in this sort of fascist environment. When NZ was the greatest country in the world. We were superior to even Americans. Not very diverse. Young people today look back at the fifties and sixties and think, hey, it was better back then.
Today's BBs say no it was terrible, now you lazy young people have to pay for your education and compete with all the workers of the world. Get used to it! LOL.

Aah, but how does one define superiority? In terms of crazy old Julius, it's right there in your original quote - 'the well-born', 'before the French Revolution'. Nothing to do with ability, or effort, or any kind of meritocracy. It's all about entrenching the aristocracy and a rigid hierarchy, with Jews, women, and anyone else not like you at the bottom of it, not because of any objective measure of merit and ability, but because it's convenient and makes the white dudes feel all puffed up. By all means go grovel to some inbred idiot in silk knickers who can't even dress himself, if that's how you define superiority.

What you and Julius really are is Authoritarian:


It's really just a question of whichever cult gets to you first.

I edited my comment before I read your response.

Well, we probably need some authority to get back on track. I'm praying for a Trump victory. Well-born just means good breeding.

Well, I'm a member of one of the Royal families of Eastern Europe. By your own philosophy you should really be curtseying right now.

But I wear my authority lightly, and will let you off on the genuflection, and go and make a banana cake without benefit of servants.

Those Eastern European royals shagged anything that moved, we are probably all related to them one way or the other.


Shagging the right person was a very reliable way into the aristocracy, and they certainly spread it around with the servants and slaves. So any claim to inherent superiority is dubious.

What's that quote - something like there is no slave who has not an ancestor who was a king, and no king who has not an ancestor who was a slave'.

Not to mention when the Mongols raped and pillaged the area. All their brown-eyed descendants.

And Alexander the Great and his bunch going in the other direction long before that.

We have now reached peak comment indent.

Or have we?

For Evola it wasn't about race, it was about nobility of spirit.

Ooh, we can go deeper (as I was saying to your mom).

What is nobility of spirit and what units do you measure it in?

It's kind of mystical. Perhaps read Evola for more. All I know is I recognise it when I see it.

I'd prefer something a bit more evidence-based than your imagination.

Peak indent achieved.


We are now breaking the laws of physics.

Now we know what it looks like on the other side.

I'm going outside to see if the sky has turned orange.

I have been pondering your reaction to my quoting of Julius Evola and it has been nagging me, like I am missing a part of a puzzle. Why such a reaction? It doesn't make sense. If someone actually said to me, "I am superior to you and you are inferior", it would be like water off a duck's back to me if it wasn't true, and if it were true I'd be like, "I want you on my team."
I know a lot of people think they are superior, members of many religious groups for example. It doesn't bother me a bit. It's almost like in your heart of hearts, if I say it you truly believe it and you must try and do something about it because it drives you a little bit crazy.

But my reaction was a great deal of hilarity and taking the mick. Julius Evola for chrissakes. Wonderful to see that old lunatic pop up again. Like bumping into a crazy uncle you haven't seen for years. From memory the only thing missing from his deranged ramblings was aliens.

I don't care if people think they're superior either. Maybe they are, maybe they aren't, probably they're deluded, it'll probably be hilarious, and it all depends on what characteristic you've based it on. If you've deliberately chosen a criteria to favour yourself, then that's not very secure and self-confident, is it? Like declaring humans superior to animals in every way, having conveniently chosen the evaluation criteria to be something unique to humans, like underwear or nachos. Sure I'm superior to the chameleon if that's what we've chosen as the criteria. Chamelons suck at making nachos and wearing boxer briefs. But punt it over to the chameleon, and it'll totally be sneering at our inferior ability to catch insects with our tongues.

Just speaking for myself there. Maybe you rock at catching flies with your tongue. If so, congratulations.

Oh good, because all I am promoting is the preservation of Western European culture and identity. And suggesting preserving Kiwi identity.

There is no doubt that the brain drain is happening in Auckland even if the numbers don't reflect that. Trying to find good professionals with 5+ years experience is extremely tricky in certain professions.

What industries?

Mid level management, marketing, advertising. Ask any recruitment consultant.

here I am. 2 of us mid level managers are heading away if salaries don't keep up. Recruiters have to be realistic, 60k for a manager is bullshit AND you get what you pay for.
I can speak 4 languages so my job market is the world, you have to pay if you want me to stay.

Sounds like France will be lucky to have you. My friends are trying to sell their house there and the market has collapsed so you might want to consider renting there. They reckon it will take them 3 years to sell and they will lose so much money.

Definitely renting. I see a house as a place to live, once I find the place. Got better things to do with money than kill other people's hopes

If ppl in these three are leaving, I'll clap, the more the better. We need ppl who build things and run businesses not ppl who talk about it, we have way too many of those.

I am a little bit in shock - I agree with Steven on this.

I agree that we need more builders but that wasn't my point. My point was that people of that age can't afford to live in Auckland so will go elsewhere. Whatever their chosen vocation. This is just an illustration of this trend starting to affect business. Would you really applaud any young people leaving Akl?

Perhaps they need to focus on trying to encourage highly skilled migrants to NZ shores not just students. Would be nice to see Auckland as the tech startup capital ofor Australasia. Govt tax incentives for investors in startups would be a good start. Follow the UK EIS tax benefit scheme for startups. 30% tax relief and if the start up fails an additional 30% relief. Equity crowd funding sites a good way to get investors involved at an early stage. Check out sydnicateroom.com as an example. This is the direction nz should be moving towards. Forget property tax incentives. Let's try and increase gdp per capita.

It would be great if the tech scene took off in a big way in Auckland. But I doubt it's going to happen while housing is as unaffordable as Silicon Valley (Demographia, 2016). Why on earth would quality tech people choose Auckland?

Anyway, apparently, this is the vision for New Zealand from the top dog.


A rich foreigners playground and if you are a local that has to work for a living, to hell with you.

Immigration to Australia should be cut by 50%. But immigration to New Zealand should be spread out way more as its still too concentrated on Auckland. Not enough migrants going to the South Island.

30,700 people in the net migration stats moving to NZ were NZ citizens moving back from overseas.

Property further out of reach why? Because no one in their right mind is going to sell for less than they purchased for useless the run into financial problems. The greater fool comes into play. World wide lower interest rates are scheme to up prices of property so people can cash up for retirement etc. The younger generation not likely to have this option so they will need to think of their own scheme.

I wonder if there are many 55+ year olds foolish enough to own investment properties with interest only mortgages?

Was surprised reading the figure of approx 40% of new home loans in Australia recently were interest only. Is there any research available for NZ on the same topic that anyone is aware of?

Your comment is rather revealing. There really isn't much difference between an interest only mortgage and a normal mortgage as far as risk goes you know. Its just a cash flow thing. Most investors pay off capital in lump sums at renewal time rather than tiny amounts monthly. The beauty of an investment property is that you can sell it and still have somewhere to live. Most investors will have mortgage free family homes that can be used as a strategic reserve.
You guys talk as if property is going to become zero value. If that happens your money in the bank is likely to be gone too and all the gold confiscated. That is an apocalyptic scenario and not one normal people factor in.
I may be hit by lightening or die in a car crash (more likely) or get terminal cancer but I don't assume it is going to happen. Even the common marriage breakup is financially devastating. These things are much worse than a property crash for most individuals but they cope.

@ Zachary Smith
Your debt free family home which you call your "strategic reserve" could be at risk where your investment properties were interest only mortgages.
If the market falls and your investment properties have negative equity ( i.e. Are worth less than the mortgage ) then at the end of the mortgage term you would have to make up the shortfall which if you had used your family home as collateral would mean the family home being sold by the banks to cover the debt. Sadly this was very common in Spain folowing the european property crash with lots of evictions ordered by the courts to satisfy mortgage debts.

As long as prices do not drop substantially, yeah sure. The thing is once we see some eye watering drops the banks take over, the banks and hence the "owner" has no choice.

As long as rent covers mortgage its all good. Stop worrying about these things and start living. You could be killed tomorrow, that will be far worse.

Exactly Steven, you are dead right. When I was involved in the european property bubble bursting what happened was that as house prices fell the banks suddenly had an overexposure to an asset class with rapidly growing negative equity so they stopped lending on property which meant that the only sales happening were to people with cash that did not need to borrow anything. In turn this then accelerated the downturn and by the end of it I saw some homes being sold for less than it took to build them! Many owners had to sit it out and are happy with their homes but have been left in a situation of negative equity which I guess is not something that is nice to live with.
As regards investing for retirement ..a colleague of mine who had done well in buisness bought two houses in Ireland pre crash to fund his retirement.....now aged 66 he has had to go back to work.

Do you really feel this could never happen here?

@ buzby
Indeed I do believe it absolutely could happen here.

The annoying thing is that the solution is very simple yet the Govt are being slow to react.

NZ is perceived(at the moment) as a desirable place to live. We should learn from Switzerland's example and have a quota system of Visa's so that the growth of the economy is more measured. No more than 50k a year should be allowed in.It should also enable us to increase the QUALITY of immigration with is critical to our long term future.

It is such a no brainer but the Govt don't seem to "get it".

It's not the government - it's New Zealand that doesn't get "it"....

I wish that beyond the economics and the politics everyone could see what was really going on. I'm working 3 jobs right now to save for a deposit and I have calculated that to be even close to starting amounts of $140,000 I will have to work like this for the next 5 years. Once I reach that amount there is no guarantee that I won't need double that amount as the pries will have risen again and the goalposts shifted again. I have cried myself to sleep night after night for the last 6 months and my partner is ready to leave me over how obsessed and DESPERATE I have become over this situation.
I cannot move from Auckland for many reasons and I have no family here in NZ to help out. My family elsewhere have made it known they do not care what is going on in my life and in NZ so I'm effectively feeling rather alone and isolated by this. I know no-one in a similar situation and while I know they are out there I wish I had someone to talk to. The only people who I have talked to about this have called me a 'moaner' and a cry baby because I can't get want I want (all property owners). The bottom line and my point is, people are hurting each other because of this. Hearts are breaking. And all everyone keeps seeing is dollar signs and property lottery wins. Not the relationships that are suffering and the heartbreak going on behind closed doors. I have already put having children on hold and after the 5 years of working I will be past the point of ever having any anyway. There are massive sacrifices being made and quite frankly- the struggle is real.

Right now I am hoping I die before I retire because I really don't know what else to do.

The human element is what is missing for the whole equation - what is the effect on our society. You're right many people only see a quick buck (hopefully) being made. Organic growth is better than the boom bust cycle of the current capitalist system - some win , but many loose.

Singapore has had restrictions on housing for some years ( and you could hardly call Singapore a "left" leaning country) and now even China is starting to introduce restrictions designed to curb "irrational exuberance" .

I understand you mate, I was in the same position, seeing the goal post moving all the time. You get a payrise, the landlord ups the rent. You work a second job, the govt keeps 40%. While houses increase in a month more than you can save in a year. Friends around saying that I should buy or I would miss the train.
In the end I took the most financially stupid step: having a child. Don't delay, there's no point and the worries to be a father will drown out the worries not to own an un-achievable Akl house. lol better days will come

Your hard work will pay off in the end and the economic cycle will change and come into your favour. It sounds like you are grinding yourself into the ground though and nothing is worth that. You have a roof over your head and growing savings in the bank. It will get better.

This is a long debt driven super cycle, when it ends it won't come back for years and years.

near the end of the expansion phase of a long-term debt cycle, which typically lasts about 50 to 75 years.

What I am contending is that there are limits to spending growth financed by a combination of debt and money. When these limits are reached, it marks the end of the upward phase of the long-term debt cycle. In 1935, this scenario was dubbed "pushing on a string."

Dalio says risk premia — the return of risky assets such as bonds compared with cash — are at historically low levels.

This makes it harder for central banks to keep pushing up the prices of these assets with loose monetary policy, such as low interest rates and quantitative easing, because there is less incentive, or yield, to compensate investors for taking the risk on debt.


Two very interesting articles - leaves just one question - what next.....

That's the trillion dollar question that even the worlds top economists can't answer

... and that scares me.

If it's screwing up your relationship, then definitely time to take a step back and get some perspective. And as for the property owners calling you a whiner, balls to them. They would say that, wouldn't they? They're dependent on getting their claws into all the money you'll have to borrow for that mortgage.

There's more than one way to take advantage of a mania, and with your discipline, smarts, and savings, you've the opportunity to swim against the tide a little, and build a more diversified portfolio.

I give you a great deal of credit for just saving something - seems rare these days ( and I'm guilty of not saving at the moment)..

Thank you Bad Robot. I guess the good thing in all this is seeing more money in my account than I have ever seen before. Although sometimes I feel like just blowing the lot on a holiday away from here instead of saving it!

Hardworker, keep your head up and try not to let it get you down. Try and focus on the good things in your life and be grateful for that. The government is to blame for turning a blind eye to this growing problem. Perhaps look at other more affordable cities such as Wellington. There are many Aucklanders in the same situation and it is only going to get worse. Lots will be forced overseas to places with higher wages to try and come up with deposits to buy back in NZ.

It may feel like you are the only one Hardworker but there are thousands like you. I know people who are investing outside of Auckland where prices are rising more than Auckland so they can find a way to eventually own here. Your savings will eventually bring you options.

Thank you Buzby, I so appreciate your comments. So much more human than some other advice I have had recently, one being a 'friend' who mock cried, and told me I was a whinger to my face about it. Interestingly, after he told me to do whatever it takes to get on the property ladder as the prices are just going to go up and up I told him the following scenario. I went to see a 'house' in Avondale. It was a tiny shed, damp and had a 'garden' which was a patch of grass about 2m x 2m. The real estate agent proudly told me it would sell for 600K. My 'friend' laughed and said haha it would never go for that price. I told him it sold a week later at 659K. I asked my 'friend' that going by his assumptions that same place will be worth 1 million dollars, probably very soon. He seemed stumped. Our conversation had a real disconnect. He instilled fear in me to 'get on the ladder as soon as humanly possible' but then couldn't get behind his claim when faced with the dangerous reality.
Anyway, while I bust my guts out saving and eating 2 min noodles, I also feel like I'm missing the boat elsewhere in NZ and the disease will have spread by the time I'm in any kind of position to have options. I spend hours and hours thinking about it and I believe it is ruining my quality of life. I'm so....sad about it...just sad. You know?

This too shall pass. Thank your lucky stars that you're not a life-time bankster slave. Don't worry, be happy that you are alive and well.

Thank you Bender. Will keep this on a loop tape in my head, too often I'm losing sight of what's important and letting the 'mania' fuel my fears.

I believe that people in this situation need to find a collective voice and lobby the government to make changes. The UK have just introduced a new tax system which is going to kill the buy-to-let market there. If people shout loud enough one day they will listen here too. Keep reaching out to people, Hardworking, and maybe the media and politicians will start listening too. Ignore your ignorant 'friend'.

The challenge one would face is that the current government is simply doing whatever best suits the majority of the voting public (as we live in a democracy....). The majority of the voting public are BB who own lots of rental properties. They're greedy (why - I have no idea, but certain that their parents wouldn't be impressed). They won't vote for change unless they suddenly find an ethical backbone - some how it might need to be the younger generation that gives them the map to find it!

But the question is how?

New Zealand governments are no long left or right just populist...

Your 'friend' (hope you punched him in the nuts for being a complete dickhead) is repeating basic hard-sell techniques. Get in now! While stocks last! Limited time only! Would you believe it from a used car salesman?

There's a world of investment opportunities beyond rotting shacks in Avondale, and mediocre spider-infested houses just out of reach aren't worth torturing yourself over.

Gotcha. I hear you I really do. Even I listen to myself and wonder how I got so insane. I think my problem is that beyond having a mortgage for my own home in a place I want to live I have no idea where to start. It was always my dream and now I'm fumbling around in the dark wondering what to do next. I'm not all that smart when it comes to money (apart from working as much as I can for more) so I maybe need some advice from someone apart from 'friends' (I see him in SUCH a different light now after the other day). I guess I just don't know where to start to be honest I think I need a real trustworthy financial confidant, someone who can steer me down a better path even if it's not property. I'm not asking for much, just a roof over my head when I retire! You know, sometimes I wonder if it would be easier if I had absolutely nothing in my bank account and I was living on the bones of my arse. I'd have no choice to then move on and suck it up!

It's not easier with no money in the bank. You're on the right track. I'm not sure where to get honest advice - so many people are selling something. Save and invest - shares if you can stand the ups and downs otherwise a bank or finance company with a good credit rating. Just my two pence worth...

Hardworker - what you perhaps don't see is that those who you think are doing well (property owners) and who you are comparing yourself against, probably aren't sleeping that well at night. Most will be massively indebted, regularly hearing news of a property bubble, unable to loose their jobs, slaves to the banks. This to me doesn't sound like happiness. They'll tell you how wonderful it is, but if you look closely they're only saying that because they think they're supposed to. It's all a bit fake IMHO.

Take thanks for the fact you don't need to worry about those issues. When prices regulate over time (which they will - either via a crash, correction or low growth over the coming years) you'll be ready to step in at the right time, having done the hard yards so it will be all the more satisfying.

Not sure if you've heard of the 'marshmellow experiment' on delaying gratification, but I think it sums up nicely where you're at. Hang in there...

Set smaller goals and give yourself a reward for achieving them. I've learnt to break everything down into smaller gaols - works well IMHO

You are right, I don't see that. I see all of my friends buying houses and I wonder where the f they got over 100K when they work similar jobs to me! With 3 jobs and little time to myself I wonder where I'm going wrong, and how they all seem to have it so easy in an over-inflated market.
I will look up the 'marshmallow experiment' right now. I'm open to hear anything that will ease the pressure in my head and let me start enjoying life again.

Probably they didn't get it by working as hard as you did or saving much.

Having scraped together a 160k deposit over quite a few years, anyone who claims this is easy is spinning you a yarn, and no it's not any of the glib stupid things Boomers tell you like skipping on he lattes or Sky subscriptions that got me there, it's cutting your budget to the absolute bone and taking advantage of every possible opportunity that comes your way, and riding it to the max. Screw everyone who wants to tell you it's easy if only you sacrifice something they never had to. Be utterly ruthless. You can completely destroy thwm, they have not had to face real competition in any facet of life.

They likely visited the bank of mum & dad, or did some risky deals with the banksters which leaves the, exposed as hell. Pretty much everyone in my group of friends who bought recently fall into this category.

No such option here, since I am an immigrant, but we all have the cards we were dealt. I know I will sleep better when the crash comes and cash is king, compared to my peers who never had a hungry day in their life and are currently using the house as a credit card.

Independent_Observer, I've called you up on this before, it's lose not loose.
Loose lips sink ships, use is or lose it.

"Use is or lose it". Don't you just hate it when you're being a dick about somebody's spelling and make a mistake? Better edit quick, before anybody sees it.

You should have anticipated I would be a "Grammar Nazi".

Bit of a grammar Nazi pratfall there, mate. Fate spits in your muesli again.

No, I am fighting a one man war against this one mistake. I won't mention typos or spelling mistakes. This mistake is fundamental and the word lose may eventually be spelt loose if people like me are unwilling to stand up and be abused for pointing it out.
"The only thing necessary for the triumph of evil is for good men to do nothing."

Well, it's nice you have a hobby.

I wont edit it as it should remain as a stark reminder for those who follow to take more care.

A lesson in hubris.

What does not kill me makes me stronger. Conan the Barbarian

Kind of wishing I hadn't imagined you in a leather loincloth and funny little fur hat.

Ah, you showed up. What do you have to say on my posts above? This should be interesting.

I was quite moved by your comments and did give it some thought. I hesitate to comment as many around here view me as some sort of monster. It's a tough situation because I do think it is important that people who want a home of their own have a home of their own. Landlords can glibly say that rent costs about as much to service as a mortgage but banks don't see it like that and see a FHB with a low deposit as a big risk. I am coming around to the idea that my generation (boomers) had it fairly easy, especially if you played the game and worked steadily. We had practically free University but few of us actually took it up because we didn't need degrees to get good jobs. My only suggestion is to buy something like a B&T unit where the interest is about the same as rent. I started my family in such a place and had six people living in it at one stage.

Not the answer I was expecting Zach (sorry but you know what I mean) so I appreciate it. I think I wanted you to see more than the usual reactions to such articles, you know the ones about the gummint and immigration etc etc. Just a real, skin and bones person working hard to something she actually doesn't think she'll even make it to even after 5 or 6 years hard graft. I appreciate the advice on the units too but unfortunately (as we are seeing) things are getting so bad that looking around just two days ago I'm still going to need a minimum of $100K to get a look in on the little (tiny in fact) units that are around at the minute. I have savings but I have a long long way to go to get the $100K together. So, for now I take the days I get to myself (today) and cherish them, as tomorrow I am back to my 8.30am - 11.30pm shifts to keep building on that 100K in the bank. This, is the reality. I don't know if we have it better or worse than BB I have no idea. It doesn't feel like a life I want to keep living for the next 5 years only to see prices double what they are today.

You have described your situation really well and I think many of us will be thinking of you working such long hours. It certainly puts things into perspective and has even taken the shine off things. I shall try and be more circumspect when discussing affordability in future.

This kind of thing is happening nation wide Zach and it's fast becoming a human tragedy. Many just want a 'home', not an portfolio. They want to bring up a family in a stable and affordable environment and all this property chasing is killing that simple dream for many nzders. Where will it end? When 100 people own everything and the rest rent like peasants in their own country?

I really hope Elizabeth Kerr is reading your comments. Ask her to breakdown her " money machine" concept for you.

Hardworker, there is more to life than owning a house. This country is obsessed with it. I happily rent.

I remember a situation in Europe where everyone felt sorry for the renters. Then the credit crunch happened and those same people were then described as 'laughing all the way to the bank' with their savings and no debt or negative equity. Hang on in there, Hardworking. Sometimes not having the option can eventually work in your favour.

If I were living in Auckland and thinking of how on earth to get into housing, there's no way in heaven or earth I would be working myself to death or insanity to save for a ridiculously large down payment and a lifetime of huge mortgage bondage. I've said it before here, buy a boat with your savings and live aboard at a marina close to your main job, quit the others, and start living the good life.. Less really is more.
P.S. I am speaking as a retired 76 years young retiree who has lived aboard for 19 years at marinas in 4 cities. Many young singles and couples, some with children, embrace this healthy lifestyle.

To the best of my knowledge you cannot live full time at a marina in Auckland, certainly the likes of West Haven and Gulf Harbour are off the list. I'm sure if you have a Super yacht and are prepared to pay sqillions to have it tied up in the CBD for a few weeks you will be fine though. Sure if your retired and prepared to jump about from place to place all round the country and keep a low profile it will work.

You can liveaboard at Westhaven, Bayswater, Hobsonville and Gulf Harbour. Cost for our 47 foot yatch cheaper than rent. Now we mostly just anchor wherever we feel like and there's lots of options. 300 good anchorages between Whangamata and the Bay of Islands. Quite a few people doing it but it's so big it always feels deliciously uncrowded. Everyone you meet out here has great stories.

An interesting article on housing bubbles following research into recent property bubble in L.A.
Many aspects seem familiar....herd behaviour etc.

Southern England, Canada.......so many places seem excessively priced.

Good piece - would love to see some stats on Auckland buyer types for the last 2-3 years.

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